Nearly two-thirds (62 per cent) of Canadian employees would be willing to pay more out of their paycheque in order to receive a more generous retirement benefit, according to a survey by Willis Towers Watson.
The survey, which polled more than 2,000 Canadian employees, found a slightly higher number (65 per cent) would be willing to pay more in order to receive a pension that was guaranteed for life.
Employees’ willingness to pay for superior retirement benefits is evident across all age groups, with 71 per cent of baby boomers, 65 per cent of Generation X and 56 per cent of Generation Y reporting they would pay a higher amount out of their pay each month to ensure a guaranteed retirement benefit.
“Canadian workers remain concerned about their retirement financial stability,” said Karen Burnett, senior retirement consultant at Willis Towers Watson. “Some will be fortunate and inherit wealth from their ageing parents. Others may need to overcome inadequate savings by selling assets such as their homes before they would otherwise prefer. For many, however, the default option will be to work longer.”
The survey also found 26 per cent of respondents believe they will need to delay their retirement past age 65, with 32 per cent saying they anticipate retiring later than they had previously planned. Overall, 13 per cent believe they’ll have to work past age 70 to live comfortably in retirement, and another three per cent don’t think they’ll ever be able to retire.
More than half (54 per cent) of those who expect to retire after age 70 have above average stress levels, compared to 30 per cent of those expecting to retire before 65. For those who expect to retire after age 70, less than half (46 per cent) say they’re in good health, while 61 per cent of those who expect to retire before age 65 said the same. Additionally, 36 per cent of employees who expect to work past age 70 feel they’re stuck in their jobs, compared to a quarter (27 per cent) of those who anticipate retiring before age 65.
“Many workers are counting on their employer’s retirement plan as their primary way to save for retirement, while dealing with other, competing financial priorities such as mortgages and consumer debt repayment,” said Trevor Cartlidge, senior retirement consultant at Willis Towers Watson.
“Considering these multiple pressures, employers should take care to ensure that their benefit programs are calibrated to meet changing financial needs, and support employee understanding about the savings required and costs in retirement.”