Financial Insights That Matter
A majority of Canadians are worried they will not have enough money to retire because of inflation, a new survey from BMO has found, with respondents on average expecting they will need $1.54 million to retire.
According to BMO’s annual retirement survey of 1,500 Canadians, 76 per cent of respondents are worried they won’t have enough money in retirement due to rising prices. Another 63 per cent of Canadians say rising prices over the last year have hampered their ability to save for retirement.
For those who said inflation has limited their ability to save for retirement, BMO says they have adjusted by cutting other spending, putting less into retirement savings, plan to work longer or have put off retirement savings completely.
“Inflation is a major concern for Canadians, and the spike in prices as the economy emerged from the pandemic is a stark reminder rising prices can affect spending, investment and savings plans,” Robert Kavcic, senior economist at BMO, said in a news release.
“Inflation should always be a major consideration when saving and investing for retirement and if investors have concerns about how rising prices may impact their retirement savings, it might help to seek guidance from a financial professional.”
Still, while inflation has raised concerns for many when it comes to saving for retirement, the amount Canadians expect they will need has gone down compared to previous years. Last year, BMO’s survey found that Canadians on average believe they would need $1.7 million at retirement.
Although price concerns are weighing on them, Canadians are managing to save more for their retirement. BMO says average contributions to Registered Retirement Savings Plans have gone up, rising 14 per cent from last year to $7,447. That’s also above the average contribution record of $6,822 set in 2021, when the COVID-19 pandemic saw savings rates go up.
The survey of 1,500 Canadian adults was conducted online by Pollara between Nov. 8 and Nov. 18. While a margin of error could not be calculated on a non-probability sample, for comparison purposes, a sample of 1,500 respondents would have an estimated margin of error of +/- 2.5 per cent, 19 times out of 20.
Alicja Siekierska is a senior reporter at yahoo finance canada. Follow Her On X @alicjawithaj.
Download the Yahoo Finance app, available for Apple and Android.
#1a73e8;">Boost Your Financial Knowledge and Achieve Stability
Discover a growing online community dedicated to delivering financial news, tips, and strategies designed to help you manage money effectively, save smarter, and grow your investments with confidence.
#1a73e8;">Top Financial Tips for Saving and Investing
- Personal Finance Management: Master the art of budgeting, expense tracking, and building a strong financial foundation.
- Investment Opportunities: Stay updated on market trends, learn about stocks, and explore secure ways to grow your wealth.
- Expert Money-Saving Advice: Access proven techniques to reduce expenses and maximize your financial potential.