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Importance of Planning

Retirement is an important event with financial and psychological consequences for employees, productivity implications for the employer and social implications for governments. Clearly, people should prepare themselves properly and analyze the consequences of the choices that are presented.

Employees should plan their retirement so that they know what they want to do after they retire, the standard of living they wish to maintain, and the benefits and protection they will keep or lose. [¹⁶] It is very important to properly analyze the financial impact before deciding whether to retire, as well as before deciding whether to retire before, at or after the normal retirement age, whether to leave work abruptly or gradually, and whether to return to the labour market after retirement. Because the retirement income system is an integrated one, pension amounts are coordinated with one another.

Employers must help their employees to prepare for retirement. It may be important to plan for succession and, depending on the circumstances, to offer attractive alternatives to workers to maintain the desired level of production and to take the greatest possible advantage of the experience accumulated by older workers.

Governments should sensitize employers and employees alike to the need to prepare for retirement, promote the availability of a broad range of retirement options to meet the needs of employers and employees, and encourage and facilitate employer pension plans in order to allow the greatest number of workers to maintain their standard of living.

[¹⁶] Examples of possible effects on employee benefits are described in Chapter 6 of the study Collective Agreements and Older Workers in Canada on this website. return