Global report from pensions and life insurance firm Aegon calls for a new 'social contract' with age-friendly employers
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.
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.
The report was produced in collaboration with nonprofits Transamerica Center for Retirement Studies (TCRS) and Instituto de Longevidade Mongeral Aegon.
“The New Social Contract: Age-Friendly Employers”, examines the vital role #employers play in helping their employees achieve a financially secure #retirement. Read more here: https://t.co/n5FHRxj8tO Stay tuned for more facts and figures! #InsideAegon #RetirementPlanning pic.twitter.com/XGb9hx0noQ— Aegon (@Aegon)