Nearly two-thirds of Canadians say they are worried about running out of money during retirement, a new survey from the Canada Pension Plan Investment Board has found, with many expecting they will need to save more as they grapple with a higher cost of living.
According to the online survey of 4,000 Canadians residing outside Quebec, 61 per cent of Canadians say they are afraid of running out of money during retirement. The concern of outliving your retirement plan is even higher among younger Canadians, with 67 per cent of those between the ages of 28 and 44 worried they will run out of money after their working years. The survey also found that 66 per cent of women say they are worried their retirement savings will not last, compared to 56 per cent of men.
Given these concerns, Canadians have increased expectations for how much money they will need in order to live comfortably in retirement. Canadians expect on average that they will need $55,000 per year to live comfortably, up from $50,000 in 2023. They also expect that on average they will need $900,000 in total for retirement, $200,000 more than what respondents said last year.
“This increase is mostly concentrated among those who reported experiencing day-to-day financial stress and is about twice as large among people without a financial plan,” CPP said in its survey report.
The survey found that about six in 10 Canadians (59 per cent) feel stressed about money on a day-to-day basis. More people this year reported it seems more difficult to get by (60 per cent) than last year (55 per cent).
The survey results echo an ongoing trend that has seen Canadian expectations for the amount of money they will need to retire on the rise. BMO’s annual retirement survey released at the start of the year found that Canadians believe they will need $1.7 million in total to retire. That figure jumped for millennials – those between the ages of 28 and 44 – with respondents expecting to save $2.1 million in order to retire.
Frank Switzer, managing director of public affairs at CPP Investments, said in an interview with Yahoo Finance Canada that many Canadians are feeling anxious about their finances in part due to cost-of-living inflation, as well as a lack of planning and understanding when it comes to retirement.
“Understanding the CPP and having a financial plan can give you more confidence, and once you have that and you’re going to take those steps, that’s going to lessen your anxiety about your finances,” Switzer said.
“I think one of the key lessons is 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.”