Financial advice wanted as Canadians struggle to save for retirement: report

Almost half hope to retire by 65 – but cost of living a big challenge

Financial advice wanted as Canadians struggle to save for retirement: report

Many Canadians are not saving enough for retirement, largely due to the current state of cost of living – so what does that mean for HR in supporting employees?

Overall, 46% of non-retired Canadians prioritize spending on their current lifestyle in place of saving for retirement, mainly due to paying off debts (38%) or preferring to enjoy their life now (18%), reports IG Wealth Management.

Four-fifths (80%) of respondents say the rising cost of living makes it difficult to save for retirement, while over half (56%) have put off saving due to financial pressures.

Overall, non-retired Canadians allocate just 12% of their income for retirement. They spend 67% on basic living expenses and 20% on leisure activities.

When are people planning to retire?

Despite Canadians not prioritizing retirement savings, they still hope to have fun post-employment, according to IG Wealth Management’s survey of over 1,500 Canadian adults, conducted in December 2024.

Overall, 47% expect to retire before the age of 65. Also, two-fifths (38%) of respondents hope to prioritize travel in retirement and one-third (33%) plan to focus on hobbies and interests after their employment years.

For many, however, prioritizing travel and hobbies in retirement is not possible without them putting in more work.

In fact, one-third of non-retired Canadians anticipate working later to afford basic living expenses, supplement income, or maintain social connections. Meanwhile, 17% envision working part-time or consulting later on in their life.

Financial advice appreciated

As things stand, Canadians recognize the importance of having a financial advisor.

The majority of employees state that their advisor helps them balance enjoying life today while saving for retirement (76%) and personalize advice to match their needs (91%).

"No two retirements are alike. With help from a financial advisor, Canadians can build a personalized retirement plan tailored to their unique needs to help manage today's financial pressures with their desired retirement lifestyle," says Christine Van Cauwenberghe, head of financial planning at IG Wealth Management.

Over 6 in 10 (61%) Canadians fear running out of money in retirement, CPP Investments previously reported.

How to encourage workers to save for retirement

Here are some strategies for creating a retirement-ready workforce, according to financial wellbeing platform provider Mintago:

  1. Assess employee retirement readiness.
  2. Develop retirement education programs.
  3. Implement proactive savings initiatives.
  4. Prioritize health and wellbeing programs.
  5. Monitor and adjust retirement strategies.

“Prioritizing retirement readiness is vital for both you and your people,” says the company.  “By adopting these simple strategies, you can empower your employees to enjoy a more fulfilling retirement, while helping to boost their loyalty to your business and productivity in the workplace. Indeed, building a retirement-ready workforce should be seen as a valuable investment in the future, for you and your team.”

Experts at Gallagher also note that the aging workforce presents “an opportunity” for employers to set forth a plan that both supports employees in preparing for retirement and develops future leaders through deliberate succession planning.

“Organizational readiness mandates a diligent approach to helping employees in all generations financially plan for retirement, mentoring and growing them along a clearly defined career path, and laying the framework for them to eventually become corporate elders and serve as brand ambassadors,” say Tom Belmont Jr., U.S. Health & Benefits practice leader; Lauren Bump, area executive vice president, Retirement Plan Consulting; Alan Markfeld, national practice leader, Investment Advisory; and Chad Roedder, senior principal consultant, Leadership & Organizational Development.

“Coordinating resources for employees in an easy-to-access and easy-to-use format is key to communicating and executing the organization's readiness strategy. And by helping employees prepare for retirement, employers help ensure a smooth transition of knowledge and skills from retiring employees to their successors. Organizations that do this well will get the best out of their best asset – their people.”

Many Canadians are anxious about their financial situation, according to a previous report.