A new survey finds that slightly more than one-fifth of pre-retirement, young baby boomers in Canada (aged 55 to 64) have saved nothing for retirement.
According to Franklin Templeton Investments Corp.’s 2019 Retirement Income Strategies and Expectations (RISE) survey, 21% of Canadians in this demographic have zero retirement savings. The study also found that 46% of young boomers would consider postponing retirement, and 15% expect to work until the end of their life.
But, according to the survey, things don’t always go according to plan: 54% of young boomers retired earlier than expected, compared to 32% of older boomers (aged 65 to 73). Of those who retired earlier than planned, 34% of young boomers did so due to circumstances beyond their control, while only 20% of older boomers reported the same.
“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,” Duane Green, president and CEO of Franklin Templeton Canada, said in a statement.
“A decade later, after a long bull market run, young and older boomers are in different life situations once again,” Green continued. “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.”
Indeed, the survey found that 24% of young boomers in pre-retirement are caring for a dependent family member, which has caused them to save less money, cut back on personal spending and withdraw from their personal savings. More than half (52%) of Canadians approaching retirement in the next five years are concerned about outliving their retirement assets.
Franklin Templeton also found that 47% of young boomers work with a financial advisor, and that 96% of them are saving for retirement (compared to 59% for young boomers who don’t use an advisor). Seventy-seven percent of young boomers who work with an advisor are confident their retirement strategy will generate income to last 30 years or more, while only 45% of those who don’t have an advisor feel the same.
Other notable findings from the survey include: 21% of Canadians planning to retire in the next five years still have children living at home, and 31% are still paying a mortgage.