With a rising number of Canadians unprepared for retirement, it’s critical to offer proactive support to those in need of expert guidance. To promote this initiative, the CIA has released an insight statement, Helping Canadians Prepare for the Risks of Retirement, focusing on how financial advisors can help their clients plan for retirement, and an accompanying fact sheet, Planning for a secure retirement, that shares what Canadians can do to strengthen their financial future.
Early and proactive retirement planning is critical
Recent data reveals a worrying gap in retirement preparedness. CIA research shows that over half of Canadians don’t have a comprehensive retirement plan, and only 44% of Canadians without a plan expect to live comfortably in retirement. These statistics highlight a disconnect between expectations and the reality of what’s required to achieve a secure retirement.
Financial professionals can fill this gap by helping clients understand and address the risks that can impact their financial well-being. These risks could affect their ability to generate income, care for themselves as they age or achieve their retirement goals.
The role of actuaries in retirement planning
Actuaries play an intricate role in addressing the risks associated with this critical life phase. As experts in risk management and financial security, actuaries are at the forefront of developing strategies that provide long-term stability and protection for individuals.
Many CIA members work on arrangements that help Canadians secure their retirement, from pension plans to annuities and other financial solutions designed to reduce retirement risks. These CIA publications were developed to offer resources to financial advisors and their clients as they navigate the complexities of retirement planning.
Supporting Canadians as a financial advisor
Financial advisors offer vital support at every stage of life, addressing needs as clients’ circumstances change. For example, a recent graduate may struggle with student debt or face employment instability, while, later in life, clients may transition into retirement and focus on managing their accumulated wealth.
A financial advisor’s role expands as clients go through life’s milestones, such as marriage, homeownership or having children. These changes bring new financial priorities, like saving for a child’s education or ensuring adequate insurance coverage in the event of premature death.
As clients approach retirement, the focus shifts from accumulating assets to managing and distributing them in a tax-efficient manner. Financial advisors can help clients explore:
- Budgeting and debt management
- Insurance solutions to mitigate risks associated with critical illness, disability or long-term care
- Maximizing government benefits such as the Canada Pension Plan and Old Age Security
- Creating tax-efficient investment strategies to optimize retirement income
Using the CIA’s insight statement
Helping Canadians Prepare for the Risks of Retirement offers a comprehensive overview of how advisors can help clients plan for their retirement. It includes key strategies and practical steps that you can implement with your clients to ensure they’re on track for a secure retirement. Some of the most impactful takeaways for professionals include:
- Helping clients build an emergency fund and long-term savings plan that balances their short-term financial obligations with their long-term goals.
- Reviewing clients’ employer benefits and understanding how to integrate them into a broader retirement strategy.
- Exploring insurance solutions, such as life insurance, critical illness coverage and disability income, to protect against unforeseen risks that could derail retirement plans.
- Creating retirement income strategies that factor in government benefits, employer-sponsored plans and personal savings to ensure sufficient funds for later years.
By reviewing and sharing these strategies, you can position yourself as a trusted advisor and help your clients take charge of their financial future.
Starting with transparency
The first step in assisting clients with their retirement planning is trust-building. When establishing a relationship, your role is to explain your process in clear, accessible terms and demonstrate how you can guide them through the complexities of retirement planning.
Once a relationship is established, help clients gather the information necessary to develop a sound financial strategy, including details of employer benefits or other existing programs. By having such information at the outset, you’ll be better equipped to recommend a strategy that aligns with their goals and maximizes opportunities.
Encouraging clients to take action
It’s crucial to emphasize to your clients that planning for retirement is not just about numbers – it’s about ensuring their peace of mind. Whether they’re just starting their career or nearing retirement, it’s never too early (or too late) to take charge of their financial future.
Encourage your clients to read the Planning for a Secure Retirement fact sheet to ensure they are aware of the steps they can take today to prepare for tomorrow.
Empowering Canadians to prepare for retirement
Financial professionals play a critical role in empowering their clients to prepare for retirement. By helping them understand the risks, explore potential strategies and take meaningful steps toward financial security, you can provide your clients with a path to a fulfilling retirement.
By reviewing Helping Canadians Prepare for the Risks of Retirement, you’ll gain valuable insights into how to support your clients through every stage of retirement planning. Don’t wait for your clients to come to you – share the CIA’s expertise, guide their planning and help them secure a future that offers peace of mind.
