Why Late-Career Employees Are Delaying Retirement and How Employers Can Help

More Canadians are working longer than they planned, and employers need to respond to delayed retirement with care.

More than one in five Canadian workers are over the age of 55. That’s a significant difference compared to where we were a generation ago, when seeing someone work into their 60s or 70s would have been unusual. In 2000, only 12.6 per cent of the workforce was over 55. Today, it’s more than 21.6 per cent.

Many of these older workers aren’t staying in the workforce because they want to. They’re doing it because they have to. One survey found that more than half of Canadians say they’re behind on retirement savings. Even more, 61 per cent, are worried they’ll run out of money once they stop working.

As retirement gets harder to reach, many employees need more support to get there.

Consider Phased Retirement

Not everyone wants to stop working cold turkey. Some individuals would prefer to slow down gradually, maybe reduce their hours, transition into a mentoring role, or work on fewer projects. Phased retirement gives employees that option, and it can be a win-win. The company retains their institutional knowledge, and employees have time to prepare, both emotionally and financially, for their next chapter.

According to a survey by the Canadian Payroll Association, a lot of Canadians aren’t saving enough for retirement. That’s one reason why phased retirement is becoming more appealing. It gives employees a chance to keep earning, keep saving, and hang on to their workplace benefits a little longer. It can also make things easier for employers, leading to smoother transitions, stronger succession planning, and less stress all around.

Offer Financial Planning Support

Everyone enters retirement from a different starting line. Financial literacy also varies, and retirement planning can be complicated when you factor in things like the Canada Pension Plan, RRSP withdrawals, OAS eligibility, and TFSA strategies. It’s one thing to know you should be saving more for retirement, but it’s another thing to know how.

Giving employees access to financial literacy resources or financial advisors through your benefits offerings can go a long way. It doesn’t need to be expensive, and it could make a difference for someone who’s anxious about whether they can afford to retire at all.

Don’t Overlook Mental Health

Money is just one part of the retirement equation. There’s also the emotional side around uncertainty about identity, purpose, and what life looks like without the structure of work.

A quarter of employees say financial stress lowers their productivity at work, and they spend an average of 8.2 hours during work time stressing about finances, which could equate to a part-time job. Also, two-thirds of human resources professionals agree financially stressed employees perform worse at work.

Employees who are distracted by financial burdens tend to be less focused, less engaged and less productive. They could even start looking for another job with higher pay or better benefits. This is a trend that could lead to high turnover rates, which is a costly issue for any employer.

An Employee Assistance Program (EAP) and mental health benefits can help. If you offer counselling or coaching support, consider promoting those resources specifically to late-career employees. Even a single conversation can ease some of the fear and help employees start planning their transition with more clarity.

Small Actions, Big Impact

Your older workers may have spent years or even decades contributing to your organization. Supporting them at this stage in their journey is smart HR as much as it is the right thing to do.  Small steps can help your people leave work on their terms, whether it’s phased retirement, financial advice or mental health support. That kind of care and planning also reflects well on your culture.

Contact us today so we can work together to strengthen your benefits offerings for your team.

Suggested Reading

The Cost of Financial Stress in the Workplace