Many millennials not saving enough for retirement: Survey
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Many Canadian workers could be in financial trouble when retirement rolls around, according to a survey on finances.
A Leger survey, commissioned by Oaken Financial, found that millennials are having difficulty putting money aside for retirement.
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The three main reasons? Canadians between the ages of 18-34 blamed the high cost of living (54%), financial strain from raising kids (47%) and student loans (40%).
“Based on the survey, (millennials) seem to be having trouble … saving for their retirement or delayed savings,” said Melonie Dixon, vice-president of deposits at Home Trust — Oaken Financial’s parent company. “And it was attributed to a few factors.”
And they weren’t alone.
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Half of the respondents from Generation X (35-54) also said the cost of living had forced them to start saving for their retirement later. The cost of raising kids was also a concern for nearly two-fifths of Gen Xers (38%), but student debt was an issue for less than a quarter of them (24%).
Meanwhile, only 36% of baby boomers’ (55+) retirement savings were affected by the cost of living and the other two factors were a concern for even fewer of them: raising children (15%) and student debt (9%).
Dixon said another surprising result was that almost one-third of millennial respondents (29%) are part of what’s called the “sandwich generation” — having to financially support both their children and parents.
“We used to hear the sandwich generation being more synonymous with the baby boomers, especially given that people are living longer and longer,” Dixon explained. “But now, according to the survey, we see that there’s a shift. Now moving along to the millennials where they’re in that position.”
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By comparison, only 22% of Gen Xers and 5% of boomers are in that position now.
Despite this, nearly one-quarter (23%) of all survey respondents said they were counting on an inheritance to augment their retirement plans. In this category, younger workers once again stand out, with 30% of millennials hoping to cash in on an inheritance, as opposed to 24% of Gen Xers and 17% of boomers.
However, that may be unrealistic as 52% of respondents also say they plan to spend their money to enjoy their retirement as opposed to leaving it for an inheritance.
But Dixon said it’s never too late to start saving.
Leger interviewed 2,003 Canadians 18 and older between Oct. 3-14, 2019. The results are considered accurate within 2.2%, 19 times out of 20.
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