Retirement Olympics: Canada Beats United States
This may be of little immediate comfort to Canadians nursing the national deflation of the surprising 5-3 hockey thumping delivered Sunday night by Team USA, but when it comes to retirement security Canadians have our number.
According to a survey of Canadian and U.S. retirees by TD Bank Financial Group (PDF) Canadian retirees are a far more contented lot than Americans.
Key: Red=Canada Blue=United States
Source: TD Bank Financial Group
While nearly seven in 10 Canadian retirees are satisfied with their retirement, less than half of Americans say they are content. And American retirees are twice as likely to be seriously unhappy. Nearly one-quarter of American retirees say they are not living their retirement dream at all, compared to 12 percent of Canadians.
Slapshot from North of the Border According to TD Bank honchos, Canada's retirement contentedness is a tribute to its resolute lack of flash-both institutional and individual:
- "--Canadians' more conservative approach to finances and our country's intact banking system have given retirees greater peace of mind and an increased likelihood of living out their retirement the way they planned," said Frank McKenna, Deputy Chair, TD Bank Financial Group, in announcing the survey results.
- "There is a somewhat negative stereotype that Canadians are staid when it comes to finances. Perhaps, but when it comes to banking and investing, staid is good," added Patricia Lovett-Reid, Senior VP at TD Bank Financial Group.
Fine. We have no choice but to concede both points, but hey, how's that Own the Podium bit going? (Last I checked Sunday night the U.S. was atop the medal count with 24; Canada was in fourth place with nine.)
Advice from the Trenches
Among Canadians, 21 percent of retirees said they did not save enough to live the retirement life they planned, compared to nearly 40 percent of Americans. But among the American retirees, their "best advice" was to take better care of your health (53 percent) compared to the Canadians' tip to max out their retirement plans (48 percent.) That's actually some great advice from the Americans. (The Canadian advice is a no-brainer too.) Perhaps the American retirees were alluding to wanting to be able to enjoy travel and romping with the grandchildren. But I'd like to think they also had an eye on out-of-pocket health-care costs.
The Employee Benefits Research Institute estimates a 65-year-old married couple retiring in 2019 without employer-provided health benefits will need about $450,000 to have a 50-50 chance of covering out-of-pocket expenses beyond what is covered by Medicare. For a 90 percent probability of having enough to cover those estimated expenses, the tab rises to nearly $700,000. And even if you're lucky enough to have employer-provided benefits in 2019, you're still likely to face some serious out of pocket costs: $268,000 to have a 50-50 probability of covering health care expenses and $414,000 to have a 90 percent probability. Either way, covering your retiree health care costs will take an Olympian saving effort.