‘Default solutions are helpful in reinforcing the message of contribute what you can afford and do so consistently,’ says Jessica Sclafani
New research from T. Rowe Price reveals a striking disconnect between what people claim they want and how they behave when it comes to retirement savings. But while Canadian retirement savers in defined contribution (DC) plans say they want to control their investments, the data tells a different story.
According to T. Rowe Price’s Global Retirement Savers Study, Jessica Sclafani explained that, while Canadians see retirement as important, they are juggling it alongside many other financial goals. Against that backdrop, the firm examined how people around the world actually want their retirement money invested, starting with a global lens before narrowing in on Canada.
"More than two-thirds of global retirement savers prefer to choose how their retirement savings are invested," noted Sclafani, global retirement strategist at T. Rowe Price. "Although this group is roughly split between those who say they want choice but with educational support, and then those who are confident in their investment decisions. I think that's an important distinction within that broader preference for choice."
Meanwhile, roughly 22 per cent globally want their savings automatically invested for them via a default option, noted Sclafani. Canada notably stands out in this picture as Canadian retirement savers are the most likely among the five countries studied to favour defaults, at 27 per cent, while Japanese retirement savers show the least comfort with defaults and lean more to a DIY style.
Among Canadian respondents, according to Sclafani, the share of savers who prefer to use a default option rises with age, noting the proportion climbs from 20 per cent to 35 per cent, she said, meaning older Canadians are more inclined than younger ones to let a default option handle their retirement investing, and may be more willing to recognize “the importance and the value in a professionally managed multi-asset solution,” she said.
According to Sclafani, target date funds (TDFs) are the most common default investment option in Canada. The firm did not use the term “target date investments” in the research, instead using “default investment option.” Still, Sclafani argues that Canadian savers are distinctive in how candid they are about why they lean on defaults.
“Perhaps as the most honest or candid respondents in our survey population, one-third of Canadian retirement savers expressed a preference for a default said they did so because they didn't have time and or interest to choose their investments,” she added.
She underscored that the survey also linked emotions and advice-seeking: those who said they were very excited about retirement were more likely to use investment professionals and professionally managed multi‑asset solutions, suggesting a relationship between advice, excitement about retirement, and confidence in their future.
When countries introduce national default policies or regulatory frameworks for default investments, she adds, it typically drives default usage above 70 per cent of plan members. That reality clashes with what people say they want in surveys.
Additionally, this gap between stated preference for choice and actual reliance on defaults leads her to describe around two‑thirds of savers as the “realistic default population,” a figure that lines up with what they see in practice.
She argues that the industry needs to rethink the “set it and forget it” approach to retirement saving, adding that defaults have clearly worked in one sense: they’ve pulled people into professionally managed, multi‑asset portfolios without requiring much effort from members.
“In one way, we have solved for a lack of member engagement by creating default investments, which have been undoubtedly successful in terms of getting retirement savers invested in the markets in a professionally managed multi-asset solution. We can't question that,” emphasized Sclafani. “But we have to consider whether there’s an opportunity, particularly as we have a growing population of savers approaching, entering retirement who haven't had to give a whole lot of thought about their retirement? I think there's this kind of tension between creating frictionless retirement savings but also looking at how we can introduce deliberate moments of friction to create engagement.”
She frames this as a core tension for plan design: on one side, making retirement saving as smooth and automatic as possible; on the other, deliberately adding well‑timed points of friction to force members to pay attention, make choices, and understand their position.
When it comes to the workplace, she believes employers will need to be more flexible about what retirement actually looks like. Instead of treating retirement as a sharp exit from the workforce, organizations may need to accommodate more part‑time or phased roles. In her view, part‑time work in retirement is often miscast as a negative driven only by financial strain, when it can also support social connection, purpose, structure, and other non‑financial needs.
Sclafani emphasized that retirement can’t be treated as a uniform experience, underscoring that a single decumulation strategy or generic campaign might be a useful baseline, but it won’t be enough on its own. To reach most of their members, plan sponsors will need multiple retirement income options, education, and access to advice that can be tailored.
She stressed that supporting retirement income should be a strategic choice for plan sponsors and not just a universal obligation, noting that whether decumulation is a priority for a given plan depends on its workforce profile, particularly as an employer with high turnover and short tenures may be better off focusing on emergency savings, tax-advantaged accounts, or getting people to save in the first place, rather than putting most of its energy into retirement income features.
“Default solutions are helpful in reinforcing the message of contribute what you can afford and do so consistently,” said Sclafani.
