Pattie Lovett-Reid

Chief Financial Commentator, CTV

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There was a day when individuals worked and saved, employers provided a pension and the payroll taxes funded government benefits, resulting in a predictable income stream for a financially secure retirement, according to John Hailer, CEO of Natixis Global Asset Management. Today, demographics and economies have rendered this model unsustainable as leaders look for ways to provide a new retirement blueprint.

In a recent survey by Natixis, Canada ranks 10th on a global basis where index breaks down the drivers that secure a retirement and allow comparison of best practices. Taking top spot was Norway, followed by Switzerland, Iceland, Sweden and Germany, to name a few. Besides Canada, the top non-European nations are New Zealand and Australia. The U.S. was 14th on the list.

Canada did well due to its relatively high per-capita income and low levels of income inequality. We also spend significantly on healthcare. On the other side of the balance sheet, low interest rates and high levels of government debt are not favourable to retirees.

Given that we were 10th on the list, here are four global trends we can learn from the world leaders:

1) Access: An aging workforce and increased life expectancy makes traditional pay-as-you-go government retirement benefits unsustainable. Individuals will need to have access to individual or work-based savings programs.
2) Incentives: Smart policy and favourable tax treatment will help individuals save for retirement, making it easier to care for their own needs after they stop working. 
3) Engagement: Automatic enrollment in workplace retirement programs would be a step in the right direction.
4) Economics: Retirement security extends beyond the saving vehicles themselves. It includes consideration for an aging population that will be living on a fixed income. Monetary, fiscal and healthcare policies all play a role in ensuring retirees are self-sufficient.

Earlier studies this year have suggested that 72 per cent of Canadians are acutely aware there is an increasing need to fund a greater share of their retirement. The question is will they save enough by the time they retire? Report after report suggests that we simply aren’t saving enough, with good intentions not translating into larger savings.

As the Chief Financial Commentator for CTV News, Pattie Lovett-Reid gives viewers an informed opinion of the Canadian financial climate. Follow her on Twitter @PattieCTV