What do you picture when you think of retirement? More time to spend with family and friends. More time to travel and see the world. More time to enjoy hobbies. More time to volunteer and give back to others.

While working Canadians focus on saving for retirement to enjoy the gift of time, many overlook the impact health issues will have on both their plans, and their wallets.

While Boomers are facing the reality of health care costs in retirement, Millennials are following in similar footsteps.

In a new survey conducted by Ipsos for Sun Life, nearly a third (32%) of Boomers (fully or partially retired aged 58-77) cite health care costs as a factor causing their cost of living to be more expensive than anticipated in retirement, second only to inflation (83%). Housing costs (31%) and market volatility (23%) round out the top four reasons Boomers say their cost of living is higher than anticipated.

"Many retirees are not prepared or aware of the out-of-pocket medical expenses in retirement," said Jacques Goulet, President, Sun Life Canada. "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," Goulet added.  

Nearly half (49%) of Boomers surveyed shared that they have a chronic physical or mental health condition that requires medication or treatment. Of those living with a chronic condition, nearly a third (32%) have or have considered changing their retirement plans to pay for health-related costs.

Lessons for Millennials

While Boomers are facing the reality of health care costs in retirement, Millennials are following in similar footsteps. Nearly a third (31%) of Millennials (aged 27-42) have a chronic physical or mental health condition requiring medication or treatment. Yet, over half (52%) of Millennials with a chronic health condition have not factored the cost of managing their chronic condition into their retirement plan. When broken down by gender, 61% of women and 43% of men have not factored in these costs.

"Having a holistic plan in place that includes insurance, wealth and health solutions has never been more important," said Rowena Chan, President, Sun Life Financial Distributors (Canada) Inc., Senior Vice-President, Retail Advice & Solutions. "Sun Life advisors specialize in helping Clients develop a creative strategy to help them understand the costs of aging, grow their wealth, and ensure all aspects of life are supported. These critical conversations with a trusted professional will enable Canadians to enjoy their retirement."