Almost a quarter of Canadians expect their homes will be their primary source of income when they retire, a new survey suggests.

With residential home values at or near all-time highs in many cities across Canada, it appears many people are eyeing their homes' market value as a store of potential income after they stop working.

The survey found 24 per cent of those polled planned to use their homes as their main retirement income. Another 17 per cent indicated they didn't know if their home equity would serve as their primary income source..

Even among those who said they are not currently anticipating having to tap into their home equity in retirement, the reality is that future market dynamics may force a rethink of that strategy.

"With an already overheated market, there may be additional pressures from upcoming retirees who feel they lack enough savings for their retirement," said Sadiq Adatia, chief investment officer at Sun Life Global Investments, in a statement. "As a result, they may feel the need to downsize their homes for additional income due to these economic conditions."

On average, Canadians expect 10 per cent of their retirement income to come from home equity. They expect the rest of their retirement income will come from the following sources:

  • 30 per cent from government plans.
  • 27 per cent from personal savings.
  • 23 per cent from employer plans.
  • 5 per cent from inheritance.
  • 6 per cent from other sources. 

The results underscore the reality that many Canadians don't think their own retirement savings and government plans together will be enough to support them in retirement. Statistics show about 60 per cent of Canadians are not members of any pension plan at work.

Canadians also appear to have abandoned the idea of early retirement.

The survey found only 28 per cent of Canadians expect to be fully retired by age 66. Twice as many Canadians (56 per cent) say they expect to work beyond the normal retirement age of 65, with two-thirds of them reporting they'll need to work.   

The Sun Life retirement survey was carried out by Ipsos Reid between Nov. 12 and Nov. 20. Just over 3,000 Canadians between 30 and 65 years old were contacted for online interviews. The results were then weighted to ensure balanced demographics.