Canadians have revealed some interesting notions about what it takes for them to feel financially comfortable.
You need how much?!
A survey produced for the investment brokerage Edward Jones suggests Canadians must have some extravagant hopes and dreams. When asked how much money they think they would, individually, need to feel “financially comfortable” the average amount was $250,000 a year – before taxes. When asked how much they thought it would take to fund the “lifestyle they truly desired” Canadians tacked on another 20%, saying $300,000 a year, pre-tax, would do the trick.
Those numbers are pretty astounding considering the most recent national census put the total, median household income in Canada at $70,336.00 a year, in 2015. The total median income for an individual was just $56,000.
Modest millennial expectations
As might be expected, different groups have different ideas about what they need, in order to get what they want. Interestingly the younger cohort has the lowest expectations when it comes to financial comfort. On average, millennials (aged 18 – 35) figure it will take about $167,000 a year. But that number jumps significantly – to nearly $300,000 – in order to have the lifestyle they truly desire. Given the homeownership ambitions of millennials, mortgage brokers may find themselves having to manage the expectations of these younger buyers.
The next group (aged 35 – 54), not surprisingly, have somewhat higher expectations. They feel about $227,000 a year will give them financial comfort. Being as these are the prime family-building years the additional $60,000, no doubt, reflects the added costs of raising children and meeting other family responsibilities.
For the oldest demographic (aged 55 – 64) retirement expectations appear to be the top consideration. This group believes it will need almost $400,000 a year to hit their financial comfort zone. But when it comes to achieving their desired lifestyle the demands of this group plunge by nearly $75,000 to about $325,000. Given the growing trend of children turning to the “Bank of Mom & Dad”, this could be a sign that some older Canadians are carrying unwanted financial obligations.