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$668 of that going towards housing
Housing is the single greatest monthly expense Canadian retirees are facing, according to a new study.
On average, retired Canadians are spending $2,400 a month, or $28,800 a year as revealed by the BMO Wealth Management Study, with $668 of that going towards accommodation.
Next on the list is $581 for living expenses like bills, clothing and transportation. Travel expenditures add up to an average of $282 a month, while medical expenses cost retirees an average of $151 a month.
Average monthly expenses varied across the country. Atlantic Canadians are spending the least per month, at $1,975, while Albertans are forking over the most at $2,648.
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Canadian retirees aren’t just spending their money on practical expenses, however.
More than half of those surveyed, or 55%, admitted to having splurged around $10,000 or more in retirement. Around 41% said they’re blowing their funds on new vehicles, 22% said they’re doing major renovations on their homes and 11% admitted to giving large amounts of money to family members.
“Many retirees have been saving for retirement for decades so it’s important that, once they reach this life event, they use their saved income effectively. It’s clear that there are a myriad of expenses—and splurges—that could deplete your nest egg,” Robert Armstrong, vice president of BMO Global Asset Management, said in a press release.
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The survey also asked participants what surprised them the most in retirement. Interestingly, 25% said that they were spending less money than they expected, while 25% were also surprised that their savings weren’t as adequate as expected. Around 21% said that they were spending more money than anticipated.
And despite saying goodbye to the traditional, daily work-grind, 37% of retirees said they were surprised at not having enough time in the day for everything they’d like to do.
“It’s important to give thought to the type of lifestyle you want in retirement, including where you want to live, how you want to spend your time and with whom,” said Armstrong. “Having a good idea of what your ideal retirement lifestyle looks like can help you create a customized financial plan that will ensure you have the savings necessary to do everything you’d like in your later years.”
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I moved to Europe from Canada and find major items cheaper, because the govmt. helps keep all citizen living off the streets, not like in Canada.
1st. Mortgages, 80% of all Dutch people have not paid 1 cent to their mortgage, they pay only the interest. What a savings. No one is living on the street Canada!
2nd Food is local and cheaper. If Cdn would eat more Cdn foods it would be cheaper ie. fish, oats instead of junk sugar products. Vehicles in proportion to their requirements, not 4×4 and having more than one car per household. Cheap public transportation, competition with internet (I pay $22.00 a month for a phone, its way too much in Canada, (even though Trudeau says 25% discount will be sought after). No or little property taxes, all this is tax deducted, bring back Joe Clark and his ideas that everyone though was foolish. Imagine tax credits on mortgages, car etc. Why are Canadians paying more than the world?
WoW! That sounds amazing!
I distinctly remember my parents’ financial dream when I was a kid: “No debts and $5,000 in the bank”. It had a kind of concise simplicity to it that made it attractive. So attractive in fact that I used a version of it as my retirement target: “Positive cash flow from pensions and benefits plus an amount X (which became $50,000) in retirement savings”. My income from pensions and benefits is about $2,000 a month. I then set about engineering a lifestyle where I could live on less than $2,000 a month. Easy peasy and it works. I added some embellishments like staying a month ahead on expenses in my chequing account. The $50,000 in savings I don’t touch unless I have to. I use it like a big emergency fund. I basically broke every rule in the retirement planning books (no $1 million RRSP, minimal to no stock exposure, saved only what I could when I could and nothing more) and yet here I am – retired and sleeping well.
I am constantly worried that I will not have enough. I receive $ 4577 net per month.
$2000-2500 comfortably covers my needs and most wants except for international travel. No debt is key. I live in NS where taxes and food are higher than other parts of the country. I moved here 3 years ago and am on the water. And I agree with Ken, living in Europe was better financially. I am happily living my very early retirement. I don’t worry about much these days. Too busy having fun and laughter and giving back.
Older people don’t have time on their side when in comes to market returns. They cannot say I will wait for the markets to recover before I take my money out.
This is not an option.. They must keep their money in safe places and
pay what they need to secure their lifestyle. Health issues can cause their expenses to increase significantly in a very short period.
Low interest rates and inflation work against the senior securing enough money to pay their bills.
Going back to work is not a option. I would like to see a guaranteed income provide to this group. This is very feasible with the right planning. Keeping these people healthy at home is the least cost option for government. Lets get this program working for these folks.
TRUST plus GULLIBLE will end in defeat.
At the age of 83 I am living on OAS and CPP because I trust and I am guilty of being gullible.
In 1994 I was offered a position working for an Estate in Toronto but decided not to accept as I am a single woman and I must have medical coverage and a pension. I explained this to Mrs. Cottrelle and we agreed that I would try the position and if it worked out she would consider my request. The position worked out very well and soon I had medical coverage and as for the pension I had her word that “as long as there is a Cottrelle you will be looked after”. Mrs. Cottrelle and I as well as her daughter Janet became great working friends, but her words came back to haunt me.
I have 100% trust in Mrs. Cottrelle. I knew she meant what she said. However, circumstances unforeseen happened and I do not have that promise in writing. Mrs. Cottrelle sadly and very quickly became unable to remember or recognized anything or anyone.
Upon my retirement in 2019 I received one year salary as severance which I was very happy about. I then sent a request regarding the pension and the response was very disappointing. Janet had sadly passed away and the decision to not honor the promise was made by the two sons. I received a lengthy legal document offering an additional six months pay if I would sign off and of course I refused as that was not the promise that was made to me.
So, my message to all of you who are gullible: when you are making an arrangement be it personal or business, do not make a decision by the heart but listen to your brain. Get a signature even if it is on a posted noted and be sure to keep it in a safe place as you never know how circumstances will change and it will be needed.