He may reconsider stocks, but not for the foreseeable future. “Europe is a bomb waiting to explode,” he says. Royal Bank of Canada, the country’s “go-to safe stock,” in his opinion, “has become wildly varying in its price. I feel it’s going to take a year or two or three before we see any kind of co-ordinated improvement – if then. If I have cash, I know it will buy me less next year – but if I have stocks, I could lose 50 per cent.
“I am displeased that I can’t follow a more traditional investment process with asset allocation and some prospect of growth,” he says. “I’d like to be able to leave something to my kids.
Slow growth, low yields
The new normal, warns Eric Lascelles, chief economist at RBC Global Asset Management, is characterized by slow growth, low yields and a lot of uncertainty. “It’s not a happy place for investors right now,” he says.
Some, like Mr. Topolniski, worry for the next generation of retirees and his own children, who will have a heavier burden to bear.
“Our kids will be saddled with so much to try to fund those of us who have been a little flamboyant in our lifestyles,” he says.
Canadians are also living longer, which means they need their savings to stretch longer than previous generations. The Ontario Teachers’ Pension Plan, for example, now estimates that the typical teacher will draw on their pension an average of six more years than they work and contribute to it.
That has some late-career or recently retired Canadians playing amateur actuaries, morbidly estimating whether they can outlive their savings. The Who’s rallying cry “Hope I die before I get old,” which many of these people heard for the first time in their teens, seems to have been replaced with “Hope I die before I get too old.”
“I don’t know how long the situation [of escalating external financial pressures]will remain,” Ms. Wallace says. I’ve decided I’ll live until 80, but God, if I hang in until 90, what then? Then it could be a problem.”
Others are more sanguine. Dutch-born Peter Smit is enjoying his third career as owner of a hip wine bar in Saint John, N.B., and living comfortably but frugally in an 18th-century farmhouse and with a retirement portfolio that is worth about the same as it was five years ago.
Is he worried about the future? Not at all. “My parents both died when they were 75. I may get lucky and live to 80, but that’s it. My philosophy is to spend money in the next 10 to 15 years, then probably not have much left.”
With files from reporter Jeff Gray in Toronto
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