If Retirement Feels Out of Reach, You’re Not Alone

A recent report from Deloitte Canada reveals that only 14 percent of near retirees can expect a comfortable retirement. The study focused on Canadians aged 55 to 64 and found that those who won’t rely on the Canada Pension Plan after 65 have over $900,000 in financial assets and own their home outright.

However, the situation is even more dire for young people, according to Paul Kershaw, founder of the think tank Generation Squeeze. Kershaw expressed concerns about the financial pressures faced by younger generations, stating that hard work doesn’t pay off like it used to. Factors such as increased post-secondary education costs, lower wages, and high housing prices make it harder for young individuals to save for retirement.

With the average retirement age of 65 and life expectancy of 81, Kershaw warns that the challenges faced by younger generations will create more fiscal challenges for retirement programs. There are now only three working-age residents to support every retiree, which puts additional pressure on younger taxpayers.

This fiscal situation not only affects younger generations but also impacts seniors. Laura Tamblyn Watts, CEO of CanAge, points out that boomers are the most indebted generation and are retiring with significant debt. Additionally, downsizing is becoming increasingly challenging for seniors, as most rental places are not suitable for older individuals. Many retirees are forced to sell their homes or move to remote areas, making access to services and healthcare more difficult.

Overall, the retirement landscape in Canada is facing significant challenges. It’s important for individuals of all ages to consider their financial planning and explore strategies to ensure a secure retirement.

Statistics Canada data shows that when the Canada Pension Plan (CPP) was created in 1965, the average life expectancy was much lower than it is today. Now, retirees are living longer and facing new financial challenges. While some boomers are retiring with mortgage debt, they have also benefited from the housing market’s wealth accumulation. However, downsizing has become more difficult for seniors, and many are forced to move to remote areas with limited services and healthcare access.