More than three-quarters of Canadians are concerned they will not have the money they need to retire due to inflationary pressures, a new survey suggests.
Seventy-six percent of respondents to BMO’s annual retirement survey said they are worried they won’t be able to afford retirement due to the rising cost of living.
The findings from the survey of 1,500 Canadians found that the average individual anticipates needing $1.54 million to retire comfortably but 63 percent of those polled say rising prices over the past year have limited their ability to save for the future.
Respondents who say inflation is affecting their saving capabilities have adapted by cutting back on other expenses or lowering their contributions to retirement savings, the survey said. Others have made plans to work longer and some have put off retirement savings completely.
“Inflation is a major concern for Canadians, and the spike in prices as the economy emerged from the pandemic is a stark reminder rising prices can affect spending, investment and savings plans,” BMO senior economist Robert Kavcic said. “Inflation should always be a major consideration when saving and investing for retirement.”
Despite the rising concerns regarding inflation, Canadians’ expectations for the amount required for retirement have decreased in comparison to 2023. The previous BMO survey found that Canadians anticipated needing $1.67 million to retire in comfort.
Meanwhile, some Canadians are finding ways to grow their retirement savings amid the pressure of rising prices, the survey found.
Contributions to Registered Retirement Savings Plans (RRSPs) have increased, showing a 14 percent rise from the previous year to average $7,447 annually, BMO said. The current number exceeds the average contribution record of $6,822 established in 2021, a year during which the COVID-19 pandemic led to an increase in savings rates.
The online survey of Canadians aged 18 and older was conducted by Pollara last November. A similar poll done earlier that fall found similar worries among Canadian adults.
A poll from CPP investments said 63 percent of Canadians feel “a lot of anxiety” about financial decisions and 67 percent are worried about running out of money during retirement.
While the poll found a lower percentage of Canadians were concerned about retirement than in the BMO survey, it was conducted prior to U.S. President Donald Trump winning the Nov. 5 election and his subsequent tariff threats.
