Traditional views of what retirement looks like are being replaced
What does retirement look like for your clients? A trick question perhaps, as every person is different and changing priorities are adding to the complexity of answering it.
A new Leger survey conducted for Wealthsimple reveals how Canadians are seeking retirement that is less traditional and reflects evolving factors such as the cost of living, people’s work lives, and the happy fact that we are living longer.
Those aged between 25 and 44 are not interested in how things used to be. Working until they are 65 and then taking it easy for the rest of their lives, does not appeal to this cohort, with 74% saying it’s an outdated concept.
Instead, Millennials and GenZs will mix leisure with continued professional passions, entrepreneurship, volunteering, and more. How they mix it will be an individual choice, adding to the importance of financial advisors and financial planners to have a holistic view of each client’s retirement goals.
“This new outlook on retirement is motivated by more than a challenging economic climate,” says Mike Katchen, CEO of Wealthsimple. “It’s a new perspective on the future driven by younger generations. They are looking for flexibility, personalization and control over their future, rather than feeling controlled by conventional wisdom.”
Retirement challenges
The challenge is to ensure that these hybrid retirement ambitions can be realized, especially as 41% of respondents want it to begin well before they even reach their 55th birthday. Add to that the view of more than half of respondents that they don’t expect to have sufficient savings to retire in the conventional sense and will be relying on investments to augment their chosen lifestyle.
Getting to where younger Canadians want to be in their retirement journey may take some creative thinking. The recent 2024 Mercer Retirement Readiness Barometer considers the current economic environment, particularly higher interest rates, and concludes that those younger Canadians that are both saving for retirement and paying down debt would be better focusing on the latter for now.
