Millennials ignoring saving for retirement, says latest Manulife survey
OREANDA-NEWS. October 23, 2015. Four in ten (43 per cent) of the affluent millennials surveyed believe they will have more than enough income when they retire, despite putting saving for retirement near the bottom of their priorities, according to the most recent Manulife Investor Sentiment Index. They are also less concerned (seven per cent) than their parents and other age demographics that they will run out of money in retirement.
The chief concern of millennial respondents is to maintain their current lifestyle (24 per cent). For a generation who is known for being laden with school loan debt, one in five millennials (19 per cent) feel that they are ahead of schedule in their current financial goals, a figure that is almost twice as much than for other age groups.
"Most millennials are more than 30 years away from retiring so they are setting themselves up for failure if they think they’ll be well-off in retirement when saving for it isn’t their chief financial concern," said Sam Sivarajan, VP & Managing Director, Manulife Private Wealth. "Millennials should be focused on paying down debt, building their savings and getting into good spending habits if they want to be financially secure in retirement."
Millennial respondents are three times more likely (15 per cent) than other age demographics to indicate that saving for or purchasing another big ticket item is their chief financial concern. Millennials believe that interest rates (63 per cent) and oil and gas prices (54 per cent) will have the most effect on their investment strategy over the next six months.
Oil and gas concerns highest in Alberta and Atlantic Canada
More than four in ten (44 per cent) of Canadian surveyed said oil and gas prices will have a significant effect on their investment strategy. This is especially prevalent in Alberta (55 per cent) and Ontario (49 per cent).
Among national issues, survey respondents are most concerned about the cost of healthcare (76 per cent), and oil and gas prices (73 per cent). Concerns about oil and gas were highest in Alberta (80 per cent) and Atlantic Canada (79 per cent). Women (77 per cent) expressed significantly higher concerns about oil and gas prices than men (69 per cent).
"In Canada, data shows that the energy sector accounts for about 300,000 direct jobs and an additional 300,000 to 400,000 indirect jobs," said Sivarajan. "That’s more than two per cent of the overall Canadian workforce so the concern about oil and gas prices is understandable, particularly in Alberta and Atlantic Canada where much of the energy sector’s \\$200 billion in GDP is generated.
"We can expect concerns about oil and gas prices to remain high as oil prices continue to slump below US\\$50 per barrel."
Canadians investing less in ETFs and Mutual Funds
The survey also found that Canadians are curbing their investments in fixed income, Exchange Traded Funds, and mutual funds (all down 4 per cent from six month previous), while they continue to pour money into their homes and RRSPs. In fact, 93 per cent of respondents own their own homes and 70 per cent felt it was a good time to invest in them.
Almost one-third of Canadians say their chief financial concern is to maintain their current lifestyle. They were also concerned about running out of money in retirement and entering into retirement with debt.
Financial Readiness
More than half (52 per cent) of respondents say they are in a better financial position than they were two years ago.
Find out more about your financial wellbeing by taking The Readiness Quiz.
For more information and historical data, visit Manulife.ca.
About the Manulife Investor Sentiment Index
The Manulife Investor Sentiment Index is a semi-annual measure of investors' views on a range of asset classes and savings and investment vehicles, as well as their confidence in these areas. This year marks the 16th year that Manulife has conducted the survey. The index is based on an online survey of 1,002 Canadian adult financial decision makers who were at least 25 years old, with a household income of at least \\$75,000 and investable assets of at least \\$100,000. The survey was conducted in May 2015 by Environics Research.
About Manulife
Manulife Financial Corporation is a leading international financial services group providing forward-thinking solutions to help people with their big financial decisions. We operate as John Hancock in the United States, and Manulife elsewhere. We provide financial advice, insurance and wealth and asset management solutions for individuals, groups and institutions. At the end of 2014, we had 28,000 employees, 58,000 agents, and thousands of distribution partners, serving 20 million customers. At the end of June 2015, we had \\$883 billion (US\\$708 billion) in assets under management and administration, and in the previous 12 months we made more than \\$22 billion in benefits, interest and other payments to our customers. Our principal operations are in Asia, Canada and the United States where we have served customers for more than 100 years. With our global headquarters in Toronto, Canada, we trade as ‘MFC’ on the Toronto, New York, and the Philippine stock exchanges and under ‘945’ in Hong Kong. Follow Manulife on Twitter @ManulifeNews or visit www.manulife.com or www.johnhancock.com.
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