October 2, 2023

Younger Canadians show us they know how to save: HOOPP survey

We’re often led to believe that younger Canucks are more focused on the “now” than they are on their distant, decades-from-now retirement.

But new research from the Healthcare of Ontario Pension Plan (HOOPP) shows that young folks are dialed in on retirement saving, reports Wealth Professional.

Half of those aged 18-34 “have set aside money for retirement in the past year,” the publication reports, adding that 45 per cent of those in that age bracket have yet to start filling their retirement piggy banks.

Why, we may ask, is this the case?

“Perhaps this is because young Canadians are already concerned that their idea of when they will stop working is already being impacted by current inflation pressures,” Wealth Professional tells us. “While 60 per cent of all respondents believe they may have to delay retirement, among the youngest adult group the figure jumps to 74 per cent. That puts them second behind 35-54s (80 per cent) but well ahead of the pre-retiree 55-64-years group (54 per cent).

So our younger friends are also reeling from the impacts of inflation?

Wealth Professional explains it this way.

“The retirement fears of young adults may be driven by a wider concern about the state of their finances,” the publication reports.

“The survey found that half of the 18-34 group say they are living beyond their means (compared to just 31 per cent of over 35s) and are almost twice as likely to be splurging on small luxuries because they can’t afford big ticket items (54 per cent versus 28 per cent of over 35s said this),” the article continues.

The younger set are most worried, Wealth Professional notes, by “the cost of daily life (69 per cent),” following by inflation (67 per cent) and housing affordability (65 per cent).

Then, we have their level of debt (48 per cent), reducing that debt (83 per cent), whether they will ever have a workplace pension (45 per cent), interest rates impacting their savings ability (91 per cent), and saving for retirement (86 per cent), Wealth Professional continues.

Finally, 43 per cent are worried about the cost of owning their own home in the future, the article concludes.

The takeaway here is that despite all these barriers, more than half of young people are making the effort to save for retirement. That’s good news.

This writer first started saving for retirement at age 25, when a friend pointed out that contributions to a registered retirement savings plan (RRSP) were tax-deductible. “You’ll get a refund,” our friend said. So, awesome, we started contributing to an RRSP nearly 40 years ago and continue to do so to this day.

Our late Uncle Joe always told us to pay ourselves first — put something away for yourself on payday, then pay the bills. Tucking dollars into a retirement account is a great way to achieve this goal.

And if you’re worried about ever having a retirement program at work, don’t. Any Canadian with RRSP room can join the Saskatchewan Pension Plan . You can leave the intricate art of investing to SPP — your focus can be on directing dollars to your retirement nest egg. When the time comes to give back the lanyard and pass, SPP will have invested your savings for you, and you’ll be presented with options for turning those savings into retirement income.

Be sure to check out SPP 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.

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