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BMO Financial Group

January 28, 2015 06:00 ET

BMO: Canadian Millennials Are More Optimistic About Retirement Than Boomers

- Almost half of Millennials are optimistic about affording their ideal retirement lifestyle while just one-third of Boomers feel the same way

- Millennials feel they need an average of $442,000 saved to afford their ideal retirement lifestyle while Boomers feel they need $385,000

- Not having enough money saved and declining physical abilities among top retirement concerns for both groups

TORONTO, ONTARIO--(Marketwired - Jan. 28, 2015) - BMO Financial Group today released a new Registered Retirement Savings Plan (RRSP) study which compared how Millennials (aged 18-34) and Boomers (aged 50-68) feel about retirement from both a financial and psychological perspective.

According to the study, 47 per cent of Millennials are optimistic about their ability to afford their ideal retirement lifestyle, compared to just one-third (35 per cent) of Boomers.

Further, Millennials reported that they feel they would need, on average, more than $400,000 saved to live their ideal retirement lifestyle. This is $60,000 more than Boomers feel they need. The study revealed the retirement savings targets, as well as the RRSP savings to date for both age groups:

  • Millennials reported they would need an average of $441,610 saved for retirement and currently have an average of $15,194 saved in their RRSPs.
  • Boomers cited they would need an average of $385,184 saved for retirement and currently have an average of $65,394 saved in their RRSPs.

"Considering how much time Millennials have to save for retirement, their confidence in their ability to reach their target makes sense," said Chris Buttigieg, Senior Manager, Wealth Planning Strategy, BMO Financial Group. "However, they should definitely take heed of any lessons learned from their parents on what works and what doesn't with saving for retirement. They should also make sure that they have a financial plan that will help keep them on track."

Mr. Buttigieg also noted that being much closer to retirement would cause Boomers to be less optimistic about reaching their financial goal. However, they remain more excited at the prospect of being retired than Millennials. According to the study, one-third (32 per cent) expressed feelings of anticipation and excitement, compared to only 22 per cent of Millennials.

Top Concerns for Retirement

The study also identified 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 per cent and 44 per cent respectively).

Other worries identified included:

  • Declining physical abilities and mobility (38 per cent Millennials; 43 per cent Boomers).
  • Poor health and/or the prospect of dying (38 per cent Millennials; 24 per cent Boomers).
  • Spending more money than they had planned (27 per cent Millennials; 22 per cent Boomers).
  • Being bored (29 per cent Millennials; 19 per cent Boomers).

"Millennials and Boomers generally share similar concerns at the prospect of being retired," said Mr. Buttigieg. "While it's not as easy to control deteriorating health and physical capacities, you can take charge of your financial future and be well-prepared for retirement from a fiscal standpoint. One of the best ways to do so is to meet with a financial professional who can help establish a financial plan and save for retirement on a regular basis - this will help provide confidence that you have been pro-active in preparing for a financially secure retirement."

For more information on saving for retirement, please visit www.bmo.com/retirement.

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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. A probability sample of 1,303 would yield results accurate to ± 2.7 per cent, while a probability sample of 803 would yield results accurate to ± 3.5 per cent 19 times out of 20. Results have been weighted using the latest census data to be representative of Canadians as a whole.

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