Baby boomer retirement planning—how employers can help ease the transition

The case for baby boomer retirement planning 

More than half of baby boomers (64%) expect to delay retirement to increase their retirement savings.² But this may not be the best or most realistic strategy. Our 4^th annual survey of Canadian workers found that nearly half (47%) of retirees stopped working sooner than they planned.² And many are struggling financially, highlighting the importance of proactive planning and the stress of having to stretch savings longer than expected.

There’s another compelling reason to help baby boomers plan for their future. While older workers bring a wealth of skills and institutional knowledge to your organization, delayed retirements can increase your compensation, benefits, and talent acquisition costs—especially if younger workers leave due to limited advancement opportunities. Offering retirement planning can help baby boomers feel more prepared, leading some to reconsider their retirement age, potentially benefiting your bottom line.

Developing your strategy

Let’s look at three areas where baby boomers could use some support and how you can help with each one.

1 Longevity planning

Baby boomers face the exciting challenge of planning for a retirement that could last decades. Not surprisingly, 72% expect to rely on their pension plans to help fund these years.² And they need help figuring out how to make their savings last. That’s where longevity planning comes in. It’s a relatively new concept in retirement planning that’s gaining traction as our society grapples with the issues of an aging population.

What does this support generally entail?

Be sure to consult with your plan’s financial professional and recordkeeper to find out what longevity-related resources they offer. Their assistance can streamline the process, helping you launch your retirement planning program quickly and efficiently.

2 Building a budget and finding retirement income sources

Of all the generations, baby boomers are experiencing the lowest level of financial stress, and they’re the most optimistic about their retirement savings.² Even so, nearly a third (27%) are worried about affording necessities, such as food and housing, in retirement. Nearly one-third are also concerned about rising healthcare costs, which may contribute to their fear of running out of money.² Consider hosting a series of meetings to help these workers strengthen their financial resilience—something that’s essential for their future well-being.   

Topics to consider include:

• Creating a retirement budget
• Balancing saving with paying off debt
• Tips for maximizing savings
• Understanding CPP/QPP and OAS
• Building emergency savings
• Strategies for making their investment portfolio retirement ready

Once again, your plan’s financial professional and recordkeeper may offer presentations that you can use, so be sure to discuss your baby boomer education strategy with them. By fostering financial resilience, you can help older workers feel less anxious that they’ll have enough money to fund a decades-long retirement.

3 Easing the transition to retirement

The final area of support involves examining your plan design and organizational policies. What are you looking for? Opportunities to help your older workers retire on their terms and make the most of their retirement savings.

Here are a few questions to consider during your review:

• Does your plan permit catch-up contributions?
• How flexible are your plan’s withdrawal options?
• Do you offer preretirement counseling?
• Is phased retirement a possibility? Part-time work? Job sharing?
• Do your employee benefits support the needs of an aging workforce?
• What changes can be made to create a more supportive work environment?

Before making any decisions, it’s important to understand the possible impact on both your business and your workforce. Consider forming a committee with representatives from your legal, finance, operations, and HR teams to help you evaluate the potential benefits and drawbacks of each opportunity you identify.

Ripple effects on your business

Baby boomers aren’t the only ones who may benefit from your support. Providing comprehensive retirement planning can show your entire workforce that you care about their well-being, which can help:

• Build loyalty and goodwill
• Boost morale
• Increase productivity
• Attract and retain talent

Supporting your workforce

As baby boomers prepare to retire, many are eager to explore new passions, just like the 56% of retirees already doing so.² To enjoy these adventures, they need to feel financially prepared for a retirement that could span decades.   

Consider offering longevity-focused retirement planning to help them build this confidence and embrace life after work. For more insight, view our full 2024 financial resilience and longevity report.

1 Macrotrends.net, July 2024. 2 2024 Manulife financial resilience and longevity report, a commissioned study.