– The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies through research that is nonpartisan, evidence-based and subject to definitive expert review.
CANADA – Five different studies on the level of preparedness of Canada’s future retirees have some common conclusions, according to a new report from the C.D. Howe Institute. In “Assessing the Retirement Income Prospects of Canada’s Future Elderly: A Review of Five Studies,” author Bob Baldwin looks beyond the headline conclusions of the five most talked about studies on retirement readiness in Canada.
“Unfortunately, all five reports have been used to support partisan talking points, thus diverting attention from some conclusions common to some or all of them and that are important in considering the retirement income situation of the future elderly,” comments Baldwin.
The author reviews these studies with an aim to look beyond the headline conclusions to assess the degree of difference among them when they focus on a commonly defined population and to make note of any shared conclusions. They are:
- A McKinsey (2012) report concluded that 23 percent of the future elderly will suffer a decline in their standard of living in retirement
- That number fell to 17 percent in its 2015 report (McKinsey 2015)
- Horner concludes that 22 percent of the future elderly will suffer a significant decline in their standard of living
- Moore, Robson and Laurin (MLR 2010) concluded the future elderly will face declines of 44 percent
- Wolfson (2011) concluded 50 percent.
The five studies give very different impressions of outlook for the future elderly. However, if attention is focused on young middle-income earners, the differences in results diminish significantly. The risk of a declining standard of living is largely a middle- and upper-income earner problem, concentrated among the youngest age group and those not participating in a workplace pension plan.
Baldwin concludes: “These studies must be dispassionately assessed by policymakers if they are to accurately inform pension policy.”
