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Retirement ReadinessMilvia Green, Michael Bean

June 2, 2011

Agenda

• Introductions and Objectives

• What is retirement readiness

• The decade that was

• The decade to come

• Where does the $ go and what vehicles for investment

• Behaviors of note

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Retirement Readiness

• A state of preparedness by an individual to enter retirement. This typically means that the individual has planned for retirement and is financially secure. Retirement readinessmay also be used to describe people that are actively preparing for a retirement at a certain date in the future.

• Retirement readiness involves three main elements: being financially, mentally, and physically ready to retire.

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Investorwords.com definition

The Decade that was!

• Recession

• Housing Collapse

• Financial Meltdown

• Business Firestorm

• Currency Collapse

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The Decade to Come

• Shifts in demographics

• Canadians are retiring earlier, living longer and leading more active lives in retirement

• National savings rates are low with an increased pressure for individuals to fund their retirement

• Growing responsibility for individuals to account for their financial security in retirement

• Provision of appropriate policies, education and vehicles with which to save

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Where Does the $ Go

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53

19

11 8 9

% division of regular income

Scotiabank survey conducted by Harris/Decima Feb 2011

Where Does the $ Go

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79

52

21

2

17

61

13

% of savings held by household

Scotiabank survey conducted by Harris/Decima Feb 2011

Where Does the $ Go

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67

58

48 47

33

Regular Savings

Mutual Funds

HISA Stocks / Equities

GIC

% Allocation by Product

Scotiabank survey conducted by Harris/Decima Feb 2011

Meeting Retirement Needs

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Investments Set Aside for the Future

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Sources of Retirement Income

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Sources of Retirement Income (cont.)

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So Let’s Reflect

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Willingness to Take Investment Risk

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Behaviours

• Views on life changing events changing – impacts?

• What do people want to know?

• Where do people get the answers?

• Students – manage loans, living cost after school

• New job – credit, balance of spend and save

• Married – pay down debt, house, mortgage

• Children – savings, school

• Mid-life – RRSP, investments, pensions

• Pre-retirement – taxes, withdrawals, income

• Retirement – taxes, withdrawals, income

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Barriers Age 20-34

• Barriers to learning• What do they want

• Complexity of financial products

• Time to make money

• Unpredictability of job market

• Cash flow

• Key terms• Credit cards / Debt avoidance

• New job / Saving / Budgeting

• Married / credit rating / loans

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Barriers to Learning Age 35+

• Financial concepts and their complexity

• Time to find the right information - learning

• Time to build capital – or dreams – or play

• Competing demands for money (all the little things)

• Unplanned life events – support for the aging baby boomers

• Unpredictable job market

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Learning

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Learning

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Summary

• Financial security vs. financial freedom

• How to spend your time is the heart of retirement –you can do what you want (provided you plan)

• Many think they will never retire – look at those coming back into the market today (if only I had …)

• Work is part of us – increase to retirement age

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Market

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Household Financial Wealth

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Delivery Channels – Direct versus Advice

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Deposit Market by Tax Status

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Provincial View – Deposits and Fixed Term Assets (in billions)

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Provincial View by Size and Growth

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