December 26, 2022

Lack of access to workplace pensions, debt and inflation hamper millennial savings efforts

New research from Edward Jones Canada has found that debt, inflation and the lack of workplace retirement savings programs are among the reasons millennials aren’t saving as much as they’d like for retirement.

An article in Wealth Professional took a closer look at the findings from the research.

A key learning was that 70 per cent of millennials (people aged 26 to 41) said “they are not able to save enough for their retirement,” the article notes.

Julie Petrara of Edward Jones Canada tells Wealth Professional that “we dug a little deeper and found that 27 per cent were unable to afford to save for retirement. Twenty-four per cent said they’re not saving as much as they want to; 15 per cent don’t know how much to save; and four per cent can afford to start saving, but haven’t.”

Reasons identified for not being able to save were “debt, their job and employment situation, and lifestyle,” as well as a lack of access to pensions, the article continues.

“Group plans aren’t often an option for young go-getters who earn income from the gig economy, while millennial workers with full-time corporate jobs are less likely than workers of decades past to be offered pension plans by their employers,” the article notes.

So for those without savings programs through work, retirement saving becomes “a self responsibility,” Petrara tells Wealth Professional. And on top of that, the cost of living was seen by 49 per cent of millennials surveyed as the “biggest obstacle” for retirement savings.

For millennials, the survey found, retirement savings is seen as something that can be put on the back burner versus “more immediate financial goals, such as paying down debt, homeownership, or starting a family.”

This is understandable, states Petrara in the article. “Millennials are further from retirement than more senior generations,” she tells Wealth Professional. “If we assume everyone is focusing on shorter-term financial goals, then Baby Boomers are prioritizing retirement, while millennials are dealing with their now and next, which includes addressing the costs they’re faced with today, and those they’ll be faced with in the near future.”

Petrara suggests that millennials consider working with a financial advisor to set priorities for saving.

There’s a lot of good information here and it rings very true. Of the millennials we know, some have good pensions through full-time work. But most are part-time workers, so retirement programs are either not available or optional. If you are able to take part in any type of retirement savings plan through work, be sure to sign up and start contributing — the money will go straight into savings right from your paycheque and you’ll be paying your future self first.

If there isn’t a retirement program at your workplace, ask your employer about signing up to offer the Saskatchewan Pension Plan, which is open to any Canadian with registered retirement savings plan room. SPP will handle the lion’s share of administrative work for the employer, and you and other employees will benefit from having a plan for your future. Tell your employer about SPP for employers today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.

, , ,

Leave a Reply

Your email address will not be published. Required fields are marked *