With a record number of Canadians nearing retirement, employers can support workers through retirement planning initiatives and education, says one expert.
According to a report released last week by Statistics Canada, more than a fifth (22 per cent) of Canadian employees are aged 55 to 64. It also found more Canadians are aged 55 to 64 than young adults aged 15 to 24, the ages at which individuals typically enter the labour market. In 2021, there were 81 persons aged 15 to 24 per 100 persons aged 55 to 64, while in 1966, there were more than 200 persons aged 15 to 24 per 100 persons aged 55 to 64.
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Bonnie-Jeanne MacDonald, director of financial security research for the National Institute on Ageing at Toronto Metropolitan University (formerly Ryerson University), says employers can help their employees by providing ways for them to pool their savings and by making employees more aware they can delay their Canada Pension Plan benefits.
“Only one per cent of Canadians [delay their CPP benefits] and it’s really the best decumulation strategy you can do. You have the option to take your CPP anywhere between 60 and 70. [By] waiting until age 70, [you can] more than double CPP, but 95 per cent of Canadians take it at 65. . . . We’re at a situation where [almost] a quarter of Canada’s population is now on the brink of retirement. They’re facing a very different situation than retirees have in the past, because a lot of them are going to be [retiring] without a pension plan and post-retirement benefits have declined all around.”
MacDonald says employers will also have to contend with the impact of more employees providing care for elderly parents, leading to higher levels of emotional and financial stress. She says employers can provide additional support services for employees who are taking care of elderly family members.
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Given the large amount of upcoming retirees, it’s also important for employers to have a transition plan in place, says MacDonald, noting people often retire due to factors such as health issues or family emergencies and employers can have a hard time facilitating a knowledge transfer.
“I think over the next five years, there’s going to be a major exodus from the labour force, so we’ll need to fill that knowledge gap.”