Nearly half of millennials believe they’ll be able to afford their ideal retirement lifestyle. This compares to just over a third of baby boomers that are similarly optimistic, according to research.
BMO Financial Group unveiled these findings in a new study on Registered Retirement Savings Plans (RRSPs), the Canadian equivalent of employer-sponsored 401(k) accounts in the U.S. The report compares how millennials (ages 18-34) and boomers (ages 50-68) feel about retirement from both financial and psychological perspectives.
According to the study, 47 percent of millennials are optimistic about their ability to afford their ideal retirement lifestyle. This contrasts with 35 percent of boomers.
Further, millennials indicate they’ll need, on average, more than $400,000 in savings to live their ideal retirement lifestyle. This is $60,000 more than boomers feel they need. The study reveals the retirement savings targets, as well as the RRSP savings to date for both age groups:
Millennials say they need an average of $441,610 saved for retirement and currently have an average of $15,194 saved in their RRSPs.
Boomers indicate they’ll need an average of $385,184 saved for retirement and currently have an average of $65,394 saved in their RRSPs.
Chris Buttigieg, a BMO Financial senior manager of wealth planning strategy, observes that boomers are less optimistic than millennials about their retirement preparedness because they’re closer to retirement.
He notes, however, that boomers are “more excited at the prospect of being retired” than millennials. According to the study, one-third (32 percent) express feelings of anticipation and excitement, compared to only 22 percent of millennials.
The study also identifies the biggest concerns of these two groups about retirement. The top worry for both millennials and boomers is not having enough saved to do all the things they want to do in retirement (40 percent and 44 percent respectively).
Other worries identified include:
Declining physical abilities and mobility (38 percent millennials; 43 percent boomers).
Poor health and/or the prospect of dying (38 percent, millennials; 24 percent boomers).
Spending more money than they had planned (27 percent millennials; 22 percent boomers).
Being bored (29 percent millennials; 19 percent boomers).
The survey was conducted by Pollara with an online sample of 1,303 Canadians, including 803 non-retirees aged 18-64 and 500 retirees of any age. The survey was conducted from November 12 to November 17, 2014.