Boomers face tough choices for retirement

No money left over to save (58%) No money left over to save (58%) Started saving too late (44%) Still supporting kids (28%) Health issues (22%) Job issues (20%) Many of them now regret their late start: 81% said they wish they had started earlier, and 91% agreed that saving enough to retire on takes […]

By Steven Lamb | November 27, 2006 | Last updated on November 27, 2006

2 min read

No money left over to save (58%)

Started saving too late (44%)

Still supporting kids (28%)

Health issues (22%)

Job issues (20%)

Many of them now regret their late start: 81% said they wish they had started earlier, and 91% agreed that saving enough to retire on takes a lot of planning and advice.

“It is important for them to sit down with a financial planner now to assess their current situation and develop a realistic plan based on this,” said Vikmanis. “It’s never too late to start saving, particularly when the average Canadian should plan to fund at least 20 years of retirement.”

Filed by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com

(11/27/06)

Steven Lamb

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No money left over to save (58%)
Started saving too late (44%)
Still supporting kids (28%)
Health issues (22%)
Job issues (20%)

Many of them now regret their late start: 81% said they wish they had started earlier, and 91% agreed that saving enough to retire on takes a lot of planning and advice.

“It is important for them to sit down with a financial planner now to assess their current situation and develop a realistic plan based on this,” said Vikmanis. “It’s never too late to start saving, particularly when the average Canadian should plan to fund at least 20 years of retirement.”

Filed by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com

(11/27/06)

Poor financial planning could force baby boomers to give up on some of their retirement dreams, according to a survey by BMO Financial Group. A whopping 70% said they did not feel they were on track with their retirement savings but that they were willing to make sacrifices to get by.

“Although it’s concerning that such a large number of boomers aren’t adequately prepared to fund their retirement, it’s encouraging that most recognize that they’ll likely have to make some adjustments to ensure they have enough money,” said Kris Vikmanis, head of retirement market, BMO Financial Group.

Those adjustments range from minor tinkering to radical alterations in their current lifestyles. Of the 70% who expressed uncertainty, 83% said they were willing to put off retirement and work later in life than they had originally planned. With the country facing a potential labour crunch as this large generation retires, that may not be such a bad thing.

More radical changes include refinancing their homes or downsizing to a less expensive residence, with 39% saying they might pack up and move to a cheaper market altogether. Residents of British Columbia and Alberta were the most likely to downsize their abode, with 56% willing to make that adjustment. Not surprisingly, provinces with lower real estate values showed less inclination toward downsizing — 30% in Atlantic Canada said they would, while 34% would in Saskatchewan and Manitoba.

Residents of Quebec were the most likely to forgo owning a second property (69%), while Ontario, Saskatchewan and Manitoba residents were the least likely (52%). Quebeckers were also the most willing to give up retirement travel (62%), while residents of B.C., Saskatchewan and Manitoba were the least likely (42%).

Most respondents were unwilling to give up their cars, however, with Albertans being the most reluctant (11%). British Columbians remained true to their green stereotype, with the highest percentage willing to give up their cars (34%).

The reason for these sacrifices is bound to be familiar to most advisors: many boomers simply started saving for their retirement too late.

“This inclination to postpone retirement planning is consistent with previous research we’ve undertaken,” said Vikmanis. “Most boomers see retirement as a transition from full-time work to full-time retirement, rather than a point-in-time event, so they may not feel the pressure to plan for something that seems to be far off in the future.”

The most common excuses for the late start?

No money left over to save (58%)
Started saving too late (44%)
Still supporting kids (28%)
Health issues (22%)
Job issues (20%)

Many of them now regret their late start: 81% said they wish they had started earlier, and 91% agreed that saving enough to retire on takes a lot of planning and advice.

“It is important for them to sit down with a financial planner now to assess their current situation and develop a realistic plan based on this,” said Vikmanis. “It’s never too late to start saving, particularly when the average Canadian should plan to fund at least 20 years of retirement.”

Filed by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com

(11/27/06)

Poor financial planning could force baby boomers to give up on some of their retirement dreams, according to a survey by BMO Financial Group. A whopping 70% said they did not feel they were on track with their retirement savings but that they were willing to make sacrifices to get by.

“Although it’s concerning that such a large number of boomers aren’t adequately prepared to fund their retirement, it’s encouraging that most recognize that they’ll likely have to make some adjustments to ensure they have enough money,” said Kris Vikmanis, head of retirement market, BMO Financial Group.

Those adjustments range from minor tinkering to radical alterations in their current lifestyles. Of the 70% who expressed uncertainty, 83% said they were willing to put off retirement and work later in life than they had originally planned. With the country facing a potential labour crunch as this large generation retires, that may not be such a bad thing.

More radical changes include refinancing their homes or downsizing to a less expensive residence, with 39% saying they might pack up and move to a cheaper market altogether. Residents of British Columbia and Alberta were the most likely to downsize their abode, with 56% willing to make that adjustment. Not surprisingly, provinces with lower real estate values showed less inclination toward downsizing — 30% in Atlantic Canada said they would, while 34% would in Saskatchewan and Manitoba.

Residents of Quebec were the most likely to forgo owning a second property (69%), while Ontario, Saskatchewan and Manitoba residents were the least likely (52%). Quebeckers were also the most willing to give up retirement travel (62%), while residents of B.C., Saskatchewan and Manitoba were the least likely (42%).

Most respondents were unwilling to give up their cars, however, with Albertans being the most reluctant (11%). British Columbians remained true to their green stereotype, with the highest percentage willing to give up their cars (34%).

The reason for these sacrifices is bound to be familiar to most advisors: many boomers simply started saving for their retirement too late.

“This inclination to postpone retirement planning is consistent with previous research we’ve undertaken,” said Vikmanis. “Most boomers see retirement as a transition from full-time work to full-time retirement, rather than a point-in-time event, so they may not feel the pressure to plan for something that seems to be far off in the future.”

The most common excuses for the late start?

No money left over to save (58%)
Started saving too late (44%)
Still supporting kids (28%)
Health issues (22%)
Job issues (20%)

Many of them now regret their late start: 81% said they wish they had started earlier, and 91% agreed that saving enough to retire on takes a lot of planning and advice.

“It is important for them to sit down with a financial planner now to assess their current situation and develop a realistic plan based on this,” said Vikmanis. “It’s never too late to start saving, particularly when the average Canadian should plan to fund at least 20 years of retirement.”

Filed by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com

(11/27/06)

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