Young Canadians worried about CPP, survey reveals

By Doug Watt | January 5, 2004 | Last updated on January 5, 2004
2 min read

(January 5, 2004) Despite government assurances about the viability of the CPP, a majority of young Canadians are worried it won’t be around when they reach retirement age. A survey released today by TD Waterhouse Canada reveals that more than half of Canadians aged 25 to 39 lack confidence in the CPP.

By comparison, Canadian baby boomers (aged 40 to 59) are significantly more confident the CPP will be there for them, the study found.

Nearly two-thirds of those aged 25 to 29 — often referred to as “generation Xers” — said they planned to rely on either personal savings or RRSPs to fund their retirement.

“It’s no surprise that generation Xers are more pessimistic about their retirement prospects,” says Patricia Lovett-Reid, senior vice-president at TD Waterhouse Canada. “They grew up and entered the job market under the long shadow of the largest population cohort in Canada’s history. They’ve seen the e-business/tech stock bubble burst and investor optimism turn to investor despair. They’ve read about our aging population and the strain that rising healthcare costs will place on our economy. All in all, it’s a pragmatic look at the future.”

Perhaps, but concerns about the future of the CPP may be unfounded. An actuarial report released last year found that the federal pension plan will collect enough premiums and investment income to meet its obligations until at least 2075, well beyond the retirement age of generation Xers.

Under the current schedule of contribution rates, the funding level of the CPP is expected to increase significantly over the next 20 years, the actuary’s report said. CPP assets are projected to swell to $1.6 trillion by 2050, nearly six times expenditures, rising to $4.9 trillion by 2075.

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  • The TD Waterhouse study also found that although generation Xers will rely on their RRSPs in their golden years, only 58% actually have a plan, compared to 68% of boomers. However, generation Xers are more likely to use monthly contribution plans and lead the way in online contributions, the study adds.

    For advisors, the TD Waterhouse survey found that generation Xers are more likely to be do-it-yourself investors compared to other age groups: one-third said they managed their investments without any professional advice.

    “This is one area where generation Xcould take its cue from other age groups,” says Lovett-Reid. “Getting advice or guidance is a good way to go for many investors given the complexities and volatility in today’s markets.”

    The TD Waterhouse poll was conducted by research firm NFO CF Group in October and November of last year. More than 1,000 telephone interviews were conducted in a random sample of Canadians aged 18 to 69.

    Filed by Doug Watt,,


    Doug Watt