A recent study has found that while Canadians are generally effective at saving for retirement, many are inadequately prepared for the non-financial aspects of later life, such as long-term care and housing adaptations. The research, released Tuesday by Manulife Financial Corp. in collaboration with the Massachusetts Institute of Technology's AgeLab, assigned an average overall retirement preparedness score of 60 out of 100 to Canadians.

The study evaluated readiness across eight categories, including finances, health, housing, care, and relationships, based on a survey of about 1,000 Canadian adults aged 18 and over conducted in June. Canadians rated highest in financial preparedness, with an average score of 66. However, notable deficiencies were evident in planning for health and caregiving needs as they age.

Care preparedness scored the lowest, at 40 out of 100. This dimension measured whether respondents had considered how suitable their homes would be as they grow older, researched long-term care options, or discussed their preferences about future care with family members. Housing preparedness also scored relatively low at 53, reflecting limited consideration of modifications such as accessible entrances, main-floor living spaces, or mobility aids.

Joseph Coughlin, director of the MIT AgeLab, emphasized the unprecedented challenge posed by longer lifespans. "We've never had a population this large living this long," he said, noting the scarcity of guidance on how to prepare for potentially decades of retirement. Patrick Graham, chief executive officer of Manulife Canada, underscored that increased longevity does not necessarily translate to sustained health and quality of life. He warned that many retirees might find their later years more challenging than anticipated.

Data from Statistics Canada corroborate these concerns, showing that although life expectancy continues to rise, the number of years Canadians can expect to live in good health has decreased since 2017, predating the COVID-19 pandemic. The study suggests that individuals’ difficulty in envisioning their future needs might contribute to the lack of adequate preparation. "The volume, the velocity and complexity of daily life makes it very difficult for me to anticipate my life tomorrow," Coughlin observed.

The Canadian preparedness index established through this research serves as a benchmark to monitor progress over time. Comparable results from the United States indicate similar levels of preparedness, with Americans also averaging a score of 60 out of 100. The findings highlight the multifaceted nature of retirement readiness and the need for broader awareness and planning beyond financial savings alone.