Better retirement planning tools for better retirement outcomes
As we write our last edition of GO with Eckler for 2025, we are mindful not only of the opportunity the end of the year provides for reflection but also of the financial reality that this past year has brought for many Canadians. The high cost of living remains a top concern for many and financial anxiety about retirement continues to weigh heavily. According to the 2025 CPP Investments Retirement Survey, six out of ten Canadians are concerned that they will outlive their savings.
Many Canadian employers have stepped up with workplace financial wellness supports and retirement planning tools but more work needs to be done to ensure the tools provided are effective, accessible, and reliable.
Regulatory guidance and industry call to action
For capital accumulation plan (CAP) sponsors, CAPSA Guideline No. 3 emphasizes that plan sponsors retain ultimate responsibility for overseeing their plans. This means sponsors must provide members with access to decision-making tools and oversee the quality of member education materials. Tools should help members estimate potential living and lifestyle expenses in retirement and assess the impact of contributions, withdrawals, investment returns, and fees. Assumptions used in these tools must be prudent, periodically reviewed, and clearly disclosed.
The Association of Canadian Pension Management (ACPM) has called for the creation of dashboards that provide a clear picture of all individual retirement income sources and also advocates for unbiased advice and improved access to financial planning resources.
How to build a better tool
Most of the planning tools available either through the workplace or elsewhere are “self-serve” – i.e., the user inputs their data and the tool provides the requested information without (or with limited) guidance.
Basic planners offer simplicity and ease of use. While these planners often facilitate higher engagement, they often lack personalization which can potentially result in inaccurate estimates.
Advanced planners that allow for more personalized data can improve accuracy but can sometimes cause “information overload” or overconfidence in results. Finding the right balance is critical to building user confidence without creating false expectations.
Effective, accessible and reliable
Self-serve planners aim to give members a sense of whether they are saving enough for retirement. While not a replacement for professional financial advice, these tools can drive action, especially for early and mid-career members by encouraging maximization of employer programs. For later-career members, however, planners should serve as conversation starters for deeper retirement planning discussions.
Best practice attributes
- User-friendly design
- Robust and regularly revisited economic assumptions
- Realistic returns and spending projections
- Focus on spendable income versus gross income
- Holistic consideration of personal data (assets, debts, housing equity)
- Longevity guidance and integration with public pensions
- Scenario testing (e.g., widowhood, spending shocks)
We are delighted that more Canadians have access to retirement planning tools. However, with our financial wellness expert hats firmly in place, we know that more is needed. Not all tools are equal. Tools and other financial wellness support must be effective, accessible and reliable.
The best tools enable users to include multiple and user-specific data points, (retirement goals, earnings, assets, contributions, savings, expenses, income sources, housing costs, debts, retirement age, dependents, and fees) and they are driven by reliable and accurate economic assumptions (rates of return, inflation, healthcare costs, public pension benefits, income taxes, and mortality, among others). As few Canadians can accurately provide much of this information, the tool provider should be leveraging their knowledge, expertise and experience to populate as many fields for the user as possible.
For plan sponsors and others who make financial planning tools available to employees and plan members in the workplace, attention should be given to aligning tools with retirement and savings plan objectives and ensuring they reflect the unique characteristics of the workforce – demographics, career stage, language, and financial literacy.
Retirement planning is evolving. With greater emphasis on member engagement, regulatory compliance, and the integration of robust, user-friendly and personalized tools, we can empower better retirement outcomes for Canadians.
GO with Eckler is a quarterly newsletter to help employers and plan sponsors support financial wellness for their employees and plan members. Please contact your Eckler consultant if you want to learn more about supporting financial wellness in your workplace.
To learn more, get in touch with our Financial Wellness team.
