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How to plan for retirement when you have no pension
– moneysense.ca
In years past retirement planning was relatively easy. Fifty years ago, more than half of working Canadians, and an even higher proportion of men, could fall back on a corporate or union pension plan as their main source of income in retirement.
That’s no longer the case. Just 38% of paid workers in Canada were covered by a registered pension plan in 2021, the most recent year surveyed by Statistics Canada. The retreat of pension coverage is particularly marked in the private sector.
The news isn’t all bad. Pension coverage has stabilized over the past two decades after falling significantly between 1980 and 2005. The number of Canadians covered by workplace pensions actually increased 1.8% in 2021, to 6.7 million, with the fastest growth coming from defined-benefit plans, the gold standard of pension coverage. Still, that failed to keep pace with the rate of employment growth.
That leaves a majority of Canadians needing to cobble together their own retirement plan based on government programs, registered retirement savings plans (RRSPs), tax-free savings accounts (TFSAs) and non-registered investments, and they’re anxious about it…
