According to a Bank of Montreal survey, Canadian baby boomers are not financially prepared for their retirement. They would be short more than $400,000 on average to reach their savings goals.
Among the findings of the BMO survey published at the end of August: 46% of baby-boomers born between 1945 and 1964 fear that they cannot ensure their financial security at retirement, an increase of 29% compared to 2006. There is a wide gap between what they feel necessary to have financial security during this period of their lives ($658,000) and what they have actually saved up to now ($228,000). To reach their goals, they would have to raise $430,000 on average. This is a substantial amount when we consider that the oldest baby-boomers have reached 68 years of age and that a large proportion of the others are only a few years from retirement.
These results are even more alarming when compared with spending by an average elderly couple in 2009, which was $54,100 according to Statistics Canada. To be able to have such annual retirement income available, a retired couple would need to have saved $1,352,000. For a portion of baby-boomers, the funds are simply not there.
Several sources of additional revenue
How is this shortfall to be bridged? There are several possible directions. Aside from the fact that many baby-boomers are planning to delay their retirement, 71% are also planning to hold down part time work to obtain additional revenue, 44% are thinking about selling collector items, antiques or other possessions that they no longer use and 32% expect to sell their house.