Younger Canadians feel that they are not getting ahead financially and they shouldn’t count on an inheritance, according to the Manulife Financial’s latest Investor Sentiment Index.

Forty-six percent of Canadians ages 25 to 34 say they are worse off financially than they were two years ago, while 40% of those ages 35 to 44 say they are worse off financially.

Despite that, 62% of Canadians ages 25 to 34 say they’re optimistic that they will be in a better financial position two years from now, while 60% of those ages 35 to 44 say they remain optimistic for the future.

The latest survey results also show that it isn’t likely that younger Canadians—part of a generation that has traditionally been challenged by a difficult job market and underemployment—will receive much help in the form of future inheritance.

Forty-three percent report that they haven’t given any thought to how much cash or assets they’ll leave to their heirs. As many as 13% say they plan to leave nothing, while 29% say they will leave less than $100,000. Only 2% of Canadians report that they will leave an inheritance of $1 million or more.

“The reality is that young Canadians will be the first generation to not be better off than their parents. Many Canadians haven’t even thought about what cash or assets they will leave to their children,” says Paul Lorentz, executive vice-president, retail markets. “Young Canadians might need some of the financial discipline of their great-grandparents, those who lived through the Depression, coupled with modern financial solutions.”

The results also point out that Canadian investors of all ages have made one significant shift in their financial priorities for 2014.

In 2013, the top priority was paying down debt (31%) while still maintaining their current lifestyle (22%). Today, only 1% of Canadians indicate that maintaining their current lifestyle is a financial priority, a drop of 21 percentage points.

Regardless of income or age, Canadians’ top financial priority for 2014 is to pay down debt (29%), followed by reducing spending (11%), saving for retirement (9%), saving for a rainy day (8%) and paying down a mortgage (8%).

“We’re seeing that debt management, reducing spending and saving are, more than ever, top of mind for Canadians but, just as importantly, that Canadians are also more aware of the financial choices they’re making,” Lorentz adds. “They’re making good financial decisions to put their finances in order for the future, even knowing that they may not be able to maintain their current lifestyle because of them.”

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Copyright © 2020 Transcontinental Media G.P. Originally published on benefitscanada.com

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joe mottishaw:

The reason many younger persons are feeling they are financially worse off is they haven’t been taught financial constraint. There’s a big difference between need and want and many young people don’t understand the difference. They are much more carefree and impulsive than our generation and saving for their future isn’t in their makeup. They need to spend less, save more and lower their expectations of fancy houses and vehicles.

Thursday, January 09 at 1:01 pm | Reply

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