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Advice from retirees to younger generation – start saving early

Advice from retirees to younger generation – start saving early

February 25, 2016

Senior reading the news seated on a pile of coinsHow much money will you need every year to support your future retirement? That is the “million dollar” question.

Many find it difficult to make ends meet and to budget their spending while they have a regular paycheck. Once their income stops, planning becomes much more difficult.

Last week an Ipsos poll conducted for Sun Life Financial was released. Retirees living in Ontario spend 60 percent of the salary they earned just prior to retirement.

The Ontario number is very close to the Canadian average, which is 62 percent.

Our observation is that the retirement question is being asked by people at the beginning or middle stage of their career. For many, financial planning has become very difficult.

Employment opportunities are not as strong as they were for the previous generation. The cost of housing has gone through the roof.

Personal consumption has soared partly because of the very enticing low interest rates. This is our new reality.

Those in their 30s and 40s look ahead and wonder what kind of retirement lifestyle they can expect. There are lots of current expenses like paying off debt and maintaining a lifestyle.

Everyone knows that ultimately they will retire and for many that is a very large unknown. Some consider this when choosing an employer who will offer a pension.

Some seek professional advice. For most this is beneficial.

Sixty-two percent of retirees who have a financial advisor say they have saved enough for retirement. Of those who do not have an advisor, only 38 percent say they are ready for retirement.

The most interesting part of the survey was asking retirees what words of wisdom they would pass on to the younger generation. Their best advice is to start saving and investing early.

Two other important suggestions are to take care of your health and live within your means. These three suggestions were given by the majority 88 percent to 85 percent of the time.

There were 18 separate pieces of advice retirees would pass to those still working. You might be interested to hear the least recommended advice.

Only 26 percent suggested to work as long as you can. Some younger Canadians that know the difficulty of retirement often think their solution is to continue the number of years they continued to work.

The survey is useful because it provides advice from those who have already retired. Knowing that others who have gone before you spend 60 percent of their salary during retirement is a starting point.


We recommend projecting your own personal cash flow during retirement, to see what level of retirement spending is required to sustain your preferred lifestyle.

Retirement can last for decades. Invest the time now to ensure you are ready to enjoy your life after work ends.

We echo the advice of retirees. Start saving and investing at an early age.