For those who have them, workplace pensions are an important piece of the retirement income puzzle. But there's a lot for advisors to unpack.JuSun/iStockPhoto / Getty Images
Most clients, particularly younger ones, are saving for retirement without the benefit of a workplace pension plan.
As Brenda Bouw reported this week in the introduction to Globe Advisor’s new series, Pensions Unpacked, that leaves a lot of work for the Canada Pension Plan and Canadians’ personal savings.
IG Wealth Management’s annual retirement study, released this week, shows the strain on the latter. Four in five non-retired Canadians said the cost of living makes it difficult to save for retirement, and almost half said they prioritize spending on their current lifestyle – whether to pay down debt or to enjoy life now – over retirement saving. Survey participants, on average, allocated 12 per cent of income for retirement, with 67 per cent going to basic living expenses and 20 per cent to leisure activities.
For those who have workplace pensions, they’re an important piece of the retirement income puzzle. As clients change jobs more frequently and take sabbaticals or mid-career breaks, navigating pensions becomes more complex. During the coming weeks, we’re digging into that complexity.
Clients with pensions still need help with key decisions such as survivor benefits, buyback options and whether to commute their plans if they leave their employer. There are also tax considerations, such as pension income-splitting and managing foreign pension plans, and big choices about how pensions fit into broader accumulation and decumulation strategies.
For clients without pensions, there are also more pension-like investment products on the market.
Look for new stories in the series every Tuesday at Globe Advisor. As with our Planning for the CPP series last year, we want to know what interests you. Do you have a question or a story idea? Let us know: PensionsUnpacked@gmail.com.
– Mark Burgess, Globe Advisor assistant editor mburgess@globeandmail.com
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