Study shows advice gap as many workers lack plans, income targets and risk awareness
Canadians are walking into retirement with less guaranteed income and more uncertainty – and many do not understand the plans they already have.
According to IG Wealth Management’s annual retirement study, less than half (48 percent) of non‑retirees have any workplace pension plan, whether defined benefit (DB) or defined contribution (DC), roughly three decades after large employers started phasing out DB arrangements.
A quarter of employer pension holders do not know key details of their plan, including whether it is DB or DC, underscoring persistent knowledge gaps even among plan members.
IG Wealth Management reports that only one‑third (33 percent) of non‑retired Canadians have a retirement plan and savings, and just 11 percent know how much annual income they will need in retirement, while nearly half (49 percent) say they simply do not know.
As reliance on personal savings grows, only two‑fifths say they understand Old Age Security (OAS), Registered Retirement Income Funds (RRIFs), or how retirement income is taxed.
More than two‑thirds (67 percent) have not stress‑tested their plan against major risks such as inflation, health‑care costs, market downturns, or longevity.
The study also links these gaps to growing emotional strain.
IG Wealth Management notes that 53 percent of non‑retired Canadians report negative feelings about retirement, often because they feel behind on savings and are unsure they will be able to afford to retire at all.
Christine Van Cauwenberghe, head of Financial Planning at IG Wealth Management, said, “The decline of defined benefit and contribution pension plans has fundamentally shifted the burden of retirement planning on to individuals in recent years.”
She said this shift makes it more important for people to work with a financial professional to build a plan that supports their retirement goals.
Despite the shift in risk to individuals, IG Wealth Management says only 36 percent of Canadians currently work with a financial advisor.
Among those who do, large majorities report that their advisor helps optimize their retirement plan (87 percent), educates them on financial risks (83 percent), coaches them toward their goals (82 percent), and keeps them on track (84 percent).
Van Cauwenberghe said an advisor can “help build a retirement plan that accounts for taxes, longevity, income sources, and risk” — areas where many people struggle on their own.
She added that “in a world without guaranteed pensions, advice is one of the strongest tools Canadians have.”
