A survey conducted by Tangerine bank has found that almost half of those between the ages of 18 and 34 started saving at a young age, although a fifth of them admit they would skip contributions in order to buy a "must-have" item like a designer handbag.
The recent poll of more than a thousand Millennials found that 62% of them had already started putting money away for retirement. What's more, 46% indicated that they started saving before the age of 25. While 81% of working Canadians between the ages of 35 and 65 are currently saving for their retirement, Tangerine points out that only 18% indicated that they started before the age of 25.
Of the Millennials who are not saving, 62% blame their low salary or general lack of funds, while 23% are not saving for retirement because they have their sights set on a big ticket item such as a house, a wedding, or travel.
How much do Millennials think they will need when they retire? 40% think they will need to have more than $1 million put aside, although only 63% expect that they will have to keep working past the age of 60. Older Canadians are less optimistic about the length of time they will have to remain in the workforce, with 74% expecting to be over the age of 60 when they retire.
Tangerine also asked Millennials about what they would (and would not) be prepared to give up to retire early:
- 59% would only go out once a week to socialize with friends in order to retire before the age of 65
- 47% would give up takeout food and cook all their meals to retire before the age of 65
- 43% would give up all forms of social media to retire before the age of 50
- 28% would work 50+ hours a week for the remainder of their working career to retire in their 50s
- 22% would forego contributions to their retirement savings for a luxury 'must-have’ purchase like a smartphone, concert tickets or designer handbag
"Regardless of when they started saving or when they expect to retire, both millennials and older working Canadians share the same perspective on the best strategy for retirement saving – make it automatic. 42% of millennials and 41% of older working Canadians recommend setting up an Automatic Savings Program," concludes the Tangerine study. "Another 25% of millennials and 28% of older working Canadians said their best method for saving for retirement is participating in their company’s matching program."