rfmcdonald | [LINK] "Younger workers more likely to see less income in retirement, CIBC says" (Reply)

CBC's Paul Evans reports on the grimdark future facing the average young Canadian worker facing retirement.

Urgent attention needs to be given to what Canadians can expect to get in retirement income — something that's become a real divide along generational lines, a prominent Canadian economist says.

In a note to clients this week, Benjamin Tal at CIBC waded into the ongoing debate over Canada's looming pension and retirement crisis.

While falling well short of endorsing any of the myriad proposals out there to fix the problem, including beefing up the Canada Pension Plan, encouraging more individual savings by expanding RRSPs and TFSAs or something else, Tal is unequivocal in his view that declining retirement income is a problem needing a solution — and soon.

After running a simulation of pension income across a wide variety of age ranges, Tal found a clear deliniation between those in retirement now or approaching it, and those who won't get there for several years or decades.

In today's economy, few people rely on any one source of retirement income, with most people drawing on a combination of their own investments such as RRSPs, TFSAs and real estate, government programs such as CPP and things like pension plans that they may have accrued from employers over a lifetime of work.

In general, Tal says, "the typical 70-year-old today has enough income to maintain his or her pre-retirement standard of living, taking into account the typical drop in expenses in one's post-working years."