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Build and Protect Your Nest Egg With a Plan. Then Stick to It

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Toronto, January 19, 2006 -- A survey by Desjardins Financial Security (DFS) indicates that at the height of investment season, Canadians might be spending more time planning their winter getaways than their financial futures.

According to the fourth annual DFS retirement survey, six out of ten workers aged 40 years and older (59%) have a retirement savings plan, and just over half of retirees (52%) have a strategy in place for the management of their savings in retirement. But of the respondents in these two categories, only half follow their retirement plan. The reality is most people rather spend more time perusing tourism brochures and following through with travel arrangements than reading about financial topics and staying on top of their financial plan.

Although these workers and retirees agree that the primary objectives of a retirement plan are to provide income and protect against unexpected events, roughly only half of them have a plan in place, which begs the question: are retirement savings given enough priority?

"We know that once people take the time to develop a retirement savings plan, approximately half of them implement it completely (46% of workers and 52% of retirees)," said Monique Tremblay, senior vice president of the Savings and Segregated Funds division at Desjardins Financial Security. "It's the other half of the group that we're more concerned about - those who only partially implement their plans (44% of retirees and 53% of workers) and those who don't implement them at all (4% of retirees and 1% of workers). Getting to the planning phase counts, but that's only half the battle. There's clearly a lack of follow through. It's comparable to doing all the planning for your holiday and then intentionally missing the boat, and, more likely than not, ending up with no vacation at the end of the day," added Tremblay.

Canadians prefer the handy-man approach for retirement planning

There are a number of options for planning, from do-it-yourself to seeking advice from a financial advisor. The survey revealed that the most popular method for retirement planning and retirement savings management in Canada is do-it-yourself. Half of retired respondents (47%) and 38% of workers say that they were involved in preparing their plan. Financial advisors were the next most often cited source of help in this venture (28% for retirees and 31% for workers), followed by financial institution advisors (17% for retirees and 19% for workers), with friends and relatives in a tie for third among retirees (9% for retirees and 16% for workers).

A third of Canadians manage all of their retirement savings on their own. Another 44% consult with an advisor but ultimately make the final decisions. Only 12% rely completely on advisors to plan their retirement and 10% have no method of managing retirement savings.

Canadians rely on various sources for financial information

When it comes to sources of investment information, respondents thought the top four most reliable sources were financial advisors (39%), family and friends (27%), the Internet (19%) and banks and credit unions (18%).

When it comes to the subject of knowledge, half of all Canadian respondents claim to have only limited knowledge of retirement savings and another 10% admit not having any knowledge at all. This leaves a third of Canadians who believe they have a good understanding of retirement savings and investments and fewer than one in 10 who say they have advance knowledge of this subject matter.

Interestingly, Canadians who manage their retirement planning on their own were more likely to say they had no knowledge of savings and investments (10%), while those who rely completely on a financial advisor for their financial planning were more likely to have limited knowledge (62%), and those who listen to their advisors but ultimately make their own decisions more often claim to have good knowledge (44%). Age and assets are the leading factors for advanced investment knowledge.

"Most people don't travel on a whim to a place they've never been before without consulting a travel expert. According to our survey, the same can't be said for financial planning," said Tremblay. "A trusted financial advisor can help you plan for retirement and ensure you are accounting for increased costs of living and unexpected health care costs, which one-fifth of the retirees in this survey said were the two main reasons they were spending their savings faster than expected."

Tremblay concluded, "Peace of mind for your financial future and that winter vacation can be yours. All it takes is some planning and follow through with pertinent assistance along the way. The decision is yours, but make sure you have enough information before you make your choice."

About the Survey
CROP and Environics conducted the survey on behalf of Desjardins Financial Security between June 29 and July 31, 2005. In total, 1,500 interviews were conducted with a representative sample of Canadian adults. The sampling plan provides proportional estimates with a maximum margin of error of plus or minus 2.5% at a 95% confidence level (19 times out of 20). The data was statistically weighted to accurately reflect the composition of Canadians by region, gender and age based on Statistics Canada's 2001 Census information.

About Desjardins Financial Security
Desjardins Financial Security, a subsidiary of the Desjardins Group, the largest cooperative financial group in Canada, specializes in life and health insurance as well as retirement savings. Over 5 million Canadians rely on it every day to ensure their financial security. Desjardins Financial Security employs 3,628 people and manages more than $16 billion in assets. The company has offices in a number of cities nation-wide: Vancouver, Calgary, Winnipeg, Toronto, Ottawa, Montreal, Quebec City, Levis and Halifax.

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