People for Pensions

Understanding retirement in a changing world

Your retirement journey starts with the choices, priorities and plans you make along the way. That journey now looks different from what it did a generation ago.

You may be thinking about:

• Balancing today's expenses with tomorrow's goals.

• Navigating a longer life and career.

• Understanding the different sources of income that can support you in retirement.

This Financial Literacy Month, let’s explore these three trends that are shaping the way Canadians think about retirement today.

A recent survey found that 65 per cent of Canadians under 35 believe retirement will look different for their generation. Nearly half expect to work longer and retire later.

Key findings:

• Rising living costs are making it harder to save. Only 44 per cent can cover basic expenses while saving for the future.

• Many are prioritizing their current flexibility, work-life balance and wellbeing.

• Interest is growing in "micro-retirements" – short career breaks to enjoy life's milestones instead of waiting until 65.

People around the world are working longer as populations age and people spend more years in retirement. In many countries, governments are responding by raising the age when people can access their full public pension benefits.

For people without a defined benefit (DB) pension, a longer retirement can also mean having to make personal savings last for more years. Alternatively, people may choose to work longer to support retirement needs.

A DB pension provides a different kind of security: predictable income for life. That lifetime income can give members greater confidence when planning for retirement, no matter how long retirement lasts.

Read the Globe and Mail article to learn more.

The National Institute on Ageing (NIA) framework suggests retirement planning may be easier when you focus on how your income supports your lifestyle, rather than where it comes from. It groups retirement income into two categories:

• Income foundation for essential expenses.

• Spending buckets for discretionary goals such as travel, hobbies and unexpected costs.

The framework is built around an important question: how will I pay for my lifestyle for the rest of my life?

It shows that reliable, lifelong pension income isn't just one piece of the puzzle. It's the foundation everything else rests on.

The biggest retirement lesson today is that retirement is no longer just an end goal. It's becoming a series of choices you make throughout your life.

This Financial Literacy Month, keep exploring retirement topics and share this newsletter with family, friends or colleagues.