A BMO study finds 47% of millennials are optimistic about their ability to afford their ideal retirement lifestyle, compared to just 35% of baby boomers.
Further, millennials report they feel they will need, on average, more than $400,000 saved to live their ideal retirement lifestyle. This is $60,000 more than boomers feel they need. The study reveals the retirement savings targets, as well as the RRSP savings to date for both age groups:
- millennials say they need an average of $441,610 saved for retirement and currently have an average of $15,194 saved in their RRSPs; and
- boomers believe they need an average of $385,184 saved for retirement and currently have an average of $65,394 saved in their RRSPs
Read: Boomers, millennials worry about economic situation
“Considering how much time millennials have to save for retirement, their confidence in their ability to reach their target makes sense,” says Chris Buttigieg, senior manager, wealth planning strategy, BMO Financial Group. “However, they should definitely take heed of any lessons learned from their parents on what works and what doesn’t with saving for retirement.”
He also notes being much closer to retirement would cause boomers to be less optimistic about reaching their financial goal. However, 32% of them are excited at the prospect of being retired, compared to only 22% of millennials.
Read: Millennials invest early, think long term
The study also identifies the biggest concerns of these two groups about retirement. The top worry for both millennials and boomers is not having enough saved to do all the things they want to do in retirement (40% and 44%, respectively).
Other worries identified include:
- declining physical abilities and mobility (38% of millennials vs. 43% of boomers);
- poor health and/or the prospect of dying (38% of millennials vs. 24% of boomers);
- spending more money than they had planned (27% of millennials vs. 22% of boomers); and
- being bored (29% of millennials vs. 19% of boomers).
“Millennials and boomers generally share similar concerns at the prospect of being retired,” says Buttigieg. “While it’s not as easy to control deteriorating health and physical capacities, you can take charge of your financial future and be well-prepared for retirement from a fiscal standpoint.”
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