It’s no secret that we’re all living longer than previous generations. With advancements in healthcare technology, consumer awareness when it comes to the food we eat and more people quitting smoking, a growing number of seniors are living well into their 70s and 80s.
This is fantastic news, but the problem appears to be a lack of money for those who live beyond the average life expectancy and the funds they saved up during their working years. As the years go by, financial experts recommend that seniors have at least 25 years worth of savings when they hit the age 65.
If millennials are having a difficult time with their own personal finance needs today then just imagine how bad they could be off by the time they reach their autumn and winter years. It’s no surprise then that people in their 20s and 30s have already foregone the concept of retirement.
According to a new study by Scotibank, nearly half (44 percent) of Canadian baby boomers – individuals born between the years 1946 and 1964 – are concerned about outliving their retirement savings. This has been a common key finding of surveys amongst older adults for quite some time.
Although baby boomers cite living comfortably, traveling, meeting their healthcare needs and keeping healthy as their top priorities in their retirement, they may not have the required funds to regularly meet those objectives the older they get.
However, the survey participants are optimistic that their retirement will be better than their parents’: 62 percent plan to be more active, 54 percent say they’ll be better off financially, 41 percent believe they’ll be healthier and 44 percent think they’ll be retired longer.
“Canadians will be living longer and healthier lives than in previous generations, and with that comes the necessity to have the funds to live out their retirement years as they have planned,” said Andrew Pyle, Senior Wealth Advisor at ScotiaMcLeod, in a statement “Your retirement balance sheet is no different than when you were working – tracking what goes in versus what goes out. Whether through financial planners or online tools, we are encouraged that so many Canadians have a financial plan to keep them on track.”
Last year, the C.D. Howe Institute published a report that found Canada’s life expectancy has been rising since the 1950s and it recommended that legislators should change laws regarding pension rules, taxes, spending and budgets to react to ages.
“There tends to be a false sense of security when it comes to planning for retirement,” stated Noel Archard, head of BlackRock Canada, in an interview with Yahoo! Finance. “We hope that the money will somehow be there when we need it but we’re not taking the action required to ensure it is. This is a serious problem, and addressing it must become an urgent priority.”
Of course, outliving one’s retirement seems to be a concern that some individuals wish they had. One poll found that a majority of Americans aren’t even financially organized, equipped or prepared for retirement, while one-third aren’t saving for retirement at all.
Financial experts recommend that in order to live comfortably in retirement longer then people have to adapt now. This means by saving more and earlier, investing regularly, living within one’s means, getting a second job and reducing debt burdens now.
The online Scotiabank survey was conducted with 1,201 Canadians between the ages of 45 and 70 with minimum assets of $50,000. The poll was conducted from Jan. 8 to 23 and does not contain a margin of error.
