How to Manage Retirement Plans During Times of Economic Uncertainty

Economic uncertainty is nothing new, but with rising inflation, fluctuating markets, and global trade tensions, many Canadians are feeling more anxious than ever about their finances, job security, and retirement plans. Business leaders are also considering how to best support their employees’ financial wellness, particularly when it comes to retirement planning.

The Impact of Economic Uncertainty on Retirement Planning

Saving for retirement is already tougher today than ever before. Market volatility can be unsettling, especially for those nearing retirement. It’s natural to wonder how to keep retirement plans on track when the financial road ahead feels anything but smooth. However, history shows that while every economic downturn is different, the core strategies for managing retirement plans remain strong. Instead of viewing this as the end of the road, think of it as a bump along the way.

How much someone should worry, and what steps they can take, depend on their current stage of retirement planning and investment strategy. If someone is just a few years away from retirement, it might be time to revisit their timeline and consider staying flexible. It might be worth having a conversation with an employer to explore options. For those managing RRSPs or other investments, regular portfolio assessments are important, especially for those approaching retirement. Staying proactive about a financial strategy can help someone make informed decisions and stay on track toward retirement goals, even when the market feels unpredictable.

Financial Stress and Employee Wellness

Employees who are worried about their retirement savings and overall financial stability may experience heightened anxiety, reduced focus, and decreased productivity. In times of economic uncertainty, helping employees feel secure about their financial futures is both a compassionate and strategic approach for businesses.

Financial stress is already taking a toll on Canadian workplaces, with nearly half of employees losing sleep over money worries and many citing finances as their top stressor. Rising costs, stagnant wages, and mounting debt are leading to increased anxiety, depression, and burnout. This stress affects productivity, with employees spending an average of 8.2 work hours each week worrying about finances. Employers can help by offering comprehensive benefits like financial wellness programs, mental health services, and Employee Assistance Programs (EAPs) to support their teams’ financial and mental well-being, not just during difficult times but all year round.

How Employers Can Provide Support

Here are a few ways business leaders can support their teams during times of economic uncertainty:

• Communicate clearly and often. One survey suggests that 7 in 10 employees view their employer as a trusted source for retirement-related information and advice. Employees need to hear from leadership regularly. Share updates on the company’s financial health, explain how market changes might affect retirement plans, and offer reassurance where possible. For example, if your company matches RRSP contributions, remind employees of this benefit and how it can support the growth of their retirement savings over time. Regularly share balanced, reassuring messages about financial wellness. Be transparent about the market situation while promoting a focus on long-term strategies over short-term reactions.
  
• Provide financial education. Some employees may not understand how retirement savings work, especially during volatile times. Providing employees with access to financial advisors, educational workshops, or online resources can help them make informed decisions about their retirement plans. Hosting workshops or sessions with financial advisors or offering access to financial planning tools can also help improve the financial literacy of your team members. One report shows that companies that invest in financial literacy for their employees see, on average, a 15 per cent increase in productivity and a 10 per cent decrease in absenteeism. Consider offering lunch-and-learn sessions on topics like budgeting, debt management and retirement planning. Share credible resources with your employees that can help them stay informed without feeling overwhelmed by market noise.
  
• Offer flexible solutions. Employers are increasingly adding or improving financial well-being programs to improve employee satisfaction and retention. Consider providing options like allowing employees to adjust their contributions or offering short-term financial support programs.

Focus on the bigger picture

Now is not the time for hasty decisions driven by market uncertainty. Instead, focus on data-driven strategies that align with your company’s long-term goals.

Encourage your team to stay the course. Impulsive reactions to market changes can often do more harm than good. A thoughtful, strategic approach to employee well-being helps build a more stable and confident workplace.

Contact us today so we can help you make informed decisions that support your team and your organization’s success.

Suggested Reading

The Cost of Financial Stress in the Workplace

How Employers Can Help Employees Avoid Retirement Regrets

Additional Resources

Government of Canada: Retirement Planning Tools

Financial Consumer Agency of Canada – Retirement Planning