Canadians struggle with retirement savings - Manulife

Canadians struggle with retirement savings – Manulife | Insurance Business Canada

Life & Health

Canadians struggle with retirement savings – Manulife

Find out what’s impacting financial resilience and future planning

Life & Health

By
Rod Bolivar

Manulife has released its latest Financial Resilience and Longevity Report, providing insights into the financial challenges faced by Canadian workers and retirees.

Based on its fourth annual survey, the report compares the financial status of different generations, revealing that Baby Boomers are generally better off than Gen Xers and Millennials/Gen Z workers.

The survey also explores the financial situations of Canadian retirees, highlighting significant differences depending on whether they retired as planned or earlier than expected.

The report emphasizes the importance of financial resilience during working years to prepare for longer life expectancy, which now averages over 80 years in Canada.

Financial resilience is defined as the ability to manage debt, healthcare costs, and emergencies, allowing workers to save more for retirement. However, many struggle to achieve this resilience. The report found that nearly half of retirees (47%) left the workforce earlier than planned, extending their retirement years and limiting their savings period.

The survey results also show that personal finances remain strained for many Canadian workers. While 41% described their financial situation as “fair” or “poor”, only 19% rated it as “very good” or “excellent”. Debt remains a concern, with over half of respondents acknowledging it as a problem, and 32% expressing concern about their emergency savings. Gen X workers reported the most financial challenges, with 60% citing debt as a major issue.

Retirement preparation also lags, with 50% of workers stating they are behind in saving for retirement. Additionally, one in three workers do not know where they stand in terms of savings, and 34% worry about having insufficient funds for retirement.

Workers with a financial advisor or a formal retirement plan reported better financial health and higher readiness for retirement, according to the report.

The survey highlights that access to financial advisors and retirement planning resources could improve workers’ financial preparedness. More than half of respondents expressed interest in financial management support from employers, particularly if it is provided at no cost.

As Canadians face longer retirements, how can they ensure their financial resilience and preparedness? Share your thoughts in the comments.