- Following a surge in excess savings during the pandemic,
Canadians are no longer putting as much money away - with savings
levels now returning to pre-pandemic levels
- 63 per cent say current economic conditions are negatively
affecting their ability to save for retirement
TORONTO, Feb. 7, 2024
/CNW/ - BMO's annual retirement survey reveals Millennials
(ages 28 to 44) believe they will need about $2.1M to retire, the highest among all adult
generations. The survey also revealed that, for a second
consecutive year, Canadians overall believe they need about
$1.7 million in retirement.
Demographic Age
Groups
|
Estimated Savings
Needed to Retire,
According to Survey Respondents
|
National (All age
groups)
|
$1.7M
|
Gen Z (Ages 18 to
27)
|
$1.6M
|
Millennial (Ages 28 to
44)
|
$2.1M
|
Gen x (Ages 45 to
60)
|
$1.3M
|
Boomers (Ages 61 to
70)
|
$1.3M
|
Age 71 +
|
$1.2M
|
"There is no one size fits all retirement plan and no universal
number when it comes to how much Canadians should be saving for
retirement," said Nicole Ow, Head,
Retail Investments, BMO. "We encourage people to start
planning early and consider all the factors that will affect their
ideal retirement lifestyle including family obligations, health and
wellness goals, hobbies and interests, and travel plans. Working
with a professional BMO advisor will help Canadians put their goals
into perspective and create a personalized plan to help them
achieve real financial progress and the type of retirement they
aspire to have."
Pay Yourself First
Despite economic headwinds, 62 per cent of Canadians have either
already contributed to their RRSPs in 2023 or plan to do
so. The average amount people plan to contribute to their RRSP
has increased to $6,512 in 2023 from
$5,753 in 2022.
Average Total RRSP Savings Have
Fallen
The survey found Registered Retirement Savings Plan (RRSP)
account values have fallen from elevated levels measured over the
previous two years. The average amount held nationally fell 28 per
cent to $113,070 in 2023 compared to
$144,613 in 2022. Despite the
decline, total account holdings are in line with historical
averages, with a notable increase in retirement savings reported
during the COVID-19 pandemic.
Year
|
Average RRSP Account
Holdings,
According to Survey Respondents
|
2023
|
$113,070
|
2022
|
$144,613
|
2021
|
$141,923
|
2020
|
$112,295
|
2019
|
$111,929
|
2018
|
$101,155
|
Retirement Savings Rolled
Back
Higher interest rates and inflationary pressures are also
impacting Canadians, with 63 per cent indicating current economic
conditions are negatively affecting their ability to save for
retirement.
- 37 per cent of Canadians said they are putting less money
towards retirement savings
- 44 per cent of Boomers said they are compensating for their
reduced ability to save for retirement by working longer than they
had planned
- 38 per cent of Gen Z respondents said they are putting off
saving for retirement completely
Additional Retirement Survey
Insights
- The Gender Gap:
- Men estimate on average they need $2.0M to retire, while women believe they need
$1.3M in retirement.
- Two thirds (67 per cent) of male respondents are confident they
will have enough money to retire as planned and over half of women
(56 per cent) are confident they will be able to reach their
retirement goals.
- Retirement Ages:
- Average age people plan to retire is 62 years old.
- Ideal Retirement Age cited by respondents is 55 years old. For
the youngest adult generation, Gen Z, the ideal retirement age
is 50 years old while Millennials reported a slightly higher age of
53.
- Seeking Professional Guidance:
- Over three quarters (77 per cent) of Canadians are concerned
current economic conditions are adversely affecting their finances
and over half (55 per cent) believe financial advice is more
important in the current economic environment.
- Most Canadians working with a financial professional (82 per
cent) agree their advisor is helping them reach their goals, with
two thirds (67 per cent) saying they are seeing financial growth
through the use of an advisor and three-quarters (75 per cent)
saying they appreciate a personalized financial plan.
For more information about BMO's RRSPs, please visit:
www.bmo.com/main/personal/investments/rrsp/
Methodology
This study was conducted by Pollara Strategic Insights via an
online survey of 1,510 adult Canadians, between November 3rd – 8th, 2023. The margin of error for
a probability sample of this size is ± 2.5%, 19 times out of
20.
About BMO Financial
Group
BMO Financial Group is the eighth largest bank in North America by assets, with total assets of
$1.3 trillion as of October 31, 2023. Serving customers for 200 years
and counting, BMO is a diverse team of highly engaged employees
providing a broad range of personal and commercial banking, wealth
management, global markets and investment banking products and
services to 13 million customers across Canada, the United
States, and in select markets globally. Driven by a single
purpose, to Boldly Grow the Good in business and life, BMO
is committed to driving positive change in the world, and making
progress for a thriving economy, sustainable future, and inclusive
society.
SOURCE BMO Financial Group