More than a fifth (21 per cent) of younger Canadian baby boomers haven’t saved for retirement, according to a survey by Franklin Templeton Investments Canada.
The survey, which defined young boomers as those between the age of 55 and 64, found 17 per cent of this cohort in the United States are facing a similar situation. Perhaps this is why nearly half of young Canadian (46 per cent) and American (48 per cent) boomers said they would consider postponing retirement.
Fifteen per cent of Canadians said they expect to work until the end of their life and 22 per cent said they don’t ever plan to retire. However, more than half (54 per cent) of young Canadian boomers retired earlier than expected, compared to about one-third (32 per cent) of older Canadian boomers, between the ages of 65 and 73.
“In 2009, when equity markets started to recover, many young boomers were moving up the career ladder, whereas older boomers were approaching retirement at the top of their earning years,” said Duane Green, president and chief executive officer at Franklin Templeton Canada, in a press release. “A decade later, after a long bull market run, young and older boomers are in different life situations once again . . . all while saving for that increasingly elusive retirement.”
Nearly a quarter (24 per cent) of young Canadian boomers in pre-retirement currently support a dependant family member, compared to nine per cent of retired older boomers.
“With life expectancy increasing and retirement savings becoming ever more challenging, due to the high costs of living, we are seeing increased concern over having enough money for retirement across all generations,” said Matthew Williams, senior vice-president at Franklin Templeton Canada. “Although it’s never too late to start saving, the best time to start contributing to retirement savings vehicles is when a person starts out in their career and may not have big financial commitments like a mortgage or childcare costs, and to find a way to maintain healthy savings habits as they age.”
The survey also found:
- 22 per cent of Canadian millennials said they’re more worried about medical and pharmaceutical expenses in retirement.
- 61 per cent said they don’t know how they’ll pay for these expenses.
- 33 per cent of this age group said they’re concerned about running out of money in retirement.
- 34 per cent of Canadians 11 or more years into retirement said their overall expenses have increased since they retired.