"Having a holistic plan in place that includes insurance, wealth, and health solutions has never been more important," says expert
One-third of Canadian Boomers (individuals aged 58-77) are experiencing higher-than-expected living expenses in retirement due to health-related costs, according to a new survey by Ipsos for Sun Life. The survey, conducted between August 30 and September 1, 2023, included 750 participants from each of the Millennial (aged 27-42) and Boomer age groups.
The survey finds that 32 percent of Boomers in retirement identify healthcare costs as a major factor contributing to higher living expenses, ranking second only to inflation (83 percent). Additionally, housing costs were cited by 31 percent of Boomers, while market volatility impacted 23 percent of respondents. These factors collectively contributed to the unanticipated financial burdens experienced by many retirees.
Sun Life Canada's president, Jacques Goulet, highlights the lack of preparation and awareness among retirees regarding “the out-of-pocket medical expenses in retirement.
“These costs can have a significant effect on retirement, especially for those living with a chronic physical or mental health condition that requires ongoing treatment. With the cost-of-living climbing, a holistic plan that meets your health and financial security needs can help prevent this financial burden later in life.”
The survey also finds that nearly half (49 percent) of Boomers report having a chronic physical or mental health condition necessitating medication or treatment. Among this group, almost one-third (32 percent) had either considered or already made changes to their retirement plans to accommodate health-related costs.
Takeaways for Millennials
The survey finds a similar trend among Millennials. Thirty-one percent report having a chronic physical or mental health condition requiring medication or treatment.
However, more than half (52 percent) of Millennials with such conditions had not factored in the cost of managing their health conditions into their retirement plans. This issue was particularly pronounced among women, with 61 percent not accounting for these costs, compared to 43 percent of men.
“Having a holistic plan in place that includes insurance, wealth and health solutions has never been more important,” says Rowena Chan, president at Sun Life Financial Distributors (Canada) Inc. and senior vice-president of retail advice and solutions. Chan encourages Canadians to engage in conversations with trusted professionals to enable them to enjoy a secure retirement.