Nearly three-quarters of Canadian employees believe they are facing a less comfortable retirement than their parents, according to new research by Willis Towers Watson.
The generational divide goes even further than retirement, according to the research, with 43% of employees in their 20s struggling or currently worried about their finances, compared to 25% of employees in their 50s.
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The average age at which respondents predict they will retire is 63, but the research showed pessimism about how long retirement savings will last. A quarter (25%) of respondents said they fear their money will run out 15 years into retirement, and 47% said they think it will be gone within 25 years.
“Concerns about not having enough retirement savings continue to burden Canadian employees and confidence in retirement security has not improved over the last half decade,” said Trevor Cartlidge, a senior consulting actuary at Willis Towers Watson.
“Increasing life expectancy is also impacting retirement savings. Careful planning and financial literacy will be required for employees to optimize their retirement income and reduce the risk of outliving their savings.”
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Almost one-fifth (18%) of respondents said their financial worries are negatively affecting their life, and 38% are often worried about their current financial state. More than a quarter (27%) of respondents struggling with finances admitted that it stops them from doing their best at work.
“Canadian employees understand they need to save more for retirement but other financial priorities such as debt, housing and childcare can make saving for retirement a challenge – especially for younger employees,” said Karen Burnett, a senior retirement consultant at Willis Towers Watson.
“The good news is, employees are amenable to employers taking an active role in their health and retirement so there is a real opportunity for employers to respond.
“Analyzing different employee groups to understand characteristics such as life- stages, objectives and preferences is a good place to start. From there, employers can provide targeted communication, benefits and tools that can support their employees’ financial well-being and future retirement security.”