New data shows most workers lack clear income targets and risk planning for retirement
More than half of non-retired Canadians feel negative about retirement and doubt they can afford to stop working, according to IG Wealth Management’s latest annual retirement study.
According to IG Wealth Management, the erosion of traditional workplace pensions has pushed far more responsibility onto individuals, and many are not ready for it.
Less than half (48 percent) of non‑retirees have any workplace pension plan at all, whether defined benefit (DB) or defined contribution (DC).
Around 30 years after large employers began phasing out DB pensions, today’s workers approach retirement with far less guaranteed income than previous generations.
The study, conducted with Pollara Strategic Insights, shows limited planning even among those who are still working.
Only one‑third (33 percent) of non‑retired Canadians have both a retirement plan and savings.
Just 11 percent know how much annual income they will need in retirement, while about half (49 percent) say they do not know at all.
A quarter of employer pension holders do not know the details of their plan, including whether it is DB or DC.
“The decline of defined benefit and contribution pension plans has fundamentally shifted the burden of retirement planning on to individuals in recent years,” said Christine Van Cauwenberghe, head of financial planning at IG Wealth Management.
She said their data shows that while Canadians recognize this shift and the need to build a “personal pension plan,” many still do not know how much to save or how to turn those savings into income, making disciplined, personalized planning with professional advice essential for retirement readiness.
The knowledge gaps extend to key retirement income tools and tax treatment.
Only two‑fifths of respondents say they understand Old Age Security (OAS), a Registered Retirement Income Fund (RRIF), or how retirement income is taxed.
Few have built inflation, health‑care costs, market downturns, or longevity risk into their plans, and more than two‑thirds (67 percent) have not stress‑tested their retirement plan against any major economic or financial risk.
This lack of clarity feeds into mounting emotional strain.
The study reports that 53 percent of non‑retired Canadians express negative feelings about retirement, saying they are behind on savings and unsure they will be able to afford to retire.
“This growing pessimism not only reflects their financial uncertainty but also creates a cycle of inaction, as anxiety becomes a major barrier to take meaningful steps toward improving their retirement outlook,” observed Van Cauwenberghe.
Despite these gaps and concerns, only about one third (36 percent) of Canadians currently work with a financial advisor.
Among those who do, large majorities say their advisor helps optimize their retirement plan (87 percent), educates them on financial risks (83 percent), coaches them toward their goals (82 percent), and keeps them on track (84 percent).
Van Cauwenberghe says advisors can help people build retirement plans that factor in taxes, longevity, income sources and risk – areas many struggle to manage on their own.
In a world without guaranteed pensions, she believes professional advice is one of the strongest tools Canadians have.
