Millennials in Canada believe they need over $2 million to retire: survey

Canadian Millennials think they need $2 million to retire, according to a new survey by BMO.

The survey provides a glimpse into Canadians’ retirement plans amid growing inflation rates, interest hikes and economic uncertainty. 

Overall, Canadians believe they need $1.7 million to retire comfortably, however, a data breakdown paints a slightly different picture for Millenials. 

Millennials say they will have to save an average of $2.1 million to retire comfortably. However, the survey points out that average RRSP savings fell 28 per cent year-over-year from $144,613 in 2022 to $113,070 in 2023.

Those over 71 years old estimated the least amount of savings to retire at $1.2 million. 

Moreover, 63 per cent of Canadians say current economic conditions are negatively impacting their ability to save for retirement.

However, this year 62 per cent of people who have an RRSP plan to contribute more, an increase from 2022, when it was 57 per cent, the study says. 

The number of people who plan to contribute has also increased to $6,512 in 2023 and from $5,753 in 2022.

Despite the decline in overall savings, total account holdings are in line with historical averages, with a notable increase in retirement savings reported during the COVID-19 pandemic, the data found. 

Saving goals and outlooks also differ significantly between generations. For example, 44 per cent of Boomers said they are compensating for their reduced ability to save for retirement by working longer than they had planned, while 38 per cent of Gen Z respondents said they are putting off saving for retirement completely and 37 per cent of Canadians said they are putting less money towards retirement savings.

Prospective retirement ages vary too. The 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. On average, people plan to retire at 62 years old, according to the survey. 

This study was conducted by Pollara Strategic Insights via an online survey of 1,510 adult Canadians, between Nov. 3 – 8 2023. 

The margin of error for a probability sample of this size is plus or minus 2.5 per cent, 19 times out of 20.

-NOWToronto