Retirement crisis brewing as baby boomers near end of working lives with little, if any, savings
Canada may be inching closer toward a retirement crisis as a higher cost of living keeps people from saving, while many baby boomers on the cusp of leaving their working lives have little put away.
More Canadians were unable to put money aside for retirement in the last 12 months amid elevated levels of inflation and rising interest rates, according to the 2023 retirement survey from Healthcare of Ontario Pension Plan and Abacus Data. In all, 44 per cent of people neglected to save, an increase of six per cent from the year before. Trying to cope with the high cost of living is the top concern of 70 per cent, followed closely by worries paycheques won’t be enough to keep pace with inflation.
But what may be more worrisome is that a large swath of baby boomers, aged 55 to 64 and not yet retired, don’t appear to have nearly enough savings put aside. Indeed, one in five haven’t tucked anything away, while close to half only have $5,000 or less in retirement savings. Another 75 per cent have $100,000 or less put aside, a concerning figure considering Canadians expect to need $1.7 million to retire comfortably, according to a report out this year from the Bank of Montreal. The result is people expect they will have to retire later than they hoped, with 54 per cent saying higher inflation will force them to kick their desired retirement date further and further down the road.
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