Despite the high cost of living, a recent survey reveals that Gen Z and millennial Canadians are still eager to start saving for retirement.
In the face of the Bank of Canada’s decision to maintain a key interest rate of 5.0 per cent on September 6, financial pressures persist even after previous interest rate hikes.
According to a survey commissioned by Abacus Data for the Healthcare of Ontario Pension Plan, Canadians under 35 recognize the importance of having a workplace pension to prepare for retirement. In fact, 51 per cent said they would choose a job with a better pension over a higher salary.
Abacus Data’s chair and CEO, David Coletto, emphasized the need for early retirement planning, particularly for those without a workplace pension, stating, “They’re going to have to figure this out on their own. And that means starting as soon as they possibly can.”
Coletto also expressed surprise that this survey continues to yield similar results despite the challenges of high housing prices, inflation, and previous interest rate hikes.
The survey also revealed that 51 per cent of respondents under 35 say they are living beyond their means, with 69 per cent concerned about daily living costs, 67 per cent concerned about inflation, and 65 per cent worried about housing affordability.
Global News
However, saving requires having money left over to set aside. Many face these challenges, including Owen Devine, a millennial father from Halton, Ontario, who participates in a workplace Registered Retirement Savings Plan (RRSP) matching program.
Devine admitted that he is not saving as much as he should but mentioned that with the employer matching and projected living expenses, he feels confident about meeting his retirement goals.
During the COVID-19 pandemic, Devine and his family experienced financial burdens as the cost of essentials sharply increased. To stay on budget, they had to be more conscious of their spending.
Devine finds comfort in having an RRSP matching program that ensures his savings are designated for retirement and cannot be spent otherwise.
However, not everyone has access to a workplace pension or RRSP matching program, especially business owners. Ashley Rowe, a Gen Z business owner from London, Ontario, who runs New Leaf Collective, worries that retirement may come later than the traditional age of 65.
Rowe encourages young Canadians to utilize budgeting tools for their day-to-day finances and educate themselves on wealth management from an early stage.
She remains optimistic, believing that with the right resources and knowledge, she will be able to achieve her retirement goals.
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