Bridging the Retirement Readiness Gap: How Canadian Employers Can Support Employee Financial Wellness

In today’s economic climate, Canadians are facing mounting challenges in preparing for retirement. Rising costs, wage stagnation, and competing financial priorities have made saving for the future more difficult than ever. For many employees, the dream of a comfortable retirement feels increasingly out of reach, creating stress that negatively impacts both their personal and professional lives.

This stress is not just a personal issue; it’s a workplace issue too. Employers, however, are uniquely positioned to be part of the solution. By offering retirement savings plans and financial education as part of their benefits packages, businesses can help bridge this growing gap.

The Current State of Retirement Savings in Canada

The 2024 HOOPP survey illustrates how Canadians are struggling with retirement readiness. Key findings reveal that many employees are either under-saving or not saving at all. This presents a critical opportunity for employers to step in and address these challenges. By recognizing the barriers employees face, businesses can implement targeted solutions to support their teams' financial well-being.

• A significant portion of Canadians are not meeting their saving goals.
• Many lack the knowledge to make informed decisions about retirement planning.
• Employees with access to employer-sponsored plans feel more confident about their financial futures.

These trends emphasize the growing need for workplace programs that empower employees to save effectively and plan for the long term.

How Are Economic Pressures Limiting Retirement Savings?

The challenges employees face are compounded by broader economic pressures. It’s no secret that Canadians are feeling the pinch of rising costs and stagnant wages. These economic realities make saving for retirement even more difficult and mistakes even more common.

Key barriers to saving include:

• Inflation: Rising prices erode the value of savings, creating anxiety about future financial security.
• Wage stagnation: As the cost of living climbs, stagnant wages limit employees’ ability to allocate money for savings.
• Cost-of-living increases: Higher costs for housing, healthcare, and daily expenses leave little room for retirement contributions.

These conditions make it clear: the financial burden many employees face often isn’t a lack of motivation but a lack of resources and guidance.

What Are the Risks of Not Saving Enough for Retirement?

The consequences of insufficient savings extend beyond financial concerns—they impact employees’ quality of life and productivity. Without sufficient savings, the gap between what employees have and what they need for retirement continues to grow.

This has real consequences, including:

• Many workers may need to postpone retirement, impacting their quality of life.
• Insufficient funds may lead to dependence on government support or family assistance.
• Uncertainty about retirement savings contributes to stress, which can affect productivity and well-being.

Recognizing these risks underscores the importance of proactive planning and the role employers can play in helping employees secure their financial futures.

How Can Employers Close the Retirement Savings Gap?

While the challenges are significant, the solution is clear: Employers have the power to make a meaningful impact. Offering employer-sponsored retirement and savings plans is one of the most effective ways to help employees close the gap.

Not only do these programs provide financial security, but they also foster greater loyalty, job satisfaction, and retention. Montridge partners with employers to design savings programs and education tools that meet the needs of both the organization and its employees.

By cultivating a workplace culture where financial wellness is prioritized, employers can help their teams plan for a more secure future.

What Are the Benefits of Supporting Employees’ Financial Wellness?

• Employees who feel supported are more likely to remain with their employer.
• Competitive benefits help organizations stand out in the job market.
• Structured plans encourage consistent contributions and better outcomes.

Why is Financial Education Essential for Retirement Planning?

Retirement planning isn’t just about providing the right tools—it’s about teaching employees how to use them effectively. Montridge offers comprehensive financial education resources to help employees take control of their future, such as: 

• Workshops and seminars: these sessions are designed to engage employees on key topics such as budgeting, the basics of retirement savings, managing debt, navigating investment options, etc. They can be aligned with the company’s specific savings and benefit plans.
• Online resources: drawing awareness to articles, videos, and interactive tools such as retirement calculators that can be accessed anytime for ongoing learning.
• Group insights and feedback: helping employers uncover insights from group workshops and surveys, providing a snapshot of overall financial readiness and helping employers understand where their team might need additional support.
  
  

Ready to Help Your Team Achieve Financial Security?

By offering retirement savings plans and educational resources, employers can make a significant difference in their employees’ lives. Montridge helps organizations implement solutions that build financially secure, engaged workforces.

Contact us today to learn how we can support your business and your employees’ futures.