Saving for retirement is important – for women, there may be even more to consider when it comes to building a secure financial future.
HOOPP’s 2024 Canadian Retirement Survey, conducted by Abacus Data, found that women are more likely than men to feel unprepared for retirement, and to experience anxiety, fear and frustration because of their financial situation. They also tend to start saving for retirement later than men and generally have less money in savings.
To fully understand why this is, it’s important to consider the other factors at play. Women often make less money than men, with an average annual income gap of 29% (meaning women earned $0.71 for every dollar earned by men). They are also more likely to work part time or to take time off work in order to have a child or care for their family, limiting their ability to save for retirement. These social and structural inequalities, alongside a rising cost of living, leave women at higher risk of experiencing poverty in retirement.
Having access to a workplace pension can make a big difference. Defined benefit (DB) pension plans, like HOOPP, can play a key role in bridging the gaps caused by gender inequality. As a guaranteed source of income during retirement, a DB pension can help provide peace of mind to members, leading to lower levels of financial stress.
How pensions help
Access to a workplace pension plan enables Canadians to save more efficiently – our research shows just 29% of workers with a workplace pension report having less than $5,000 in savings, compared to almost half (48%) of those without. At the same time, almost half (49%) of unretired women with a pension feel prepared for retirement, compared to just 29% without a pension.
Pensions, especially DB pensions, deliver significant value to their members. When women have access to these kinds of pensions, they benefit from things like risk pooling, professional investment discipline and fiduciary governance – a few of the key drivers that result in higher pension income for less cost than other retirement savings vehicles.
For example, more than 80% of HOOPP’s active members are female. This has given us unique insight into the Plan features that can be particularly beneficial for them.
What you can do if you have access to a workplace pension
Join, if you haven’t already. If your workplace offers a pension plan and you are not already a member, consider joining and start building your pension as soon as possible.
If you work full time for a HOOPP employer, you are already enrolled in a world-class pension. If you are a part-time, casual or contract employee working for a HOOPP employer, you can join the Plan at any time – just inform your HR department and HOOPP will take care of the rest. In fact, nearly a third of HOOPP’s active members work part time.
Educate yourself on the features offered by your pension. If you already contribute to a workplace pension plan, familiarize yourself with and take advantage of the features your plan offers to help ensure you get the best possible pension at retirement.
HOOPP members may benefit from various Plan features, including:
What if you don’t have a pension?
Leverage tax-advantaged savings vehicles. You can use personal registered retirement savings plans (RRSPs), tax-free savings accounts (TFSAs) and other savings products to help build your retirement income. It’s important to save for retirement as early and as often as feasible for your individual financial situation.
Familiarize yourself with the benefits offered by potential employers. If or when you are looking for a new job, consider the benefits employers offer their employees, including if they offer retirement benefits – such as a pension or group RRSP.
When considering retirement benefits, make sure to check what kind of savings account or pension you would contribute to, as well as what contributions, if any, your employer would make. Familiarizing yourself with the total compensation package can help you make an informed decision about your next steps.
Build financial resilience while you plan for retirement. Build financial resilience by taking a holistic look at your finances and your long-term financial goals. You can start by asking yourself a few questions: what are your current financial priorities? Are you working toward them effectively? What changes will you need to make to meet your long-term goals?
Make sure you factor retirement into those goals – while it may not always be your top priority, it is essential to save for the future throughout your working life.
For many women, this may be easier said than done. If you are struggling to afford childcare or to put food on your table, saving for retirement will not be top of mind. Once you can afford to start saving again, refocus and pick up where you left off.
Additional resources
Learn more about saving for retirement, how we can work together to reduce the barriers to a secure retirement for more women, and the Plan features offered by HOOPP in the resources below: