Rising costs drive workers to cut contributions, delay saving, and question how long nest eggs last
Inflation is pushing many Canadians to cut back on the very savings meant to fund their “golden years.”
According to the latest BMO Retirement Survey, nearly three quarters (74 percent) say rising prices have heightened concerns about having enough savings to support them in retirement, and two thirds (66 percent) say inflation is already affecting their ability to save and invest for the future.
Among those who report a negative impact on their finances, nearly half (47 percent) estimate they now spend an extra $100 to $300 a month on necessities, while about one third (34 percent) say their monthly expenses have risen by more than $300.
Those added costs are reshaping retirement behaviours.
BMO reports that 31 percent are contributing less to retirement savings, 27 percent are cutting back on spending to maintain their savings contributions, and 17 percent have postponed retirement savings entirely.
The survey also highlights uncertainty about how long savings will last.
The largest group (30 percent) say they just do not know how long their money will last before it runs out.
Among those who offer an estimate, 22 percent believe their savings will last 10 to 19 years, and only 13 percent believe their nest egg would last over 30 years.
“Inflation is a threat to retirement savings, but it doesn’t have to derail our clients’ plans,” said Brent Joyce, chief investment strategist at BMO Private Wealth.
“The key is to stay invested and take a proactive approach.”
He said advisors can “incorporat[e] inflation assumptions into comprehensive financial plans” so Canadians see how their portfolios may perform over decades, not just years.
With disciplined investing and expert guidance, he added, clients can aim to grow their money faster than inflation and support the lifestyle they envision.
“Comprehensive financial and wealth planning is essential to providing clarity – especially when navigating complex and ever‑changing variables like inflation,” said Paul Lalonde, head of wealth planning, BMO Private Wealth Canada.
He said a “customized, holistic wealth planning approach” helps clients see how these factors interact and what savings and investment strategies they need to reach their long‑term retirement goals.
By modelling a range of possible futures and tailoring strategies to each client’s circumstances, advisors can help turn uncertainty into confidence and provide the peace of mind Canadians need as they look ahead to retirement.
