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Generations differ on retirement views

Friday February 13, 2015 Written by  RBC Financial Planning
Although many young Canadians believe they owe it to their Boomer parents to keep them comfortable in retirement, moms and dads aren't interested in collecting on the "IOU."

According to the 2015 RBC Financial Independence in Retirement Poll, part of the reason for the older generation’s view may be due to their belief that, by comparison, their children’s generation faces more financial pressures (61 per cent) and is less prepared for retirement (59 per cent). This, despite the fact that one-third of boomers (37 per cent) who have determined how much they need to retire comfortably estimate they are presently somewhat short of – or even nowhere close to – where they thought they would be in terms of their retirement savings.

“We’re seeing a strong desire among Boomers for financial independence in retirement coupled with uncertainty around how they will accomplish this goal,” said Richa Hingorani, senior manager with financial planning support at RBC Financial Planning.

The survey also found contrasting opinions between younger and older Canadians around the importance of RRSPs. For those aged 18 to 34, RRSP ownership dropped to 36 per cent – its lowest level in more than a decade and well below the 67 per cent reported for the 50 to 69 age group.

Other generational differences around retirement savings identified in this year’s poll include:

  • Younger Canadians are more likely to say that having enough savings is one of their top concerns in retirement, compared to Boomers (48 per cent versus 38 per cent).
  • Younger Canadians are more worried about balancing immediate savings with long term/retirement savings than Boomers (80 per cent versus 70 per cent).
  • Younger Canadians with unused RRSP contribution room are more worried about the impact this may have on their retirement than Boomers with unused RRSP contribution room (39 per cent versus 22 per cent).
  • More Boomers are making one-time contributions to their RRSPs, compared to younger Canadians (38 per cent versus 18 per cent); younger Canadians are using regular contribution plans more than Boomers (42 per cent versus 23 per cent).

The poll was conducted by Ipsos Reid between Nov. 3 and 17, 2014, on behalf of RBC Financial Planning. For this survey, a sample of 3,205 Canadians over the age of 18 were interviewed online. The margin of error is +/- two per cent.

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