New BMO survey highlights the general concern surrounding economic volatility
A significant share of Canadians believe that they need around $1.7 million in savings in order to retire, according to a new BMO survey.
This amount was approximately 20% larger than the $1.4 million seen during a similar poll conducted in 2020, underscoring the general anxiety surrounding long-term prospects in the volatile Canadian economy.
The annualized inflation rate reached 8.1% in mid-2022, its highest level in roughly four decades. And while BMO Economics has predicted that inflation will settle at around 3% by the end of 2023, Canadians will still have to contend with markedly higher costs of living in the interim.
“The sharp increase in 2022 exceeded wage gains, resulting in a significant loss of purchasing power for most families,” BMO said.
The poll found that 74% of Canadians are concerned about the impact of current economic conditions on their financial situations, while 59% said that the prevailing environment will affect their confidence in meeting their retirement goals.
“If you look at the average Canadian, they’re feeling the rising inflation costs,” said Caroline Dabu, head of wealth distribution and advisory services for BMO Financial Group. “And so, not surprisingly, we are seeing that Canadians are feeling they absolutely will need more to retire.”
The survey also found that around 22% of Canadians are planning to retire between the ages of 60 and 69, with an average age of 62.
