One in six of your employees plan to work into their 70s, with few plans to save for retirement
A significant number of working Canadians plan to work longer than current retirees did during their careers, which may be an indication of changing expectations of health and finances.
The recent survey by TD Bank Financial Group found about two-thirds (64%) of working Canadians expect to retire in their 60s; 28% in their early 60s; and 36% after 65. Sixteen per cent think they will keep working into their 70s. This is later in life than current retirees, who said they left the full-time workforce in their late 50s (36%) or early 60s (25%), with only three per cent working into their 70s.
The poll also found that 15% of working Canadians only plan to save for retirement for less than five years before leaving the workforce. By comparison, more than two-thirds (69 per cent) of retirees said, in hindsight, they should have saved for retirement for 25 years or more, found the survey of 1,251 working Canadians and 929 retired Canadians.
"If working Canadians don't make retirement savings a priority, day-to-day expenses and more immediate financial needs can pre-empt saving for the future. Don't get caught 30 years from now saying 'I wish I had started saving sooner,'" said Kim Parlee, vice-president, TD Wealth Management.
There were two key messages for employers. One is the increasingly important role that older workers will play in the workforce, which will require companies to focus on their needs, including increased accessibility requirements and different health needs.
The second important point was the changes companies need to make to focus on recruitment and retention of older workers.
“[Employees] are asking more and more about pension plans,” Kevin McFadden, President of Sigurdson McFadden Benefits & Pensions said. “It is a competitive marketplace for quality employees and that’s only going to continue to increase so I don’t see this topic as going anywhere except higher on the priority list of employers.”
The main motivation behind most employers’ pension funds was to attract and retain employees, but it was also important for companies to maintain a turnover of staff. As older employees reached retirement age, they may choose to keep working if they are not adequately prepared for retirement.
“Due to age or health reasons their productivity may be lower so another reason to make sure your employees are prepared for retirement is to recognize that there will come a time when more productive employees should be taking over,” McFadden said.