Amid a tough job market and troubles affording homeownership, many young Canadians could be skipping on retirement planning despite fears of not having enough in their senior years, according to a new survey.

About 66 per cent of respondents aged 28 to 44 (millennials are aged 29 to 44) said they were afraid of running out of money in retirement, compared with 59 per cent of all respondents who reported the same concern, according to a study released Wednesday by the Canada Pension Plan Investment Board, which operates as CPP Investments.

Younger Canadians could be facing two major financial factors that may be exacerbating this concern, said Frank Switzer, managing director of communications at CPP Investments. Respondents aged 18 to 34 were more likely to cite other priorities such as career building (53 per cent) and homeownership (47 per cent) ahead of retirement savings, according to the report.

Average home price gains are outpacing wage growth, making it very difficult for first-time buyers to enter the market, according to a recent Re/Max Canada report.

And the weak job market for younger Canadians affects not only their earnings and ability to save but also their retirement pension.

While the overall unemployment rate remained steady at 7.1 per cent in September it edged up to 14.7 per cent among people aged 15 to 24 — the highest rate since 2010 (excluding 2020 and 2021 in the first two years of the COVID-19 pandemic), according to Statistics Canada.

The CPP federal government retirement pension is designed to substitute for about a quarter of a typical wage, Switzer said. It is a monthly, taxable benefit that is intended to supplement people’s savings to cover everyday costs in retirement. The average payment for a new retirement pension (at age 65) in July came to $848 a month, while the maximum came to $1,433 a month.

However, as contributions are tied directly to earnings, younger Canadians can’t start accumulating funds toward this benefit until they secure a job, Switzer said.

Anxiety about money also appeared to be inversely correlated to age, with more than two-thirds of Canadians aged 18 to 24 reporting that they feel “a lot of anxiety” about making the wrong financial decisions, according to the CPP Investments report. This figure declined to just 29 per cent among respondents aged 65 and older.

It is not just younger Canadians feeling the pressure.

More than half (55 per cent) of all non-retirees said they do not have a retirement plan, with the majority citing more immediate financial concerns, such as the need to earn more money or pay down debts.

The typical amount non-retirees expect they will need each year to fund their retirement also rose from $55,000 last year to $60,000 this year, according to the report, which Switzer said could be partly motivated by rising prices.

The consumer price index ticked 2.4 per cent higher year-over-year in September, up from a 1.9 per cent increase in August.

“(Canadians) are worried about inflation,” said Switzer. “That seemed to be the number one cause of people’s anxiety.”

There is also a gender gap when it comes to retirement savings and financial confidence. Nearly two-thirds of women surveyed were worried about running out of money in retirement, compared with 55 per cent of men.

“Some of the reasons for that would be systemic, including differences in lifetime earnings (due to) the impact of career breaks for caregiving, and the greater likelihood that women live longer than men,” said Switzer.

However, increased financial literacy as well as having a trusted source (such as a friend, family member, teacher or mentor) to help demystify finances can help, Switzer said.

Nearly half of respondents in the report said they had someone in their lives who played a key role in helping them understand money and retirement planning. People who reported this were more likely to say they had lower levels of financial stress and greater confidence with their retirement outlook.

• Email: slouis@postmedia.com