Retirement too many not ready

 There’s a global issue concerning retirement – too many workers approaching retirement age are just not ready.

A new report calls for employers to help address the problem as part of a ‘social contract with governments and individuals to help avoid retirement panic.

The report from the Aegon Center for Longevity and Retirement (ACLR) says that, globally, workers expect to need 67% of their current income in retirement but just 25% believe they are on course to meet this (35% in Canada).

Although 42% of Canadian respondents said that they always make sure they save for retirement, 26% only save occasionally and 15% said they don’t save enough but intend to. Only 4% have never saved for retirement and don’t intend to.

Compared to the United States though, Canadians are lagging. In the US, 57% of respondents said they always save for retirement.

Canada scores higher than many of its peers among respondents who said that planning for their financial future was a top priority right now; 54% said that, ranking third behind the 65% who prioritized “being healthy” and the 63% who said “enjoying life.”

The top reason cited for not saving enough for retirement is not earning enough (36%) followed by focusing on paying down debt (32%) and saving for immediate priorities such as home purchase (21%).

A lack of confidence in the performance of the investment markets (11%) and lack of access to professional financial advice (9%) also featured.

Age-friendly employers

The report calls for increased collaboration to boost retirement readiness globally.

This includes employers cultivating age-friendly workplaces with multigenerational workforces and strong financial and wellbeing programs.

 "As the employer-employee relationship evolves, the role of employers in helping workers prepare for retirement extends beyond offering retirement plans and financial benefits – employers also influence workers' skills development, education, and overall well-being," said Steven Cameron, Pensions Director at Aegon.

The survey reveals that Canadians are open to auto enrolment with employers deducting a percentage of their wages for retirement saving – a net 72% said this was appealing to some degree.

Asked how they would like to receive their retirement savings on retirement, 44% said a regular income was preferred with just 14% opting for a lump sum, and 13% choosing a mixture of lump sum and regular income.