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Why Canadians are less prepared for retirement than Americans

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Canadian baby boomers approaching retirement are in even worse shape than their American counterparts.

A new survey by Franklin Templeton found 21 per cent of Canadians age 55 to 64 polled say they have not saved a cent for retirement, compared to 17 per cent in the United States.

The situation is not great on either side of the border though, considering around 15 per cent of Canadians and 13 per cent of Americans expect to work until they die.

For those that were able to retire, more young American boomers (60 per cent) say they called it quits early compared to Canadians (54 per cent).

Nearly a quarter of young boomers currently support a dependent family, which naturally get in the way of socking money away for retirement.

"With life expectancy increasing and retirement savings becoming ever more challenging, due to the high costs of living, we are seeing increased concern over having enough money for retirement across all generations," said Matthew Williams, SVP, Franklin Templeton Canada, in the report.

"Although it's never too late to start saving, the best time to start contributing to retirement savings vehicles is when a person starts out in their career and may not have big financial commitments like a mortgage or childcare costs—and to find a way to maintain healthy savings habits as they age."

Williams urges everyone who works for a company that offers a group retirement plan that automatically takes money off their cheque, or even matches contributions, to take full advantage.

Of Canadians who plan to retire within five years, 86 per cent expressed concern about paying expenses,

Over a quarter (27 per cent) of Canadians surveyed say lifestyle is the top concern heading towards retirement, compared to 17 per cent for Americans.

More than one-third of Canadians and 27 per cent of Americans say they do not know how they will pay for their medical expenses in retirement.

Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitte@jessysbains

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