So called Gen X and Gen Y investors are confident about their ability to achieve their financial goals, but that confidence may be misplaced, says a new report from the BMO Wealth Institute.

The report examines the financial attitudes of Gen X (people born between 1965 and 1979) and Gen Y (born between 1980 and 2000). For example, it finds that overall, 68% of both populations feel confident that they will have the ability to purchase a home at some point in their lives. A similar share also expect to be able to pay for the kids’ post-secondary education. And, almost two-thirds are optimistic about their ability to save enough to live comfortably in retirement.

However, the report warns that there are a series of challenges that might dash these dreams. In terms of home ownership, it notes that an average home in Canada now costs nearly eight times the average pre-tax annual income of a full time job (compared to five times in 1997), “meaning that Gen X and Y’ers will need to work harder, longer and save more than previous generations to accomplish the goal of home ownership.”

In terms of funding higher education, the report says that this will likely be a challenge for many, given that younger Canadians are choosing to have children at an older age than previous generations, meaning that many may be retirees with kids that are still young enough to be in post-secondary education. “This trend, combined with the growing costs of a post-secondary education (it is estimated that the cost of sending a child born in 2013 to university will be as high as $140,000), will likely contribute to financial stress as Gen X and Y endeavour to send their children to universities and colleges,” it says.

Finally, the report says that the confidence these generations have in their retirement “is undermined by the fact that many among both groups have not yet started saving for their retirement.” Coupled with the decline in employer-sponsored pension plans, and longer life spans, peolpe need to budget for a longer retirement, it adds. “All these factors are making it an uphill battle for both cohorts, as it relates to having enough money for their golden years,” it says.

“While it’s encouraging that the majority of Gen X and Y are feeling upbeat about achieving key financial goals, the reality is that there are some obstacles that they need to acknowledge and address if they want to accomplish things like home ownership, ensuring their children obtain a post-secondary education and achieving their ideal retirement lifestyle,” said Chris Buttigieg, senior manager, wealth planning strategy, BMO Financial Group.

The report is based on BMO survey conducted by Pollara between November 6 and November 11, 2013, with a sample of 1,413 yet-to-retire Canadians between the ages of 18 and 67. Overall results for a probability sample of this size would be accurate to +/- 2.6%, 19 times out of 20.