Majority believe retirement will be harder for the generation after them
Canadians expect a harder path to retirement and know helping their adult children will likely make it worse – but many intend to do it anyway, even at the expense of their own long-term security.
The latest BMO Retirement Survey shows broad pessimism about retirement conditions compared with previous generations.
Roughly two thirds (67 percent) say it will be more difficult for them to save and invest for retirement than it was for their parents.
Millennials (73 percent) are the most likely to believe retirement planning will be more difficult than it was for their parents, followed by Gen X (67 percent), Gen Z (61 percent) and Boomers (60 percent).
Concern intensifies when Canadians look beyond their own lifetimes.
A large majority (77 percent) believe retirement will be harder for the generation after them.
Boomers (82 percent) feel the most concerned about the retirement prospects of future generations, followed by Millennials (78 percent), Gen X (75 percent) and Gen Z (67 percent).
“With uncertainty around the cost of living and what retirement will look like in the future, it’s natural for Canadians to feel anxious about whether they’re saving enough,” said Paul Lalonde, head of Wealth Planning at BMO Private Wealth Canada.
He said a trusted advisor can “create a clear financial plan” and help people feel confident they are taking the right steps, no matter where they start.
Despite these pressures, many Canadians still prioritize financial support for their adult children.
Among the half (49 percent) of respondents that plan to help their adult children financially, 83 percent indicate they understand this support will negatively affect their own retirement plans.
The intention to help the next generation appears strongest among younger cohorts: 68 percent of Gen Z say they are planning to provide financial support to their children, followed by Millennials (58 percent), Gen X (42 percent), and Boomers (38 percent).
“We are seeing more families thinking beyond their own retirement and planning how to pass wealth to the next generation,” said Lydia Potocnik, vice-president and regional director, Estate and Trust Services, BMO Private Wealth.
She said intergenerational wealth transfers are now “a critical part of financial planning,” and that a well-structured holistic strategy often includes estate planning so parents can support their children without putting their own retirement at risk.
Even in this more challenging environment, Canadians who work with advisors report strong satisfaction with the guidance they receive.
Nearly nine-in-ten (89 percent) investors say their advisor helps them meet their financial goals, with 44 percent strongly agreeing.
