Gen X falling short on retirement savings goalsBy The IJ Staff | May 11 2018 11:30AM
Generation X is struggling to save for retirement, says Franklin Templeton Investments Canada’s 2018 Retirement Income Strategies and Expectations survey released May 10.
The survey found that 28 per cent of Canadian Gen-Xers haven’t saved at all for retirement, nor have nearly 37 per cent of American Gen-Xers.
"With the rising cost of living – coupled with school-aged children, their own student loans or aging parents to attend to – Generation X is being stretched beyond their financial limits in many cases, which hasn't left much room for contributions to their retirement savings," said Duane Green, president and CEO, Franklin Templeton Investments Canada. "This reinforces the importance of financial planning advice that takes retirement savings into account and incorporates tools like setting up automatic contributions – with whatever you can afford, when you can afford it – to help ensure you are better prepared for the future."
High expenses and low income
Of those Canadian Gen-Xers who do not maximize or know their annual contribution limits in all of their registered accounts, 47 per cent say their income is too low to save more for retirement, and 29 per cent say their expenses are too high. Twenty-four per cent prioritize paying off debt instead.
Burdened by debt
"With not enough income, high expenses and large consumer and mortgage debt loads, Generation X is struggling to save. This may have been the case for some Babyboomers, but their saving grace was that some were able to sell in a high-flying housing market and many had pensions," said Matthew Williams, senior vice president, Franklin Templeton Investments Canada. "Generation X may not be as lucky given they have hefty mortgages that they can barely afford – especially if interest rates increase – and some do not even have home equity as they are renting."