The baby boomer generation spawned the concept of "Freedom 55," the early retirement goal that dangled like a carrot on a stick in front of countless Canadians.
But that enticing dream is moving out of the reach of many Canadians in the 18-54 age group who find themselves pinched between the twin pressures of financing their children's education and caring for their aging parents.
The 23rd annual RBC RRSP Poll conducted recently found that almost half of Canadians surveyed (48 per cent) are concerned that saving for their children's education will crimp their ability to save for retirement. Thirty-six per cent worry that looking after their elderly parents will hinder their retirement efforts.
Yet 57 per cent of respondents say their retirement expectations have been shaped by the retirement experience of their parents. The trouble is, retirement is almost certainly going to be different for the next generation of retirees, according to a news release from RBC.
Employer-sponsored pension plans are becoming increasingly rare, forcing Canadians to work harder to put away money for retirement. Then, too, the federal government's plan to raise the eligibility of Old Age Security to 67 from 65 (to be phased in over a six-year period beginning in April 2023) is going to make even retirement at age 65 a challenge for many people.
"While Canadians may see their parents' retirement experience as a model for what to expect, the reality is that their retirement may not be the same, particularly if they are part of the sandwich generation with both aging parents and school-age children," said Amalia Costa, head of Retirement Strategies with RBC, in the news release.
Many are already experiencing that and statistics show the number of Canadians caught in the sandwich is growing. A 2008 Statistics Canada study found the number of Canadians over age 45 who were caring for aging parents increased by about 670,000 over a five-year period from 2002 to 2007, and many of them were still involved in parenting their children.
Meanwhile, a recent paper from the Canadian Centre for Policy Alternatives titled "Working After Age 65" noted that 24 per cent of Canadians age 65 to 70 are still working, up from 11 per cent in 2000.
Freedom 55? It's a nice dream, but not a likely reality for many Canadians.
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