A new survey from the Canada Pension Plan Investment Board (CPP) reveals that nearly two-thirds of Canadians worry about running out of money during retirement. The online survey, which included 4,000 Canadians from outside Quebec, found that 61% of respondents fear they will exhaust their retirement savings. This anxiety is particularly high among younger adults, with 67% of those aged 28 to 44 expressing concerns about their financial longevity in retirement.
The survey also found that 66% of women worry their retirement funds will not be sufficient, compared to 56% of men. Canadians are adjusting their retirement savings goals in response to these worries. On average, they now anticipate needing $55,000 per year to live comfortably in retirement, up from $50,000 in 2023.
Overall, Canadians believe they will need $900,000 in total savings for retirement, an increase of $200,000 from the previous year. Frank Switzer, managing director of public affairs at CPP Investments, noted that many Canadians’ financial anxiety is fueled by cost-of-living inflation and a lack of comprehensive retirement planning. “Working Canadians, young or old, have already started their journey towards retirement planning through their CPP contributions.
Knowing that you already have a head start through CPP can help make retirement feel more achievable,” he said.
Canadians worry about retirement savings
The survey also highlighted that nearly three-quarters (73%) of Canadians either plan to or already rely on CPP for a portion of their retirement income.
The survey was conducted by Innovative Research Group from August 1 to August 7, and the sample was weighted to accurately reflect the Canadian population according to census data. Dylan Wilson, portfolio manager at Verecan Capital Management Inc., pointed out several factors contributing to this anxiety, including the decline in defined benefit pension plans over the past 35 years and the challenges faced by younger Canadians in achieving homeownership. The CPP Investments study also revealed that financial stress and anxiety about money tend to decline with age.
Day-to-day financial stress was reported by 42% of the 18-24 age group but only 12% of the 65-plus age group. As younger Canadians age and progress in their careers, they are more likely to achieve financial milestones like home ownership, enabling them to shift focus to retirement savings. Wilson highlighted that one of the significant expenses in retirement is end-of-life care, and prospective retirees should account for these costs.
Switzer emphasized the importance of understanding the CPP and having a financial plan, which can allay fears of outliving savings. “For young people, knowing you have a head start through the CPP can help make saving for retirement feel more achievable,” Switzer said. “Once you’ve got a plan, you’ve got the confidence.”
