A survey released on Wednesday says 21 per cent of Canadian young baby boomers, aged 55 to 64, have not saved anything for retirement.
Franklin Templeton’s 2019 Retirement Income Strategies and Expectations (RISE) survey also found 46 per cent of Canadian young boomers would consider postponing retirement and 15 per cent of Canadians expect to work until the end of their life.
When looking specifically at self-employed Canadians, 22 per cent don’t ever plan to retire.
“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 CEO of Franklin Templeton Canada, in a news release.
“A decade later, after a long bull market run, young and older boomers are in different life situations once again. We see many older boomers benefiting from the transfer of wealth from their parents, yet the young boomers have had a challenging experience balancing more expensive lives – due to caring for elderly parents and still having financially dependent children – all while saving for that increasingly elusive retirement.”
The report said 54 per cent of Canadian young boomers retired earlier than expected compared to 32 per cent of older boomers aged 65 to 73.
It said 24 per cent of Canadian young boomers, in pre-retirement, currently support a dependent family member, compared to nine per cent of retired older boomers. The top three sacrifices that young boomers had made for a dependent were: saving less money, cutting back personal spending and withdrawing from personal savings. They were least likely to use employer vacation time or take unpaid time off work for caregiving, said the report.
“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 of 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.
“Those who are employed by a company that offers a group RSP or pension that allows employees to make contributions directly from their paycheque—and potentially even receive a company match to their contributions—should fully take advantage of this benefit and potential ‘free’ money, as it will assist their retirement nest egg in compounding over time.”
– Mario Toneguzzi