Tuesday, January 19th, 2016
When you ask 1,000 millennials (those Canadians age 18-34) if they've started saving for retirement, you might expect that they'd be too worried about school, saving for a home or paying off debt to think about their "golden years" – but a recent survey conducted for Tangerine* found this is not the case. According to the survey, 62 per cent of millennials have started saving for retirement and almost half say they started before the age of 24!
So how do they do it? When asked what their savings strategy is, out of those millennials saving for retirement, 42 per cent said they make it automatic by setting up an ASP (Automatic Savings Program), and 27 per cent said they participate in their company's matching program.
“It's encouraging to see that the majority of younger Canadians have started saving towards retirement," said Silvio Stroescu, Managing Director of Deposits and Investments at Tangerine. “Setting up an ASP, like many have done, is a great way to remain diligent with your savings goals, while at the same time still enjoying the spending money you have left over."
Wondering where they picked up these good habits in the first place? Sixty-three per cent said they taught themselves about saving for retirement, and 43 per cent also named their parents as a source of retirement learnings.
In terms of motivation, millennials seem to be driven by the desire for a good life. Over 40 per cent believe that they will need more than $1 million saved for retirement – and over half (53 per cent) said one of their prime motivators for saving is being able to live the retirement lifestyle they envision – including things like owning a vacation property and travelling.
So besides working hard and stashing away cash for the good life later on, what else are millennials prepared to do for retirement? Tangerine's survey also asked about some interesting sacrifices – here are the results:
And with over a third of this group (37 per cent) expecting to retire before the age of 60 – hopefully these Canadian millennials will continue to put their money where their mouth is!
* From December 29, 2015 to January 4, 2016, an online survey was conducted among 2,017 randomly selected Canadian adults who are Angus Reid Forum panelists. 1,010 are aged 18 to 34, and are either employed or full-time students. 1,007 are aged 35-65 and employed. The margin of error for each sample group – which measures sampling variability – is +/- 3.1 per cent, 19 times out of 20. Discrepancies in or between totals are due to rounding.
Interested in setting up an RSP with Tangerine? Learn more here.