BMO Annual Retirement Survey: Millennials Believe They Need About $2.1M To Retire Compared to the National Average of About $1.7M

Following a surge in excess savings during the pandemic, Canadians are no longer putting as much money away – with savings levels now returning to pre-pandemic levels 63 per cent say current economic conditions are negatively affecting their ability to save for retirement

TORONTO, Feb. 7, 2024 /CNW/ – BMO’s annual retirement survey reveals Millennials (ages 28 to 44) believe they will need about $2.1M to retire, the highest among all adult generations. The survey also revealed that, for a second consecutive year, Canadians overall believe they need about $1.7 million in retirement.

“There is no one size fits all retirement plan and no universal number when it comes to how much Canadians should be saving for retirement,” said Nicole Ow, Head, Retail Investments, BMO. “We encourage people to start planning early and consider all the factors that will affect their ideal retirement lifestyle including family obligations, health and wellness goals, hobbies and interests, and travel plans. Working with a professional BMO advisor will help Canadians put their goals into perspective and create a personalized plan to help them achieve real financial progress and the type of retirement they aspire to have.”

Despite economic headwinds, 62 per cent of Canadians have either already contributed to their RRSPs in 2023 or plan to do so. The average amount people plan to contribute to their RRSP has increased to $6,512 in 2023 from $5,753 in 2022.

The survey found Registered Retirement Savings Plan (RRSP) account values have fallen from elevated levels measured over the previous two years. The average amount held nationally fell 28 per cent to $113,070 in 2023 compared to $144,613 in 2022. Despite the decline, total account holdings are in line with historical averages, with a notable increase in retirement savings reported during the COVID-19 pandemic.

Higher interest rates and inflationary pressures are also impacting Canadians, with 63 per cent indicating current economic conditions are negatively affecting their ability to save for retirement.

37 per cent of Canadians said they are putting less money towards retirement savings44 per cent of Boomers said they are compensating for their reduced ability to save for retirement by working longer than they had planned38 per cent of Gen Z respondents said they are putting off saving for retirement completely

The Gender Gap:Men estimate on average they need $2.0M to retire, while women believe they need $1.3M in retirement.Two thirds (67 per cent) of male respondents are confident they will have enough money to retire as planned and over half of women (56 per cent) are confident they will be able to reach their retirement goals.

Retirement Ages: Average age people plan to retire is 62 years old.Ideal Retirement Age cited by respondents is 55 years old. For the youngest adult generation, Gen Z, the ideal retirement age is 50 years old while Millennials reported a slightly higher age of 53.

Seeking Professional Guidance:Over three quarters (77 per cent) of Canadians are concerned current economic conditions are adversely affecting their finances and over half (55 per cent) believe financial advice is more important in the current economic environment.Most Canadians working with a financial professional (82 per cent) agree their advisor is helping them reach their goals, with two thirds (67 per cent) saying they are seeing financial growth through the use of an advisor and three-quarters (75 per cent) saying they appreciate a personalized financial plan.

For more information about BMO’s RRSPs, please visit: www.bmo.com/main/personal/investments/rrsp/

This study was conducted by Pollara Strategic Insights via an online survey of 1,510 adult Canadians, between November 3rd – 8th, 2023. The margin of error for a probability sample of this size is ± 2.5%, 19 times out of 20.

BMO Financial Group is the eighth largest bank in North America by assets, with total assets of $1.3 trillion as of October 31, 2023. Serving customers for 200 years and counting, BMO is a diverse team of highly engaged employees providing a broad range of personal and commercial banking, wealth management, global markets and investment banking products and services to 13 million customers across Canada, the United States, and in select markets globally. Driven by a single purpose, to Boldly Grow the Good in business and life, BMO is committed to driving positive change in the world, and making progress for a thriving economy, sustainable future, and inclusive society.

SOURCE BMO Financial Group