The Boomers are often looked upon as a privileged bunch. A group of happy-go-lucky retirees, or soon-to-be retirees, that have more access and more money heading into their Golden Years than any generation before them. But, Boomers have their problems too; and many of them aren’t skipping off into the sunset. Instead, they’re looking back on investments wasted, and thinking about how they would have done things differently. And just like always, younger generations might have something to learn from them.
The fact that many Boomers aren’t happy with what their retirement picture isn’t what they thought it’d look like comes from a recent survey done by the Bank of Montreal. The results showed that 42% of Boomers regretted not saving for retirement earlier in life; while 25% would make regular RRSP contributions if they could do it over (something to think about on today’s deadline RRSP day for those who still have a few hours before their bank closes.) As for just overall wishing that they had taken the time to plan for their retirement more carefully? 24% of Boomers admitted they fell into that category.
Bev Moir, senior financial adviser with Scotia McLeod in Toronto, says that these survey results fall right in line with a Boomer’s life, which up until this point has largely been wanting to save for those retirement years, but never being able to due to mortgages and other expenses. The simple, “It’s always something,” reasoning. Ms. Moir says, “When people are starting a family, buying a house, starting careers, and not earning a lot of money, there aren’t a lot of extra dollars available. So what some cash-strapped Boomers did was put off retirement saving only to have their plans derailed by life interruptions such as divorce, illness, or layoff.”
But planning more and more planning earlier are just two ways that Boomers say they would do things differently. Many Boomers were vigilant in investing, but were disappointed when the investments they expected to earn 7% – 9% returns on only yielded 3% – 5%. That’s a huge cut if you thought you had built up a nice cushion for yourself. So what would they do now?
Change their investment strategies and where they put their money mostly. 31% of Boomers said that they would now invest in real estate instead, taking on second mortgages to pay for their residential mortgages. Another 31% said that they would put their money into GICs; and 20% would simply invest in cash.
So what does this tell us? That if you want a guaranteed return on your investment, GICs might be the best way for you to go. If however, you’re willing to pay attention to the cycles of the housing market and know how to work within it, real estate can also be a huge return on investment. And, whether you choose GICs, RRSPs, real estate, or some other form of investing, if you can start doing it when you’re in your early 20s, so much the better.
