Millennials who rent will have to save 50% more than homeowners to retire: report
Millennials who rent for their entire careers versus millennials who own property will have to save different amounts forhas found that Canadian millennials, between 27 and 42 years old, must save 50 per cent more if they rent, than millennials who are homeowners.
In order to achieve a “reasonable income in retirement”, the report found a millennial who rents for their entire career would need to save eight times their salary in order feel ready to retire at age 68. However, if that same millennial owned their home, they would only need to save 5.25 times their salary in order to feel ready to retire at age 65.Story continues below advertisement
“Homeownership also gives retirees flexibility, as retirees who downsize may be able to access a significant amount of money. Renters, conversely, must pay rent every month or face eviction – whether they are 25 years old or 85 years old.”However, especially in Vancouver, the cost of living continues to rise and housing affordability continues to decline so many residents are forced to rent, making homeownership even more unaffordable if they are not able to save money every month.
“The overall ability to have a home in retirement is equity,” Jillian Kennedy with Mercer Canada told Global News.“It also provides a level of flexibility to that person in retirement that a renter would not have. I want you to think about things like being able to sell the home and downsize, potentially being able to do reverse mortgages, rent out basements.”
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