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BMO Financial Group

February 19, 2015 07:00 ET

BMO Private Banking Provides "Snapshot" of an Affluent Canadian's Retirement

- On average, high-net-worth Canadians plan to retire at age 60 and feel they need an average of $2 million for retirement

- Almost all will spend their golden years in Canada

- Travel, time with family, hobbies and volunteering will fill their time during retirement

TORONTO, ONTARIO--(Marketwired - Feb. 19, 2015) - BMO Private Banking today released the results of a study examining what retirement looks or will look like for high-net-worth Canadians (those with investible assets of $1 million or more). The study is part of a series examining trends among Canada's affluent.

According to the study, the affluent in Canada:

  • Will retire, on average, at the age 60
  • Feel that they need an average of $2 million to live out their ideal retirement lifestyle*
  • Plan to stay in Canada during their retirement years (91 per cent)
  • Want to spend their retirement years traveling (83 per cent), spending time with family (73 per cent), focusing on their hobbies (52 per cent) and volunteering (40 per cent)

"With retirement, it's important to think about the big picture - everything from when you want to retire, to where you'd like to live, to what you plan to do with your time," said Myra Cridland, Head, BMO Private Banking. "Regardless of your income level, consider speaking with your family or people close to you, give serious thought to how you want your retirement to look, and then work with a financial professional to create a wealth plan that is tailored to your changing lifestyle as you head into this next phase of your life."

Investing Profile of High-Net-Worth Canadians

The study also revealed that the vast majority (96 per cent) of affluent Canadians have an investment portfolio or share one with their spouse/partner. The average amount of money in their portfolio is $2,127,411, and nearly one quarter (23 per cent) of wealthy Canadians have more than $2 million in their portfolio.

In terms of how they intend to use the money in their investment portfolios:

  • Ninety-one per cent plan to use it to fund their retirement
  • Forty-two per cent plan to use it as an inheritance for their family
  • Almost one quarter (23 per cent) plan to use it as income

According to the study, almost two thirds (62 per cent) of wealthy Canadians with an investment portfolio consider themselves to be balanced investors, 24 per cent are conservative and 14 per cent are aggressive investors.

"Given that so many affluent Canadians plan to use their investments to fund their retirement or to take care of their family in the future, it's crucial that their portfolios are properly structured in order to ensure that their wealth is insulated for the long term," said Richard Mason, President and CEO of BMO Private Investment Counsel Inc. "Having a properly diversified portfolio that takes into account your age, life stage, income requirements and risk tolerance, along with your short- and long-term goals, is key to successful investing."

Regional Breakdown:

Region Average age of retirement % who plan to retire in Canada Average $ amount needed for retirement Average $ amount in investment portfolio % of affluent Canadians with an investment portfolio % who plan to use the money in investment portfolio to fund retirement % with investment portfolio who consider themselves balanced investors
National 60 91 2,300,000 2,127,411 96 91 62
Atlantic 56 90 2,100,000 1,390,154 90 85 58
Quebec 58 90 2,400,000 1,526,129 100 90 58
Ontario 60 91 2,200,000 2,414,872 95 89 65
Alberta 61 90 2,400,000 2,012,234 98 98 66
B.C. 59 92 2,200,000 3,065,889 94 98 60

Survey results cited in this study are from an online survey that was conducted by Pollara between October 15th and 28th, 2014 with a sample of 306 Canadians 18 years of age and older, who have at least $1 million in investable assets (excluding employers retirement plans, insurance products or their home).

*This survey result is from an online survey that was conducted by Pollara between March 28th and April 11th, 2013 with a sample of 305 Canadians with at least $1 million in investable assets. The margin of error for a probability sample of this size is ± 5.6%, 19 times out of 20.

About BMO Private Banking (formerly BMO Harris Private Banking)

Backed by the stability and resources of BMO Financial Group, professionals at BMO Private Banking are responsible for the successful management of wealth by providing expert advice and highly personalized services -- all in a coordinated approach. Banking services are provided by Bank of Montreal. Investment management services are provided by BMO Private Investment Counsel Inc. Wealth planning, estate, trust, succession planning, business transition and philanthropic services are provided by BMO Trust Company.

For more information on BMO Private Banking, please visit http://www.bmo.com/privatebanking

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