More than four in 10 affluent Canadian millennials are optimistic about their financial readiness for retirement while approximately a similar proportion of Canadians of all ages believes that lower oil and gas prices will have a significant effect on their investment strategy, according to some of the results from Toronto-based Manulife Financial Corp.’s investor sentiment index.
The semi-annual survey gathers investors’ views on a range of asset classes and savings and investment vehicles, as well as their confidence in these areas. And the most recent edition, released on Thursday, finds that 43% of Canadian millennials believe they will have more than enough income when they retire even though they put saving for retirement near the bottom of their priorities. They also are less concerned than their parents and other age demographics about running out of money in retirement. Instead, maintaining their current lifestyle is the top concern for 24% of millennial respondents.
“[Millennials] are setting themselves up for failure if they think they’ll be well off in retirement when saving for it isn’t their chief financial concern,” says Sam Sivarajan, vice president and managing director, Manulife Private Wealth, in a statement. “Millennials should be focused on paying down debt, building their savings and getting into good spending habits if they want to be financially secure in retirement.”
Manulife also asked millennials and Canadians of all ages about the effect that low oil and gas prices will have on their investment strategies. Although more than half (54%) of millennials say the current state of oil and gas prices will have a significant impact on their investment planning, that drops to 44% when the opinions all Canadians are taken into account.
However, 73% of Canadians are just generally concerned about where oil and gas prices will end up, with Albertans (80%) and those from Atlantic Canada (79%) being the most worried. Says Sivarajan: “We can expect concerns about oil and gas prices to remain high as oil prices continue to slump below US$50 per barrel.”
In terms of Canadians’ preferred investment vehicles, they’re choosing to pour more money into their homes, with 70% saying it is a good time to invest in their properties.
RRSPs are also another popular investment option for respondents. However, they are decreasing their investments into fixed-income products, exchange-traded funds and mutual funds, with the popularity of each of those products down by 4% vs six months ago.
The index is based on an online survey of 1,002 Canadian adults who were at least 25 years old with a household income of at least $75,000 and investible assets of at least $100,000. Environics Research conducted the survey for Manulife in May.