It has also showed that not including normal living expenses, respondents in their 50s, 60s and 70s expect to spend up to $600,000 on additional activities, such as travel, a second home or luxury items, during retirement.

The Expense Reality examines lifestyles, spending patterns and attitudes of both pre-and current retirees in four age groups: mid-to-late 50s, 60s, 70s and 80s. As an extension of Sun Life’s prior research brief, the retirement spending boom, the Expense Reality has concluded that pre- and current retirees expect to be heavily engaged in activities in early retirement, with subsequent activities and expenses varying by age.

According to the research, many respondents were surprised by higher than anticipated expenses in retirement, which is a trend that increases as years pass. Overall retirement expenses were higher than predicted for 36% of 60-year to 69-year olds, 52% of 70-year to 79-year olds and 66% of 80-year to 89-year olds who responded. However, when asked if they had to do it over again, retirees said they would not do anything differently except start saving earlier and/or put more money aside.

More than half of all respondents noted that health insurance or out-of-pocket prescription drug costs are the primary financial obligations beyond living expenses in retirement. 72% of 50-year to 59-year olds say they are concerned about the escalating costs of healthcare insurance they may face in retirement and 75% of 80-year to 89-year olds are currently addressing, or plan to address, financial obligations related to out-of-pocket drug prescription expenses. While respondents in their 80s are spending significantly less than younger retirees on activities, 66% noted overall expenses were higher than expected – a likely result of increased costs related to healthcare.

Mary Fay, senior vice president and general manager of annuities division at Sun Life Assurance Company of Canada, said: Our research shows most boomers and current retirees know what opportunities they want to explore and what obligations are likely to arise, but do not have a realistic idea of the associated costs. No one can predict precisely how much income they will need at any given stage in life, which is why retirement income solutions that are flexible and protect against unpredictable and unavoidable factors are so valuable.