Canada needs better retirement readiness

By The IJ Staff | February 12 2020 11:00AM

Photo: Freepik

The National Institute on Ageing (NIA) says Canada needs to have a serious conversation about its retirement readiness and has outlined a number of priorities it would like the government to consider to improve retirement prospects for Canadians.

In a newly released paper entitled Improving Canada's Retirement Income System: A Discussion Paper for Setting Priorities, authors Keith Ambachtsheer and Michael Nicin identify the key challenges and opportunities to retirement and suggest ways to improve retirement prospects.

Need to look at financial aspects of ageing

Ambachtsheer says Canadians are not setting aside enough money for retirement, which is getting more expensive and harder to achieve. “As Canada continues to age, it is increasingly important to understand and address the financial consequences of this ageing in a deliberate, informed manner,” he says.

The paper outlines three broad priorities: 1) Increase pension coverage for Canadians without a pension plan; 2) Increase savings rates for middle-income earners; 3) Increase incentives and opportunities for people to work at older ages, as life expectancy increases.

Personal financial uncertainty prevails

"It is becoming increasingly evident that the traditional life course milestones of getting an education, finding meaningful employment with a high certainty of belonging to a workplace pension plan, and counting on a well-deserved retirement are fading away," said Nicin. "Personal financial uncertainty now prevails for many Canadians. Enhancements to the Canada Pension Plan were important, but there's more work to do."

The NIA says the country should move forward with immediate action to raise the level of innovation in Canada’s retirement income system (RIS) in the coming years.

It says Canada is not short on talented people thinking about and researching RIS questions and good ideas that gain broad acceptance should be put into practice. Unfortunately, that hasn’t worked as well as it could in Canada so far.

“Canada’s retirement income system has many good features but also has a number of remaining challenges. The NIA is prepared to do its part to address these remaining challenges in the years ahead.”

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