More than six in 10 Canadian employees would be willing to pay more out of their paycheques to receive a more generous retirement benefit, according to a recent survey.
Run by Willis Towers Watson, the survey found that 62% of Canadians would be willing to pay more for a bigger retirement benefit, and 65% would be willing to pay more to receive a pension that was guaranteed for life. About one in four (26%) believed they would have to delay retirement beyond age 65, while 32% anticipated retiring later than they had planned. Thirteen per cent think they’ll have to work past age 70 in order to retire comfortably, and 3% said they didn’t think they’d ever be able to retire.
“Canadian workers remain concerned about their retirement financial stability,” said Karen Burnett, senior retirement consultant at Willis Towers Watson. “Some will be fortunate and inherit wealth from their ageing parents. Others may need to overcome inadequate savings by selling assets such as their homes before they would otherwise prefer. For many, however, the default option will be to work longer.”
That’s bad news; the survey also found that employees who expect to work longer are less healthy, more stressed and more likely to feel trapped in their jobs than those who expect to retire earlier. The survey found that 54% of employees who expected to retire after the age of 70 had above-average stress levels, while only 30% of those expecting to retire before 65 did. Less than half of those expecting to retire after 70 said they were in very good health, while nearly two-thirds of those who expect to retire before 65 said they were.
“Many workers are counting on their employer's retirement plan as their primary way to save for retirement, while dealing with other, competing financial priorities such as mortgages and consumer debt repayment,” said Trevor Cartlidge, senior retirement consultant at Willis Towers Watson. “Considering these multiple pressures, employers should take care to ensure that their benefit programs are calibrated to meet changing financial needs, and support employee understanding about the savings required and costs in retirement.”
Senior investors urged to look beyond low-interest rate approach
Canadian baby boomers to inherit $750 billion over next decade