Plan sponsors need to take a holistic view to their members’ retirement savings and understand that at different stages in employees’ lives, they face different challenges, says Robin Pond, investment consultant with Buck Consultants.
For example, young people likely aren’t maximizing their RRSP because they can’t afford to put money toward a pension plan at this life stage.
“A lot of Canadians, especially the younger Canadians, have reached their maximum in terms of disposable income that they want to put into a pension plan or group RRSP,” says Pond.
Meanwhile, older plan members may be struggling to pay off mortgages or other debts as retirement looms closer. And increasing debt levels at all ages have left many Canadians wondering whether paying off debt is a better investment than saving for retirement.
Pond recommends employers make the effort to address employees’ needs across the board—from young employees with plenty of working years ahead of them, to mid-life employees who have families to care and pay for, to older employees who may be trying to pay off mortgages or credit card debt before retirement.
“It comes down to having communication tools that are broad enough that they can cover people at all the different stages. Look at the entire balance sheet, look at the debt, look at the various assets,” he says. “It has to be on a very broad basis of ‘Am I financially viable and healthy when I can no longer work?’”
Watch the video to hear what else Pond has to say.