Retirement Ready? Why Most Canadians Say ‘No’

The journey to retirement may seem like a slow-moving river, but before you know it, you’re navigating those final rapids. To ensure a smooth journey through these challenging waters, it’s essential to prepare for retirement well in advance, while you still have time to enjoy the ride. Retirement, after all, is a big milestone that should ideally be enjoyed with financial security and peace of mind. The reality is, however, that a concerning number of Canadians aren’t prepared. 

Retirement Reality Check

A new H&R Block survey suggests half of Canadians feel they won’t be able to retire because they’re unable to save enough money at the end of every month. In fact, one survey finds nearly half of Canadian pre-retirees have less than $5,000 in savings. 

Saving for retirement is becoming increasingly challenging for a number of reasons. The cost of living in Canada has steadily been on the rise, from housing to everyday expenses. Many young Canadians are living beyond their means, and those close to retirement are falling behind. Finding the extra cash to stash away for retirement these days can feel like trying to catch a shooting star.

The pandemic also had a profound impact on many Canadians’ finances. Job losses, reduced incomes, and unexpected expenses created setbacks in retirement savings plans. Many individuals are also grappling with student loans, credit card debt, and mortgages. 

Also, with Canadians living longer, the retirement nest egg needs to stretch further, and this means saving more for an extended period. Given these challenges, it’s no wonder why Canadians are worried about their retirement readiness. This is where employers can step in, to serve an important role in helping employees prepare for their golden years.

Empowering Your Team’s Financial Future

Here are three ways employers can not only encourage retirement savings, but also demonstrate that they care about their employees’ long-term financial success:

• RRSP Matching Contributions: Offer an RRSP plan with a matching contribution. For every dollar an employee contributes, match a portion, up to a certain percentage of the employee’s salary, providing an immediate boost to the employee’s fund.
  
• Automatic Enrollment: Make it easy for new employees to start saving by implementing automatic enrollment. Consider automatic increases in contributions, which will gradually increase their savings without taking a noticeable hit to a paycheque. 
  
• Resources: A new report finds employers may be forgetting to communicate their retirement benefits to employees, putting employee engagement and loyalty at risk. Beyond the initial onboarding process, employers have a unique opportunity to support their workforce in retirement planning by providing ongoing educational resources, such as webinars, or access to financial advisors, to help employees navigate the complexities of retirement savings. The more informed employees are, the more confident they can become in their financial decisions. 

We Can Help

The road to retirement readiness in Canada may be paved with challenges, but it’s not impossible to navigate. Contact us so we can work together to strengthen your retirement offerings, helping your employees take control, build a brighter financial future, and enjoy the scenery along the way.

Suggested Readings

Employers neglecting to communicate retirement benefits: report

More than half of Canadians aren’t saving enough money for retirement: survey

Additional Resources

Retirement Ready Quiz: Government of Canada

2023 Canadian Retirement Survey: Healthcare of Ontario Pension Plan (HOOPP)