The dream of retiring at 55 may be a distant hope for many older working Canadians, but today’s younger generation is making it a much more realistic goal.
A recent survey sponsored by Edward Jones and conducted by Decima Research shows that Canadians under 35 are well ahead of past generations in terms of saving for retirement.
The survey revealed that 70% of Canadians between the ages of 25 and 34 have begun a savings plan. In comparison, of those over 50, only 25% said they began saving by that age. Most of them waited until they were over 35 to begin saving.
“It is encouraging to hear that younger Canadians are getting serious about retirement planning,” says Mary Chan, principal, mutual fund marketing and managed account program. “The earlier Canadians start contributing to an RRSP, the longer that money has to grow and take advantage of tax-deferral, particularly today when people are less reliant on pensions and company benefits.”
Even younger Canadians are getting the retirement message, with close to one-third of those between the ages of 18 to 24 already saving for retirement.
The results are similar in the United States and the United Kingdon. Sixty-eight percent of Americans between the ages of 25 and 34 have begun saving for retirement, as have 46% of those in the UK of the same age group. Of Americans aged 45-54, only 32% began saving that early in life, as did only 29% of the same cohort in the UK.
“To see this trend in three different parts of the world in incredible,” says Chan. “Canadians aged between 25 and 34 still have more than 25 years to retire, so they are in much better shape than their parents were at this age as investing early helps build a bigger portfolio.”