More Than Six in 10 Canadian Pre-Retirees Expect to Work Past Age 65, Finds
Munich Re Survey
TORONTO -- November 21, 2012
Concerns related to rising healthcare costs are weighing on the minds of
Canadian retirees and pre-retirees according to a new survey conducted by
Munich Re. These concerns are cited as a key factor for individuals deciding
to delay retirement.
More than 60 percent of those nearing retirement plan to work longer to hold
onto their benefits. Among active employees receiving healthcare coverage from
their employer, 30 percent cited continuation of health and dental benefits as
the main reason to keep working past 65 years of age.
“As Canadian workers have taken on a greater share of the burden for
post-retirement healthcare expenses, too many find themselves financially
ill-prepared to do so,” said Richard Letarte, Senior Vice President, Group
Reinsurance at Munich Re. “Working longer to receive employer-sponsored
benefits may be a solution for some, but over the long run this is not a
sustainable plan of attack for those nearing retirement. Private insurance, as
part of a sound financial plan, can provide Canadians with a safety net to
protect against potential future healthcare costs which continue to rise at a
rate outpacing inflation.”
Canadians expect to spend an increasing proportion of their retirement income
on health-related needs as they age, with nearly seven in 10 (68 percent) in
agreement that healthcare will account for a greater percentage of their
expenses. At the same time, relatively few are financially ready for or
understand the magnitude of potential future healthcare costs. According to
the survey, less than one-third (32 percent) are financially well-prepared to
deal with health needs during their retirement years and only 26 percent are
confident they could financially handle a sudden, unexpected illness or
accident during their retirement without compromising their lifestyle.
Furthermore, almost half of survey participants estimated the total cost of
their employer sponsored health benefits to be less than half of the actual
“Whereas in the past the majority of Canadian workers could rely on their
employers and the government to cover a significant share of their healthcare
costs in retirement, the landscape has changed,” said Faizel Alladina,
Vice-President, Group Development at Munich Re. “Canadian retirees will be
responsible for a much larger percentage of their healthcare costs. These
costs, which continue to rise each year, can be prohibitive. Annual drug costs
alone can cost tens of thousands of dollars for newer specialty drugs being
developed by drug manufacturers for health conditions like cancer and
rheumatoid arthritis, and for other less common conditions, these costs can be
in the hundreds of thousands. Many of these drugs are not covered by
provincial pharmacare programs for seniors and can leave individuals exposed
to provide for these expenses themselves,” says Mr. Alladina.
Canadians today largely understand that the burden for paying for future
healthcare costs has shifted away from the government. Just one in 10 (11
percent) of those surveyed believe that the government will take care of all
costs if they become sick during their retirement years and slightly more than
three-quarters (77 percent) understand that the government covers only part of
what they will need.
About the Survey
The online survey of 2,032 Canadians on the Ipsos I-Say Canadian Online Panel
was conducted between December 7, 2011 and December 16, 2011 and between
January 17, 2012 and January 23, 2012. The survey targeted Canadians aged 55
to 70 who are or have been members of an employer-sponsored health and/or
dental plan: 1,000 Canadians who are still working and not yet retired and
1,000 Canadians aged 55 to 70 who have retired within the past five years. A
random sample of this size (2,032) would have had a margin of error of +/-
2.2% nineteen times out of twenty.
Note for the editorial staff:
For further questions, please contact
Media Relations Toronto, Shawn Elliott
Munich Re stands for exceptional solution-based expertise, consistent risk
management, financial stability and client proximity. Munich Re creates value
for clients, shareholders and staff alike. In the financial year2011, the
Group – which pursues an integrated business model consisting of insurance and
reinsurance – achieved a profit of€0.71bn on premium income of around€50bn.
It operates in all lines of insurance, with around 47,000 employees throughout
the world. With premium income of around €27bn from reinsurance alone, it is
one of the world's leading reinsurers. Especially when clients require
solutions for complex risks, Munich Re is a much sought-after risk carrier.
Its primary insurance operations are concentrated mainly in the ERGO Insurance
Group, one of the major insurance groups in Germany and Europe. ERGO is
represented in over 30 countries worldwide and offers a comprehensive range of
insurances, provision products and services. In 2011, ERGO posted premium
income of€20bn. In international healthcare business, Munich Re pools its
insurance and reinsurance operations, as well as related services, under the
Munich Health brand. Munich Re's global investments amounting to€202bn are
managed by MEAG, which also makes its competence available to private and
institutional investors outside the Group.
Media Relations Toronto
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