A new research paper from fuse strategy takes a fresh look at how Canadians react to retirement — and the findings are an eye-opener.

The paper begins by observing that while most of us are aware of the need to save for the future, we are not as sure about how to go about it. “This seemingly simple task is challenged by our human biases for clarity, certainty, and immediacy: how should we prepare? What will we need? How long will the future last,” the authors ask.

After researching the topic, fuse found that for most people, retirement is “invisible… not something we normally talk about.” It’s also seen as “boring and depressing… a time when we will be old and possibly unwell.” Retirement planning is seen as “complicated and confusing,” making it easier to “do nothing,” and retirement is finally seen as “less important than our current needs.”

The fuse study then asked 16 Canadians to shed more light on the meaning of retirement.

They described it, the report notes, as not so much an individualist thing, but “a collective achievement and experience,” to be shared with family and friends. It’s a time of “freedom and simplicity,” free of pressure from things like work, the report continues. It’s a time when “travel and self-determination are valued,” and is an aspirational period of time with respect to nature and the environment.

Somewhat surprisingly, retirement was not seen as being connected to financial assets.

“Retirement should not be seen as synonymous with the products designed to enable it, including pensions. None of our participants mentioned money in articulating the meaning of retirement, which is particularly notable given the clear framing of our study. When defining what matters to them about retirement, our participants simply did not think about the financial dimension of the experience,” the report notes.

Those who had positive views on retirement saw it as attainable and achievable, the report notes. Many of them reported they had a workplace pension plan.

For those who were negative about retirement, it was seen as something “that happens to them when they were compelled to stop working by health or circumstance.” This group had trouble with the idea of retirement involving a “conscious choice” to stop working.

The negative group had not had any experiences dealing with “knowledgeable financial guidance,” and “examples of retirement tended to be absent or negative for participants,” the report states. “Many participants considered retirement planning to be an impolite topic,” the report adds.

While workplace pension plans were generally seen as positive by those who were positive about retirement, the report states that more work needs to be done on this file.

“The role a workplace pension plan can play in providing confidence in retirement outcomes absolutely depends on how those retirement outcomes are defined – or, put another way, understanding what retirement really means to Canadians is critical to supporting it. There is a clear need to develop a more nuanced view of the meaning of retirement – and a clear opportunity to use this insight to strengthen and improve the value and impact of the workplace pension plan,” states the report.

Interestingly, participants were found to value pensions more when they were on the receiving end. “Pensions… were more fully appreciated in hindsight, and often understood as `free money’ from the employer,” the report notes. Younger participants stated they wanted to have “values-oriented outcomes” from the investment activity within their pension plans, ranging from responsible investing to clearly expressed organizational values, the report adds.

This interesting paper concludes by advising pension plans to do more to engage with their members and prospective members, through modernization, advocacy, and action.

If you lack a pension plan at work, don’t worry — you still have options for building retirement income. A great place to start is the Saskatchewan Pension Plan. Joining SPP means your savings are managed, along with those of more than 31,000 other members, in a pool investment fund value at more than $588 million as of Dec. 31, 2022; the annuity fund totalled a further $108.2 million. Costs are kept low, but experts guide the investing. At the end of the day, your savings will have grown — and the future, retired you will have options to pick from for turning savings into income, including the chance for a lifetime monthly annuity payment. Check out SPP today!

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