Generation X and Y are advised not to bank on the wealth built up by their Baby Boomer parents to get by later in life. A new survey shows the money may not come.
It shows 27 per cent of Canadian respondents think it’s better to blow all of their money while they’re still alive, and let their children fend for themselves. That’s compared to a global average of 21 per cent, among the 15 countries surveyed, who felt it was better to spend their money and let the next generation create its own wealth.
Only 7 per cent of Canadians felt it was best to save as much as possible to pass along to their kids. The other two-thirds plan to save some for the next generation, but also spend more on themselves too.
The survey also shows just 11 per cent of Canadians close to retirement plan to support their adult children, which is well below the global average of 21 per cent.
Canadians feeling forced into retirement
The report, titled The Future of Retirement, Choices for Later Life, also shows Canadians – more than any other country but Australia – felt they were forced into retirement.
Fifteen per cent of Canadian respondent that are now retired said they went off the clock due to a lack of employment opportunities, compared to 17 per cent of Australians. The global average was 10 per cent.
“While the underemployment challenges facing today’s youth and new graduates are more widely known, this latest research suggests that older Canadians and those approaching retirement age may also be feeling the pinch of underemployment at time when saving for the future is often at its most crucial,” said Betty Miao, HSBC Bank Canada’s executive vice president and head of retail Banking and wealth management.
The survey says 10 per cent of Canadians surveyed between the ages 45 and 54 shifted into semi-retirement, “suggesting that in the post-downturn job market, many experienced workers are being overlooked for full time positions.”
It also show 45 per cent Canadian workers plan to semi-retire before fully retiring, versus 17 per cent of people now retired, who took that same two-stage route to their life after work.
Fifteen per cent said they don’t plan to retire at all.
A separate Sun Life survey suggests many Canadians may not be prepared for the health care bills they may rack up once they leave the workplace, or even while they’re working.
Sun Life’s 2014 Canadian Health Index says 89 per cent of Canadians think they’re covered for all costs associated with hospital stays and don’t expect to pay for services such as home care or devices like hearing aids.
“Canada’s health insurance system was set up to respond to people’s need for it, rather than for their ability to pay for it,” stated Brigitte Parent, Sun Life Canada’s senior vice president, individual insurance & wealth.
“Though government and employer health plans provide complementary coverage for many health related expenses, there are common, necessary medical services that are not fully covered.”