TORONTO, ONTARIO--(Marketwire -08/01/12)- The BMO Retirement Institute today issued a report which found that young Canadians, while aware of the need for retirement planning, are putting their retirement at risk by not considering how much money they will need and are often delaying saving for retirement.

The report, Broadening the Approach to Preparing for Retirement, examined attitudes on retirement among young adults (between the ages of 18 and 34):

"While it's great news that young adults appreciate the importance of retirement planning, it's a concern that many are not backing it up with concrete action," said Tina Di Vito, Head of the BMO Retirement Institute. "A clear dichotomy exists between what young people think about retirement and what they are actually doing to prepare for it."

The report also outlined the importance of attitudes and behaviours when preparing for retirement, as well as the critical role parents can play.

Attitudes and Behaviours Result in Action

According to Ms. Di Vito, attitudes and behaviours are strong predictors of financial preparedness for retirement. The report found that young adults are the least prepared for retirement, despite the fact that one-quarter of them expect to retire early. While almost a quarter (23 per cent) of Boomers over the age of 55 have thought a lot about how long they might be retired, only five per cent of young adults have given this a lot of thought. As a result, they are not spending adequate time gathering information on retirement planning, attending seminars, or consulting others on retirement planning; many are also not actually saving.

Factors that may hinder their progress in establishing themselves financially, in general, let alone for retirement, include poor post-economic recession job prospects, rising student debt and lower real wages.

The Importance of Role-Models

The report also found that role models are critical to helping young people think differently about their financial future. With half of young adults 20 to 29 years old still living with their parents, Mom and Dad can be effective financial role-models by demonstrating sound financial management and savings habits along with involving their children early in the process. This could involve engaging their adult children in contributing towards household expenses as soon as they begin to work. Making regular contributions to a Registered Education Savings Plan (RESP) and involving their kids in the process while they are in their early teens, talking to kids about money management and budgeting, encouraging their adult children to attend retirement-related seminars and webinars, and introducing them to financial professionals are other ways in which parents can help.

"Parents and other influential adults have to foster an environment that will encourage young people to think about their financial future," said Ms. Di Vito. "Despite the challenging and complex financial realities facing young people today, increasing their financial preparedness for retirement will guide them towards positive results."

Visit link:
BMO Retirement Institute Report: Time to Get the Kids Thinking About Retirement