The retirement savings goal for Canadians is becoming an increasingly daunting task, with a new survey by BMO revealing that the average desired savings amount has risen to a staggering $1.7 million. This is a significant increase from the $1.54 million reported in 2024, and it's leaving many Canadians feeling uncertain about their financial future.
The survey, which polled 1,500 adults, found that Canadians' retirement savings goals have grown by 26% since 2019, when BMO first started asking about their financial plans for retirement. But here's where it gets concerning: the survey also revealed that Canadians' confidence in achieving these goals is waning. A concerning 36% of respondents admitted they don't expect to reach their target, up from 29% in 2024.
The struggle to save for retirement is further highlighted by the fact that many Canadians are falling short of the recommended savings benchmark. BMO noted that nearly three in 10 respondents saved less than 5% of their income, while only 21% managed to save more than 10%.
But retirement isn't the only financial worry on Canadians' minds. The survey also found that some Canadians plan to continue working, with 14% indicating they don't intend to retire. This sentiment was particularly prevalent among boomers, with 27% planning to stay in the workforce compared to 20% of Gen Xers, 18% of millennials, and 15% of Gen Zers.
These findings are echoed by a separate study from T. Rowe Price Group Inc., which surveyed over 7,000 people in five countries, including Canada. This study revealed that nearly half of Canadians saving for retirement are contributing as much as they can to their workplace pension plans, yet only 41% believe they will have enough to retire comfortably.
The study also found that some Canadians plan to continue working, with 30% of those aged 50 and older expecting to work part-time, compared to 18% of those aged 35-49 and 12% of those aged 18-34. T. Rowe Price suggests that this may not necessarily be a negative choice, as some individuals opt to continue working for reasons beyond financial necessity, such as maintaining a sense of purpose and social engagement.
As Canadians grapple with these financial challenges, it's essential to stay informed and seek expert advice. The Financial Post is offering readers a chance to ask tax-related questions to CIBC's Jamie Golombek, providing an opportunity to address some of these concerns. Additionally, the newsletter provides valuable insights into the Canadian housing market, which has experienced the largest decline in housing prices among similar advanced economies, according to the Bank for International Settlements.
The newsletter also features a range of financial topics, including retirement planning, energy sector insights, and mortgage strategies. With expert contributors like Robert McLister, readers can navigate complex financial sectors and make informed decisions. Whether you're a seasoned investor or just starting your financial journey, staying informed is crucial in today's ever-changing economic landscape.
