As a record number of baby boomers approach the golden years, a growing number see their homes as a potential source of retirement income, a survey showed Monday.
More than a third of Canadians who aren't yet retired expect their home to be a source of retirement income. Of those, 40 per cent see the sale of their home, or the use of their home's equity, as accounting for up to half of their retirement income, according to RBC Financial Group's 16th annual RRSP survey.
That suggests there may be a danger that Canadian's aren't diversifying enough when they plan for the future.
“Home equity is better viewed as one of a diversified mix of investments designed to provide retirement income,” said Dave Richardson, vice-president of RBC Asset Management Inc.
Owning a home and saving for retirement were identified as the top two financial priorities, the bank said.
Canadians “are looking for ways to maximize their savings and investments to meet immediate financial commitments like mortgages, car payments, and putting their children through college or university,” said Mr. Richardson.
Two out of every three Canadians are planning for retirement — and many of those are younger people. Those over 55 are most likely to plan for retirement, which isn't surprising, but the survey showed almost half of people between 18 and 34 are also planning for their retirement.
“This is the first time in the 16 years we've been conducting this poll that this younger age group has figured so strongly in these retirement planning statistics,” said Mr. Richardson.
Sixty-two per cent of those aged 18 to 34 now hold RRSPs, up from 44 per cent five years ago.
Over all, record number of Canadians now have RRSPs, RBC said — with the number jumping to 68 per cent from 57 per cent five years ago.
Just over a third are saving for retirement through a monthly or quarterly plan, the bank said.
Other financial priorities for Canadians are reducing debt, trying to keep your head above water and general savings, the survey showed.
RBC conducted the poll with Ipsos Reid poll between Oct. 12 and Oct. 26 through telephone interviews with a random sample of 1,201 Canadian adults. The results are considered accurate to within plus or minus 2.8 per cent, 19 times out of 20.
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