About half (51%) of Canadians believe they are falling behind on retirement savings, according to a Manulife survey released Tuesday.
With rising life expectancy, retirees need to fund two to three decades of retirement, Aimee DeCamillo, global head of retirement with Manulife Investment Management, said in a release.
According to the survey conducted by Angus Reid, 59% of those who retired early wished they had saved more, compared to 45% of those who retired as expected or later. In addition, 27% of those who ended work early said they retired too early, while only 11% of those who retired on track or later said the same.
Canadians who retired later are also less likely to make lifestyle adjustments to reduce expenses. Of those who retired early, 46% reduced their spending habits and 37% have or plan to downsize their home, compared to those who retired as planned or later at 32% and 27% respectively.
“Unsurprisingly, baby boomers appear to be in a better financial position than their counterparts with less debt, fewer worries and a greater likelihood of having their retirement saving still on track,” the report said.
Nearly half (49%) of baby boomers said they are ahead of or on track for their retirement savings, compared to 41% for Gen X, and 42% for Gen Z and millennials. At the same time, baby boomers are more likely to have a formal retirement plan (72%) than Gen X (70%) and Gen Z and Millennials (65%).
Baby boomers have more financial knowledge than other age groups and have realistic expectations about their target retirement age, the report found. Nearly one-third (64%) have a financial advisor and 74% weren’t worried about insufficient emergency savings.
When it comes to retirement, baby boomers expect to stop working at 67, even though they want to retire at age 65. Their top reasons for extending their careers included increasing retirement savings (65%), debt servicing (42%) and maintaining social connections (38%).
Gen X tends also to be the sandwich generation where they care for dependent children and have obligations toward aging parents. “While they have fewer worries about the economy, they’re actually the least knowledgeable about investments,” the report stated.
Three in five said their debt level was a problem. Gen X dreamed of retiring at age 62 but expected to work until age 66, with half saying they would do so to pay off debt and 37% to support their family.
Gen Z and millennials are in the earlier stages of their career and the most likely (84%) to worry about their finances while at work, the survey found. While only half said they were knowledgeable about investments and they’re least likely (36%) to have a financial advisor, they also have the most time to turn things around.
Although the two younger generations are the most ambitious with their wish to retire at age 60, they’re hampered by the need to increase retirement savings, support family and pay off debt, so they expect to stop working at age 66.
The online survey was conducted between May 9 and June 3 in English and French among 1,572 Canadian employees and 523 retired Canadians, aged 18 and up.