Retirement

2025 Mercer Retirement Readiness Barometer

Rising cost of living may cause lower-income workers to postpone retirement, but flexible savings plans provide a course for earlier exit.

The soaring cost of living and uncertainty over tariffs make it increasingly difficult to prioritize saving for retirement

Lower-income workers are less likely to save for retirement when they need to spend more on daily necessities

Flexible employer-sponsored plans enable employees to access funds for immediate needs while benefiting from employer contributions.

Flexibility can alter the financial prospects for Canadian workers

See how the financial outlook for two workers, with identical income and access to the same potential company match, can differ when flexibility is incorporated.

Let’s compare two 30-year-old employees with an annual salary of $50,000. They both have access to a workplace retirement plan that offers employer match contributions of up to 5%.

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Incorporating flexibility in the workplace savings plan can improve retirement outcomes by 2 years

Actions employers can take:

Review the overall purpose of the plan and its intended outcome for members

Review how members utilize the plan, e.g. maximize contributions, voluntary savings

Review the purpose of the various plan vehicles – locking-in vs. access to savings

The Mercer Retirement Readiness Barometer measures the age in which different personas can comfortably retire based on their participation within an employer-sponsored Capital Accumulation Plan and benefits provided by the government (like CPP/QPP/OAS). The above analysis is based on Mercer retirement readiness analytics using data from proprietary Mercer databases and tools. Retirement readiness is defined at a 75% probability of not running out of money before death if an appropriate level of income is maintained throughout retirement (including government benefits), which for the 30-year-old is 74% of pre-retirement income. Assumptions for Persona 1: 0% savings between age 30-45, 10% savings from age 45+. / Assumptions for Persona 2: 5% savings between age 30-45, 10% savings from age 45+.