Coverage Overview

Many retail investors are worried they won't be able to afford to retire and most expect to work past the age of 65 in order to maintain their current lifestyles, according to an exclusive and revealing survey conducted for BNN by The Gandalf Group.

The second edition of this quarterly survey, sponsored by Standard Life, polled more than 500 retail investors across the country between December 27, 2009 and January 2, 2010.

To qualify for the survey, respondents bought or sold investments at least once a year and have at least $50,000 in stocks, bonds, mutual funds or RRSPs.

Here are some of the key findings:

Worried about Retirement -- Canadian retail investors are concerned about whether they'll be able to afford to retire, with cost of living being the key concern. For instance, respondents said they were most worried about affording their own homes, versus becoming a burden on family.

A Working Retirement -- Most retail investors who are not yet retired expect they will continue working at or after retirement age to generate income.

Where They are Putting Their Cash -- Many respondents are focused on high returns and income generating investments, such as dividend paying stocks. Top picks are banking and financials, as well as oil and gas.

Cautious Optimism -- Canadian investors are more confident about their personal finances and the economy than they were just three months ago. Investors expect the value of the TSX to rise moderately over the next year.

Few To Reach RRSP Limits -- On the eve of RRSP season, less than half of respondents who are not yet retired expect to make their maximum Registered Retirement Savings Plan contribution this year.

10-Percent Returns  -- Expectations for returns have risen since the fall survey. Investors now expect an overall return of 10 percent this year. Last fall, investors expected a return of 8.1 percent.

       

A Working Retirement

Freedom 55 is a dream of many retail investors. But, in reality, the average respondent expects to retire at 63 years of age.

Most respondents who are not yet retired think it's most likely they will work after retirement age. Respondents living in Quebec were the least likely to expect a working retirement.

        

Retirement Lifestyle Goals

Cost of living concerns rank as the top retirement lifestyle priorities. Investors are worries about maintaining their standard of living, keeping one's home and not becoming a burden on their families.

The majority of respondents said their lifestyle expectations were very influential in their investment plans.

 

        

Retirement Concerns

Thirty-five percent of all respondents say they are confident they have enough to live on in retirement.

Age plays a factor in peoples' concern regarding their finances during retirement. Those who are just below retirement age – 51 to 60 years of age – were least confident they will have enough to live on.  About 40 percent of current retirees are worried about running out of money.

        

Investors' Confidence

Most respondents say their situation will be better a year from today, but few believe it will be much better.

The majority of investors – 58 percent -- say their situation is better today than it was a year ago.

Retired investors were more likely to say they are worse off now, and are not as optimistic about where they will be a year from now. And the majority of seniors said low interest rates had a negative impact on their situation.

Less than half of retail investors expect to make the maximum RRSP contribution this year.

On balance, respondents are confident about investing in the markets right now. Their confidence is up slightly from last quarter.

        

What They're Buying

Secure, predictable and strong rates of return are important considerations for the majority of investors.

Most respondents prefer stocks that pay a dividend.

Investors are most interested in banking and financials, environmental technologies, oil and gas. They also remain positive about real estate. On the other hand, investing in retail, transportation and venture capital has fallen out of favour.