Willis Towers Watson survey also reveals one-third of Canadians anticipate retiring later than previously planned
Toronto, ON (June 14, 2016) – Despite some improvement in their financial situation and retirement confidence, more than six in 10 Canadian employees (62%) would be willing to pay more out of their paychecks in order to receive a more generous retirement benefit, according to a survey by Willis Towers Watson (NASDAQ: WLTW), a leading global advisory, broking and solutions company. A slightly higher number (65%) would be willing to pay more in order to receive a pension that was guaranteed for life.
The Global Benefits Attitudes Survey of more than 2,000 Canadian employees found that roughly one in four (26%) believe they will need to delay their retirement past age 65, with nearly one-third (32%) anticipating retiring later than previously planned. Overall, 13% believe they’ll have to work past age 70 to live comfortably in retirement; another 3% don’t think they’ll ever be able to retire.
“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 results caution, however, that employees who expect to work longer are less healthy, more stressed and more likely to feel stuck in their jobs than those who expect to retire earlier. According to the survey, 54% of employees expecting to retire after age 70 have above average stress levels, compared with 30% of those expecting to retire before 65. For those planning to retire after age 70, less than half (46%) say they are in very good health, while nearly two-thirds (61%) of those who expect to retire before age 65 state they are in very good health. Additionally, 36% of employees planning to work past 70 feel they are stuck in their jobs, compared with just a quarter of those who anticipate retiring before 65 (27%).
“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. 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,” said Trevor Cartlidge, senior retirement consultant at Willis Towers Watson.
Among other survey findings:
- Willingness to pay for superior retirement benefits crosses all age groups, with 71% of Boomers, 65% of Gen X and 56% of Gen Y reporting that they would be willing to pay a higher amount out of their pay each month to ensure a guaranteed retirement benefit.
- Two-thirds of Canadian employees (67%) would rather receive a guaranteed pension for life than a fund to invest, but which might run out (20%).
- Even though a majority of Canadians expect to retire by age 65, almost two-fifths (38%) believe there is more than a 50% chance they will need to work until age 70.
- 74% of survey respondents believe they will have a less comfortable retirement than their parent’s generation.
About the survey
The Willis Towers Watson 2015 Global Benefits Attitudes Survey measured attitudes of over 30,000 nongovernmental, private sector employees in 19 countries. A total 2,013 Canadian workers participated in the survey, which was conducted between June and August 2015. Results are based on full-time employees who are members of a retirement plan.
About Willis Towers Watson
Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 39,000 employees in more than 120 countries. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas – the dynamic formula that drives business performance. Together, we unlock potential. Learn more at willistowerswatson.com.
Source: Willis Towers Watson