Despite the fact that 59 per cent of generation Xers have saved some of their income for retirement in 2016, just 35 per cent of this age group are confident they’ll save enough, according to a new survey by Ratehub.ca.
On the other hand, 65 per cent of baby boomers are confident, though just 47 per cent said they’ve saved some of their income for retirement this year. And 42 per cent of millennials have saved while a similar percentage (45 per cent) of that age group are confident they’ll save enough for retirement.
Of those who are saving in 2016, 26 per cent are putting away about a quarter of their income for retirement, according to the survey.
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Supporting aging parents and dependant children at the same time could chip away at generation X’s confidence to fund their own retirement, Kerri-Lynn McAllister, chief marketing officer at RateHub, told Benefits Canada in an email. “They could be supporting older parents financially or taking time off of work to help, which can result in fewer hours worked and less pay. At the same time, they could be paying for – or saving for – their children’s post-secondary education, or a monetary gift for a down payment on a home.”
The fact that millennials are more confident may be because they have more support from their parents, McAllister said, noting they were 47 per cent more likely to receive help from their families when putting a down payment on their first home. Millennials may also be more confident because they have fewer expenses, such as children, and more time to save.
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The survey also found millennials and boomers are more likely to put at least a 20 per cent down payment on a property, while generation Xers are more likely to only pay the minimum. “This could suggest generation Xers lack equity compared to those older/younger generations (who have put 20 per cent down) and may have to carry their mortgage into retirement,” said McAllister.
Retirement confidence also varies by location, according to the survey. Across all age groups, 55 per cent of respondents in Alberta believe they’ll save enough, while the proportion drops to 32 per cent in the Atlantic provinces. McAllister points to the boom years of Alberta’s oil industry and the higher unemployment rates on the east coast as factors affecting attitudes towards retirement.