Canadian members rethink retirement as inflation spikes, seek advice to boost confidence and plan better
In an article provided by MFS Investment Management to Benefits and Pension Monitor, insight from the 2023 MFS Global Retirement Survey is shared.
The responses from Canadian members are categorized into three sections: market event impacts, retirement confidence, and the power of quality advice.
The retirement crisis continues to loom, with members feeling the need to save more than planned (70 percent) and work longer than planned (54 percent) due to the current environment.
“The opportunity for plan sponsors and advisors is to use this moment to educate workers on the features and potential benefits of staying invested, as well as how to get back on track and stay on track towards achieving their retirement goals,” said Jeri Savage, MFS Investment Management’s retirement lead strategist.
Members are concerned about the impact of recent market events. Record levels of inflation have caused anxiety, leading 60 percent of members to think differently about retirement. This sentiment is consistent across genders, with 58 percent of men and 62 percent of women feeling this way.
Increasing anxiety has led to lower retirement confidence among members. The survey shows that 69 percent of members are not confident in retiring at their desired age, while only 31 percent are very or extremely confident.
Top financial concerns among members include inflation, income in retirement, and market volatility. Women are primarily worried about inflation (56 percent), income in retirement (51 percent), and market volatility (39 percent).
Men's concerns are inflation (49 percent), income in retirement (49 percent), and market volatility (40 percent).
Members express a preference for in-person advice (50 percent) and are willing to use an advisor if offered by their plan (74 percent). Generational differences in seeking advice show that millennials are more likely to turn to employers (44 percent), family (35 percent), and friends (28 percent).
Boomers prefer using a financial advisor (71 percent) and their plan provider (26 percent).
Access to quality advice can significantly boost retirement confidence. Plan sponsors can enhance member confidence by providing multiple sources of advice, including financial advisors and online tools.
To address varying participant needs, plan sponsors can educate members on staying invested during market volatility, support gradual transitions into retirement, and offer comprehensive financial wellness programs. These steps can help members stay on track towards their retirement goals.
