Financial challenges continue for Canadian workers as retirees navigate longer-than-expected retirements
Manulife's latest Financial Resilience and Longevity Report highlights that Baby Boomers are generally in a stronger financial position compared to Gen Xers and Gen Z/Millennials.
Additionally, almost half of the retirees (47 percent) exited the workforce earlier than expected, shortening their savings period.
Aimee DeCamillo, global head of Retirement at Manulife Investment Management, emphasized the need for Canadians to plan for longer retirements, stating, “With life expectancy over 80, Canadians must now plan for how they'll live and fund two or even three decades of retirement.”
The report focuses on the implications of longer life expectancy and suggests ways to enhance financial resilience during working years, which can help individuals save more for retirement.
Workers' financial resilience, defined as the ability to manage challenges like debt, healthcare costs, and emergencies, affects their retirement savings capacity.
Survey findings reveal that 41 percent of workers describe their financial situation as fair or poor, and over half report debt as a significant issue, particularly Gen Xers, with 60 percent struggling with debt.
Despite economic improvements since April 2023, 34 percent of workers worry about insufficient retirement savings, and only 33 percent have a formal retirement plan.
The report suggests that workers with a financial advisor or comprehensive retirement plan are more likely to feel financially stable. Employers could play a vital role in improving retirement outcomes by offering financial wellness programs, which workers are interested in but hesitant to pay for.
Although 56 percent of retirees are enjoying retirement and pursuing passions, early retirees face more financial challenges, with nearly half wishing they had saved more.
Brett Marchand, SVP at Manulife Group Retirement, stressed the importance of increasing financial resilience to help individuals save while working, especially given longer life expectancies.
