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COVID-19 shorts Canadians’ plans for retirement

In the 2020 Retirement Risk Survey, conducted in partnership with Ipsos, the CIA asked Canadians a series of provocative questions about their retirement and long-term planning. The survey focused on how well Canadians understood longevity and life in retirement, and how accurate their expectations are around being disabled in retirement, needing long-term care, and more.

The key findings report penned by FCIAs Anna Doudina, Andrea Kojlak, CIA Staff Actuary Chris Fievoli, Krista Sacrey, and Umair Ali, summarizes the results. This five-part series of articles begins with a summary and then explores the report’s key areas of focus in more detail: impact of COVID-19, retirement age and life expectancy, financial plan for retirement, and living arrangements and long-term care.

In this article, we look at how COVID-19 has impacted Canadians and their perceptions of retirement.

A pandemic shift 

When surveyed in summer 2020, a significant number of Canadians were already feeling the financial sting of the COVID-19 pandemic. 36% of Canadians reported earning less household income due to the pandemic, with higher percentages seen amongst those born outside Canada (48%), non-retirees (43%), and members of the GenZ generation (58%).

With Canadians earning less, increases in debt followed suit. The report reveals 25% of respondents took on additional debt due to the pandemic, with higher percentages seen amongst students and self-employed Canadians (both at 33%). Also exposed were those who rent their home (34%) and those without a financial retirement plan (32%).

In addition to immediate impacts on household income and debt, COVID-19 has also changed individuals’ retirement timelines, with nearly one in four non-retirees (or whose spouse is not retired) (23%) reporting that it has impacted their (or their spouses) plans to retire. The following table below outlines the specific impact and underlying reason.

Impact and reasonProportion of respondents that chose the option
I and/or my spouse will work longer than planned because we need the income.69 %
I and/or my spouse will work longer than planned because at least one of us can work from home and avoid the health and safety risks of going into work.18 %
I and/or my spouse will retire sooner because at least one of us is concerned about our health and safety going back to work.8 %
I and/or my spouse will retire sooner because at least one of us has already been laid off or lost our job.7 %
Other5%

The impacts of COVID-19, however, do not stop there. With long-term care homes hit the hardest throughout the pandemic, views on assisted living facilities quickly turned sour.

When polled, 63% of Canadians said they have a more negative view of assisted living facilities because of the COVID-19 pandemic, with higher percentages seen amongst females (67%), retirees (70%), and those with chronic health issues (71%). Countering this trend, we see a significantly lower percentage (49%) amongst those living in Saskatchewan and Manitoba.

With the pandemic in its fourth wave, the Canadian retirement landscape remains a vulnerable sector. The findings of the report, though concerning, illustrate an undeniable fact that, more than ever, Canadians need support and information about how to manage their retirement and long-term care needs in old age. 

How has COVID-19 impacted your retirement plans? Let us know in the comments below.

Read the next article in the series, Outliving one’s income in retirement.

Read the full report.

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