Strugglers versus savers: Why some young Canadians say retirement is ‘impossible’ while others plan to hang it up early
Millennial and Gen Z Canadians face huge financial obstacles, but some are finding ways to retire early. Toronto-based comedian Hilary Henderson, 29, isn’t thinking about retirement at all. Henderson earns about $8,000 a month from comedy gigs and brand deals, doesn’t have any credit card or student debt and regularly tracks her expenses. She splits rent on an apartment in downtown Toronto with her partner, which totals about $3,000 a month. But paying her bills, building savings to eventually purchase a home and managing the various business expenses that come with a career in stand-up comedy take precedence for Henderson, long before the nebulous notion of no longer needing to work.
“It feels like a distant thing in the future,” Henderson said. “As somebody who had depression, I used to have a joke in my stand-up that was like, ‘I’m not saving for retirement. Who knows if I even want to live that long?’” Henderson’s outlook echoes that of many younger Canadians facing a daunting financial future. But while many like her have fading hopes for retirement, others are starting to save younger than previous generations.
Mel Dorion, 38, based in Gatineau, Que., has been saving for the future since she was just 14. She has been “semi-retired” for about five years. “(My partner and I) were encouraged to save in our RRSPs from our first jobs at 14, and that allowed us to have a down payment for our home eventually,” Dorion said. Before semi-retiring, both she and her partner worked in higher-paying jobs for the government and led a frugal lifestyle, which allowed them to build significant savings. But Dorion, who is nearly a decade older than Henderson, transitioned into adulthood in a different economic era, lives in a more affordable city and acknowledged her financial upbringing may be different than that of other millennials or Gen Z Canadians.
This tracks with the conflicting picture emerging out of data about young savers versus those who have given up hope of retiring. Nearly half of young Canadians under 35 think it will be financially necessary to work longer and retire later than their parents, while a third don’t think they will ever be able to retire at all, according to a February report from insurance company Co-operators Group Ltd. Less than half said they can cover basic expenses and set aside money for savings, and only 38 per cent report regularly saving for retirement.
Meanwhile, a recent poll from the Canadian Imperial Bank of Commerce found the average Gen Z Canadian is starting to save for retirement earlier, at 24, compared with older generations, who started at age 30 on average, and expect to get there at a younger age. It’s a polarization that Tricia Williams, director of research, evaluation and knowledge mobilization at the Toronto-based Future Skills Centre research institute, attributes in part to a division between the haves and the have-nots of the saving world. A young person who is able to build a career is more likely to open an RRSP and start saving for the future, she said. On the other hand, a young person struggling to find work or relying on infrequent contract jobs is not going to benefit from employer matches or a pension plan and is much less likely to contribute to a savings account.
