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- 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 save."

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.

SOURCE: TD Canada Trust

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