Young Canadians, while aware of the need for retirement planning, are putting their retirement at risk by not considering how much money they will need and often delaying saving for retirement, according to BMO Retirement Institute report.
Only one in 10 young adults have thought a lot about how much money they will need to save for retirement while 27 per cent admitted they have not started saving for retirement, said Broadening the Approach to Preparing for Retirement.
However, 82 per cent of young adults surveyed believe retirement planning is important, with 52 per cent owning a registered retirement savings plan (RRSP) and 36 per cent having a tax-free savings account (TFSA).
"While it's great news that young adults appreciate the importance of retirement planning, it's a concern that many are not backing it up with concrete action," said Tina Di Vito, head of the BMO Retirement Institute. "A clear dichotomy exists between what young people think about retirement and what they are actually doing to prepare for it."
Young adults are the least prepared for retirement, yet as many as 41 per cent expect to retire before age 60, compared to eight per cent of baby boomers, found BMO. More than one-half (57 per cent) of young people expect to retire between 60 and 69 compared to 78 per cent of boomers, and just two per cent of young adults plan to retire after 70 compared to 14 per cent of baby boomers.
While only a few individuals attend retirement planning seminars, these events seem to have the greatest impact on motivating young adults to take action, according to the BMO study. Only 19 per cent of those under 35 (versus 43 per cent of those 55 and older) attended a retirement planning seminar, as many as 63 per cent of young adults under 35 took action (while 67 per cent of those over 45 took action).
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