Poor worry about aging --in CANADA even!

[Chris Brady <cdbrady@xxxxxxxxxxxxx>]

Third of boomers worry about retirement assets

By JORDAN HEATH-RAWLINGS
Globe and Mail (Toronto) 3 September 2003

Nearly a third of Canadians nearing retirement age are
worried they haven't made adequate financial
preparations to maintain their standard of living
through the golden years, a Statistics Canada report
released yesterday found.

Statscan interviewed 25,000 Canadians over age 45,
employed and unemployed, from all levels of income
through its General Social Survey and found that
almost 33 per cent of those under 59 were afraid of
not having enough cash to retire and live a
comfortable life.

Concern over income was so great in some demographics
that 18 per cent of respondents said that they didn't
plan to retire at all.
"To be honest with you, things could probably be
looking better for us in our upcoming retirement years
than they are right now," said Torontonian Keith
Wilson, 50. "However, we probably won't be eating cat
food, at least."

Mr. Wilson is self-employed, but his wife, Elaine
Paul, has worked for AOL/Time Warner for the past five
years and has a pension with the company. Mr. Wilson
and his wife have been maximizing their RRSP
contributions in recent years, he said, but a rocky
economy has made them uncertain of their future.

"There's a contribution being made [by AOL/Time
Warner] towards her pension . . . and that's the main
thing that we have, that and the RRSP," he said. "But
our parents, who lived through the booming 1950s, '60s
and '70s, had a much better opportunity to put
something away. My wife's parents retired travelling
the world. That won't happen to us."

But unlike many who said they hadn't saved enough
money or weren't blessed with a solid pension, Ms.
Paul and Mr. Wilson have a few financial factors
working in their favour.

According to Grant Schellenberg of Statistics Canada,
there are several general indicators of whether or not
a Canadian is going to feel secure enough about
finances to retire by age 60 and not worry about
living costs.

The results were closely associated with financial
characteristics, as people with incomes lower than
$20,000 a year were almost three times more likely to
say they did not intend to retire than those earning
more than $40,000 a year.

Those who possess a full pension, own their own home,
have substantial earnings or have been employed
full-time for the past 12 months are more likely to
feel financially secure enough to retire and continue
to maintain their standards of living.

Those who have immigrated to Canada since 1980, people
in poor or deteriorating health and individuals who
have been separated from a spouse or divorced,
however, are most likely to worry about their
financial future, and keep working.

"[Of] the two wisest things we ever did in our
financial life, the biggest was to buy this house and
pay for it all," Mr. Wilson said. The other, he added,
was to invest in educational funds for their two
children.

The correlation between survey results and financial
characteristics, Mr. Schellenberg said, did not come
as much of a surprise. Another StatsCan survey on
financial security, performed in 1999, used financial
data, rather than people's perceptions, to calculate
how many Canadians would be able to live at their
current comfort level after retirement and found
mostly the same results.

According to the 1999 survey of assets, nearly a third
of Canadians had likely not saved enough to replace
two-thirds of their income or to generate a retirement
income above what StatsCan defined as "low-income" --
results that closely match Mr. Schellenberg's.

"When you step back and look at the characteristics
that are associated with concerns around the area of
financial insecurity . . . it's most prevalent in
people in lower-income households, as well as those
who don't have a pension plan, who rent rather than
own or who were unemployed throughout the previous
year," he said. "These are obvious indicators of
wealth, and so in that respect there's no big mystery
here."