Just 2 in 5 workers have set goal for retirement savings: Survey

Canadian workers who participate in capital accumulation plans (CAPs) such as defined contribution pension plans (DC) and group registered retirement savings plans (RRSP) are confident about the state of their finances and say they understand money matters — but many find it hard to save for retirement and are worried about having enough money to retire.

That’s according to the Global DC and Financial Wellbeing Employee Survey by Aon, a professional services firm providing risk, retirement and health solutions.

Fewer than half of employees have a goal for retirement savings and many might find their current plan contribution levels are inadequate to ensure their total income needs in retirement, found the survey of 1,003 workers.

“The good news is that the employees in our survey identified saving for retirement as a top priority and participation rates in workplace retirement plans are high, but we also found that workers are having real challenges being able to afford to save more,” said Rosalind Gilbert, one of the report’s authors and an associate partner at Aon’s Vancouver office.

“An even more fundamental issue, however, is the lack of planning and knowledge around retirement savings and income — which is a big call to action for employers, who need to do more to educate members, provide access to financial services and equip them with holistic strategies for retirement readiness.”

Key findings:

• Only two in five workers have set a goal for retirement savings, and almost half say outstanding debts are preventing them from saving for retirement.
• Of those who expect to fully retire, two-thirds expect to do so by age 66, but 30 per cent expect to continue working forever.
• Two in five who are in employer-matching plans are not taking full advantage of employer-matching contributions.
• Most employees are contributing less than 10 per cent of their salary to their CAPs.