From Boomers to Millennials: How an era can shape financial planning habits

From Boomers to Millennials: How an era can shape financial planning habits 
- TD Canada Trust and psychology professor Dr. J Bruce Morton explore 
generational attitudes towards savings, offer advice to all ages - 
TORONTO, Jan. 15, 2013 /CNW/ - Spenders and savers of all ages can point to 
specific social and economic factors that shape their generation's views on 
financial planning and saving for retirement. Each generation, from Boomers to 
Gen X to Millennials, have specific attitudes towards money and saving 
influenced by when they grew up and the realities of their lifestage. 
John Tracy, senior vice president, TD Canada Trust, and Dr. J Bruce Morton, 
Department of Psychology, Western University Canada, take a look at the 
influences on Millennials, Gen Xers and Boomers' approach to saving for the 
future in order to give Canadians the insight they need to make smart 
financial decisions at any age. 
"Understanding what motivates your generation to save can help identify useful 
financial planning strategies for each stage of your life," says John Tracy, 
senior vice president, TD Canada Trust. "Regardless of your life stage, 
knowing how much you will need to retire is essential to managing your money 
and being prepared financially for the future. A financial advisor can help 
determine what your numbers look like, work with you to create a plan, and 
make adjustments as your needs and lifestyle change." 
According to Dr. Morton, saving for the future touches on a fundamental 
trade-off in human decision making, namely balancing the opportunity for small 
immediate rewards with an interest in larger long-term benefits. How each of 
us balances this trade-off depends in part on values, priorities and 
motivations, which to a large extent are influenced by the world we grew up 
in. "While every person makes decisions based on what makes the most sense 
from their vantage point - specifically how to maximize gains and minimize 
losses - what seems reasonable to some individuals may not be reasonable to 
others," says Dr. Morton. "This decision-making process is influenced by the 
generation to which we belong, and the corresponding cultural and economic 
factors that make the future appear differently to us." 
Millennials (1982-1999)
Research from TD Canada Trust shows that 65% of Millennials continually feel 
they are spending too much money (versus 56% of Gen X and 44% of Boomers). 
They are also the most likely to feel there is more they need to know about 
the savings and investment options available to them (55% versus 51% of Gen X 
and 45% of Boomers). 
"Perhaps the defining factor for the Millennial generation is persistent 
economic uncertainty," says Dr. Morton. "Faced with job market challenges and 
an uncertain economy, Millennials may find it difficult to envision a concrete 
future, making saving for the long-term seem less reasonable." 
For Millennials who feel it will be difficult to save money, Tracy recommends 
setting up an automated savings plan that invests a set amount at regular 
intervals into an RSP. Contribution amounts can start small and increase as 
income grows. 
"While retirement may feel far away for Millennials, it's important to 
acknowledge that it's inevitable," says Tracy. "With time on your side, saving 
even a little regularly can add up, while allowing you to take advantage of 
compound interest." 
Gen X (1965-1981)
Of the generations surveyed, Gen X had the most competing financial 
priorities, with saving for retirement (55%), paying off their mortgage (44%), 
paying off loans (38%), paying down credit card debt (37%) and creating an 
emergency savings fund (37%) topping the list. With so many priorities, it's 
not surprising that 70% continually feel they are not saving enough. 
"Gen X individuals grew up during a period of unprecedented economic 
transformation marked by greater fluidity in the job market and the 
elimination of mandatory retirement. These larger economic forces have led to 
a shift away from traditional notions of career and retirement," says Dr. 
Morton. "As a result, many Gen Xers anticipate working well into traditional 
retirement years, undermining the incentive to save for the long-term." 
Compared to other generations, Tracy adds, Gen Xers often have an abundance of 
competing financial priorities, making it challenging to carve out money for 
retirement savings. Even though Gen Xers may feel the need to postpone 
retirement, it's important to contribute regularly during peak income earning 
years to build a comfortable nest-egg for retirement - whenever it may start. 
"As a general rule, Gen Xers should aim to save enough to have 60% to 80% of 
their annual working income per year to live on during retirement if they 
don't want to change their lifestyle," advises Tracy. "If more needs to be 
saved, be diligent about finding ways to cut back on other expenses, as even a 
modest increase to retirement savings can add up." 
Boomers (1946-1964)
While eight-in-10 Boomers (79%) feel confident they are managing their money 
well, the majority are still worried about having enough money (56%). 
"As part of the post-war generation, Boomers were not only influenced by 
parents who survived the Great Depression, but many have also enjoyed economic 
affluence and employment stability throughout their career, making saving for 
both the short and long-term appear sensible," says Dr. Morton. 
Tracy recommends Boomers first assess how much they will need in retirement to 
maintain the lifestyle they want. With this in mind, engage a financial 
advisor and work backward to develop a realistic plan that includes lowering 
or eliminating debt prior to retirement to free-up income during this stage in 
your life. 
"As a Boomer, even if saving for the future is a top priority, it's equally 
important to know how much you realistically need to save and whether you are 
on track to reach your goal," says Tracy. "Compare your goal to the income you 
will have from your current savings to determine how much more you need to 
About the TD Canada Trust RSP Poll
TD Bank Group commissioned Environics Research Group ( to 
conduct an online custom survey of 2,407 Canadians 25 years of age or older, 
including 201 Millennials, 543 Gen Xers and 443 Boomers. The total sample 
was weighted by age, gender and region to be proportionately representative of 
the Canadian population who are 25 years of age and older. Responses were 
collected between December 5 and 11, 2012. 
About TD Canada Trust 
TD Canada Trust offers personal and business banking to more than 11.5 million 
customers. We provide a wide range of products and services from chequing and 
savings accounts, to credit cards, mortgages and business banking, to credit 
protection and travel medical insurance, as well as advice on managing 
everyday finances. TD Canada Trust makes banking comfortable with 
award-winning service and convenience through 24/7 mobile, internet, telephone 
and ATM banking, as well as in over 1,100 branches, with convenient hours to 
serve customers better. For more information, please visit: TD Canada Trust is the Canadian retail bank of TD Bank 
Group, the sixth largest bank in North America. 
Sheri Papps / Falan Hamilton Paradigm Public Relations 416-203-2223 / 
Sandra De Carvalho TD Bank Group 416-944-7095 
SOURCE: TD Canada Trust 
To view this news release in HTML formatting, please use the following URL: 
CO: TD Canada Trust
ST: Ontario
-0- Jan/15/2013 13:30 GMT
Press spacebar to pause and continue. Press esc to stop.