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Higher-income groups more likely to not be ready to retire lanning for retirement is significantly harder now because of fundamental changes that have occurred in Canada over the last three decades. McKinsey & Company, a wellknown and highly-regarded international management consulting firm, has completed a report titled, Are Canadians Ready for Retirement? The report says the ratio of years we spend in retirement to working years has increased from 36 per cent in 1980 to the current 53 per cent. There are three reasons for this change. The obvious reason is that we live longer. Life expectancy has increased by more than three years during the last 30 years. The less obvious reason is young workers are entering the labour force one year later and older workers are retiring two years earlier. In summary, we work less with a longer retirement period to finance. This current retirement challenge is going to be an issue for many Canadians in the years to come. The number of Canadians over the age of 65 is estimated to grow 19 · Thursday, November 8, 2012 OAKVILLE BEAVER · www.insideHALTON.com P from 11 per cent in 1990 to 22 per cent in 2030. Factor in the poor stock market performance over the last decade and retirement planning issues just got much more difficult for many more people. The McKinsey reports predicted close to a quarter of Canadian households are not going to have enough income to maintain their desired standard of living. What is most interesting was the income groups most at risk of falling short of their retirement objectives -- households with the higher incomes have more retirement risk. Twenty-three per cent of Canadian households will not be ready for retirement. The most unprepared are the higher income households -- if household income is above $90,000 then 33 per cent will not be ready to retire. Those with household incomes greater than $140,000 are at most risk and 41 per cent will not be ready to retire. That is counterintuitive. You would expect those with higher incomes would be most ready to retire. Not so. The problem is lifestyle and expectations. Dollars & Sense By Peter Watson The numbers suggest the more you make, the more you spend. Higher earnings translate into higher expectations. The higher the retirement standard of living expectations, the harder it is to be financially wellprepared. Many households with high income, focus on immediate consumption and think that their high income will allow them to accumulate funds for retirement. It is that false sense of financial security from a higher income household group that translates into the largest retirement risk. The solution is discipline. Discipline is needed to maximize retirement savings by spending less now and saving for later. Maximize RRSP contributions and augment those savings with non-registered savings plans. That assumes you have enough years left in order to make up for poor savings patterns of the past. Older workers closer to retire- ment may have to extend their working careers. Supporting yourself during an extended retirement period is going to be one of the most significant problems for retirees over the coming decades. The challenge of preparing for a successful retirement is to save as you earn, so you will have sufficient financial resources to support your desired retirement standard of living. -- Submitted by Peter Watson, MBA, CFP, R.F.P., CIM, FCSI. Better Hearing Day Spaces are limited. HEARING SCIENCES BRONTE Wednesday November 28 8:30-5pm 1 DAY ONLY Call for your complimentary hearing test! Agil is the revolutionary new hearing device that helps you understand more with less effort. Research studies have shown that people fit with Agil hearing instruments report an amazing 86% Overall Satisfaction Rating and a 93% rating for Speech Clarity! With Agil, you'll reconnect with the voices, music and sounds that enrich your world. Life will seem brighter and more fulfilling, because you're hearing better and understanding more. IF YOU HAVE NOT LISTENED TO THE NEW DIGITAL TECHNOLOGY RECENTLY, THIS IS AN OPPORTUNITY NOT TO BE MISSED! An Audiologist will be present at our Better Hearing Day to demonstrate the impressive Agil automatic processing digital instrument. It is available in several different styles and price ranges. Hear your phone conversations with ease ­ even cell phones ­ with the automatic phone feature. Come and listen to the actual hearing aids. This is the best technology available today. Listen and judge for yourself. CALL NOW 905-465-3277 (EARS) 2419 MARINE DRIVE OAKVILLE NEW OWNERSHIP