CPP Investments finds younger Canadians and women fear outliving retirement savings the most
A growing number of Canadians are anxious about retirement finances, with more than six in ten (61 percent) expressing fears of running out of money during their retirement, according to a new CPP Investments survey.
Younger Canadians and women are particularly concerned, with 67 percent of those aged 28 to 44 fearing insufficient income in retirement.
This group attributes their anxiety to a lack of savings and an absence of a clear retirement plan. Women also report higher levels of worry, with 66 percent saying their savings may not be sufficient, compared to 56 percent of men.
Confidence about retirement, the survey finds, increases when individuals have a financial plan. For non-retirees, a retirement plan was a leading factor in reducing fears of outliving retirement funds.
CPP benefits play a significant role in alleviating these concerns, with 73 percent of respondents indicating they rely on, or plan to rely on, the CPP as a portion of their retirement income.
Michel Leduc, senior managing director and global head of Public Affairs and Communications at CPP Investments, noted the importance of confidence in shaping financial planning and decision-making.
He stated that “running out of money in retirement is a real worry for Canadians,” particularly as life expectancy continues to rise.
Leduc emphasized that the CPP provides essential security, explaining, “One thing that Canadians have that protects them against this risk is the CPP because your benefits are payable as long as you live and indexed to inflation.”
He believes understanding the CPP’s role as a stable source of retirement income could help reduce financial anxiety and foster long-term planning.
Over the past year, Canadians have increased their estimates of how much they will need for retirement. For those who offered specific figures, the expected annual income required during retirement rose from $50,000 to $55,000.
In terms of total savings, expectations increased from $700,000 to $900,000, with the largest jump observed among those experiencing daily financial stress or lacking a retirement plan. Nonetheless, around half of the survey participants expressed uncertainty about how much they will need to save.
Leduc highlighted that Canadians contribute to their retirement through CPP payments.
He added that “working Canadians are already saving for their retirement through their CPP contributions,” emphasizing that the CPP, through CPP Investments, “will be there for them and for generations to come.”
Financial stress remains a significant issue for young Canadians, with 63 percent of those aged 18 to 24 expressing worry about making the right financial decisions. This anxiety gradually decreases with age, with only 33 percent of those 65 and older reporting similar concerns.
Leduc acknowledged the challenge for younger individuals, saying, “The younger generation is particularly stressed about their finances. This underscores the importance of building a solid understanding of your personal finances and seeking resources to improve financial literacy to help you manage money more effectively.”
He added that recognizing CPP as a foundation for retirement might alleviate some stress, making retirement goals feel more attainable.
