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Two-thirds of Canadians are questioning how much retirement savings they will need
Corporate / Pension/Retirement / Canada

Two-thirds of Canadians are questioning how much retirement savings they will need

LifeWorks Financial Wellbeing Index™ reveals 30 per cent of Canadians believe their employer pension plan will be the primary source of retirement income

LifeWorks, a leading provider of digital and in-person total wellbeing solutions, today released its quarterly Financial Wellbeing Index™. The report showed that 23 per cent of Canadians do not know and 44 per cent are unsure about how much retirement savings they will need to maintain their desired standard of living. Furthermore, 29 per cent of Canadians believe their employer pension plan will be the primary source of their retirement income, and 15 per cent expect their primary source of retirement income to come from government plan(s).

This quarter’s report revealed a continued negative financial wellbeing score among Canadians compared to the pre-pandemic benchmark of 0.0.

  • The Financial Wellbeing Index™ score for winter 2022 is -2.4, a slight decline from the fall 2021 score of -2.3.

Many Canadians feel unprepared for retirement and anticipate relying on workplace benefits for support

  • Thirty-four per cent of Canadians do not know what percentage of their pre-retirement income they will need to live comfortably in retirement.
  • Women are 50 per cent more likely than men to indicate they do not know how much of their pre-retirement income is needed to live comfortably in retirement.
  • The 23 per cent of Canadians who do not know of how much retirement savings they will need to maintain their desired standard of living have a financial wellbeing score of -13.0, more than 10 points below the national average.
  • Fifty-three per cent of Canadians most value a guaranteed monthly pension on retirement, followed by 34 per cent who most value a retirement savings program with a contribution from their employer.

Comments from president, retirement and financial solutions and executive vice president, Idan Shlesinger
“Almost half of Canadians are looking to either their employer or government as their primary income support during retirement. Additionally, the majority do not know how much they need. Looking at this together, Canadians are trusting that their retirement income needs will be met. It is clear that specific planning is required. Both governments and employers are in a good position to support such planning.”

Comments from global leader and senior vice president, research and total wellbeing, Paula Allen
“It is interesting to note that more than half of the survey respondents answered incorrectly on basic knowledge questions. Not surprisingly, answering incorrectly or being unsure of one’s responses was correlated with lower overall financial wellbeing. There are likely many assumptions that people are making about tax-free savings accounts and mortgage terms, and this foundational knowledge needs to be addressed.”

The full LifeWorks Financial Wellbeing Index™ report can be found here. This quarter, the report includes additional insights on Canadians’ financial knowledge of mortgages, debt and savings, as well as whether or not they have a will.

About the Financial Wellbeing Index™
The Financial Wellbeing Index™ by LifeWorks was conducted through an online survey in English and French from March 3 to March 20, 2022, with 3,000 respondents in Canada. All respondents reside in Canada and were employed within the last six months. The data has been statistically weighted to ensure the regional and gender composition of the sample reflect this population. The Financial Wellbeing Index™ is published quarterly, beginning January 2021, and compares against benchmark data collected in 2019.

About LifeWorks
LifeWorks is a world leader in providing digital and in-person solutions that support the total wellbeing of individuals. We deliver a personalized continuum of care that helps our clients improve the lives of their people and by doing so, improve their business.

ID-CAD, ID-CORP, ID-RS

Heather MacDonald
LifeWorks
media@lifeworks.com
1.855.622.3327

Jennifer Farr
Kaiser & Partners
jennifer.farr@kaiserpartners.com
1.416.910.5221

Source: LifeWorks