Street signs displaying Work & Retirement

The Realities of Retirement Planning in Canada

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According to the recent RBC poll on Retirement Myths & Realities, Canadian’s expectations of retirement planning in Canada and the reality of their actual retirement objectives and goals have many major conflicts.

Here are some highlights from the poll that compare retirement planning “Expectations” with “Reality.”

Social Time Missed More Than Regular Paycheques

Expectation: Nearly half of the Canadians polled say they will miss their paycheques after retirement, when in reality, only about 26%1 say they do.

Reality: What Canadians actually miss most after retirement is the social interaction with co-workers – in fact, over half of retired Canadians say they miss the social outlet more than they miss their paycheque.

Time For Self Tops Travel Expectations

Expectation: The top expectation of how Canadians think they will spend their time after retirement is doing more travel.

Reality: In reality, as many as 7 out of every 10 Canadians say they travel less and actually spend more time “taking time for myself.”

Most Canadians Don’t Choose Their Retirement Date

Expectation: Approximately 80%2 of Canadians think they will choose their own retirement date.

Reality: The facts reveal however, that as many as 43% of Canadians won’t get to choose their retirement date.

  • 48% of Canadians retire earlier than expected
  • 46% of Canadians retire when expected
  • 6% of Canadians retire later than expected

There are several reasons for this including health, costs of living, the need to take care of a loved one, or depending on the employer’s request.

Canadians Worry About Financial Costs After Retirement

If you are worrying about how you will pay all your bills while supporting your lifestyle after retiring you are not alone.

Expectation: Just less than half of the Canadians polled (48%) say they worry about their money lasting their lifetime.

Reality: In reality, Canadians vary on how they feel about their financial position:

  • 38% feel they have enough to do everything they want
  • 44% feel they can live comfortably but without room for the “extras”
  • 18% feel they are just making ends meet

Retired Canadians Will Spend Around $2400 Per Month

Retired Canadians need approximately $28,8003 per year after retiring. This total retirement income includes:

  • Living expenses
  • Food
  • Travel
  • Entertainment
  • Medical expenses

Many retired Canadians also take on extraordinary purchases during retirement including buying a new vehicle, renovating their home, or giving large amounts of money to family members.

Why Is Retirement Planning in Canada Important?

Retirement represents an important life event that you need to seriously think about and prepare for.

Whether your retirement comes exactly when you expect it to or if you should retire earlier or later than expected, the fact of the matter is, you should work with a chartered retirement planning counsellor that can provide you with good solid advice.

Are you a baby boomer nearing retirement and needing some more concrete answers about financial retirement planning in Canada? Let us help you understand why retirement planning is important.

Call Edmonton’s Benefit Strategies at 1-780-437-5070 to speak with one of our retirement planning counsellors and advisors about early retirement planning for small business owners or for individuals.

Businessman with his finger on the word BENEFITS

How Are Benefit Brokers Paid?

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A common question we get asked is, “How are Benefits Brokers paid?

Benefit Strategies has been helping employers with benefits management services for over three decades and this question is more common than you might think. Call 1-780-437-5070 to speak with one of our Benefit Brokers today.

Our potential clients are often curious at how we get compensated for researching, recommending, and implementing a workplace benefits plan for employees. There are two basic pricing models that can be followed:

  1. Commissions Based Compensation
  2. Fee Based Compensation

Commissions Based Benefits Brokers

The majority of benefits brokers in Edmonton (and Alberta) are commissions based. This means they are paid a small percentage of the premiums paid to the insurer. This is usually built right into your benefits premiums. Commissions can vary from flat to graded rates depending on the insurance company.

  1. A flat rate commissions based benefits broker simply receives a percentage that does not vary with usage or time of use.
  2. A graded rate commission varies by dollar amount, for example:

12.5% for the first $5,000
9% for the next $69,000
7.2% for anything beyond $75,000

Fee Based Benefits Brokers

Fees based benefit plans are typically used for larger client accounts where an hourly fee for brokerage services is more appropriate. Any fees based plan is approved in writing prior to any charges. Sometimes Commissions and Fees Based pricing are used together.

Other Ways Benefit Brokers Are Paid

Contingency Income – A criteria based fee structure is what we call contingency income. Many benefits brokers will have this type of contingency income arrangement with any insurer that qualifies them for payment once certain criteria are met. This is normally calculated on an annual basis.

It can be hard to pinpoint how much your specific policy may help your broker earn. In general, contingency income payments depend more on the overall performance of the broker and their ability to keep their clients happy, rather than selling one specific employee benefits plan.

Supplemental Commissions – These are becoming more common and are starting to replace contingent commissions in some instances. Supplemental commissions are “fixed payments” established annually, based on historic performance. In the employee benefits industry, benefits brokers refer to these as “Guaranteed Supplemental Commissions” or GSCs.

From time to time, employee benefits brokers can also receive alternative compensation and benefits from insurance companies in the form of promotional events, products, training, and so on.

Our Edmonton Benefits Broker – Worth Every Penny

A good benefits broker will truly add value to your employee benefits plan.

At Benefit Strategies Inc., and at other trusted Alberta brokerage firms, you can expect your benefits broker to help with:

  • Presenting your workplace benefits plan to various insurance providers
  • Comparing the Pros and Cons of various employee benefits plans
  • Setting up the chosen benefits plan
  • Negotiating employee benefits plan’s renewal

Above and beyond services that we offer may include customizing communication for your staff (and raising awareness for the employee benefits plan), help with cost containment, and compare your benefits plan against other employers in your industry.

You can also complete our quick Contact Form through our website to get in touch with us.

Contact our Employee Benefits Plan Brokers

If you have more questions about how our benefits brokers are paid or wish more information about employee benefit plans call Benefit Strategies at 1-780-437-5070 or us an Email.

Young professional millennials smiling.

Why Employee Benefits Are Important

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Do you know why employee benefits are important?

If companies do not offer benefits as part of their overall attraction and retention strategy, what type of employee are they looking to attract? Most companies are looking to hire young, long-term employees they can build the future growth of their organization around and vice versa.

What are these employees looking for? Whatever it is, you can best believe they know why employee benefits are important. Hays 2014 Compensation, Benefits, Recruitment and Retention Guide says that when a candidate makes the decision to accept or decline a position, nearly 20% of that decision is based on the benefits they are offered.

Employee benefits are important and are becoming the new standard among employers seeking talented individuals in today’s job market. With growing families, employees want a health and dental plan along with the security of disability benefits and life insurance. However, it doesn’t stop there. Employers are tuning in to why employee benefits are important and offering other incentives including the following:

  • Performance bonuses
  • Group RRSP or Pension Plan employer match
  • 2 weeks vacation
  • Flexible work schedule
  • Ability to work from home
  • Healthcare Spending Account

Today, in Alberta’s economy, many employers struggle to find employees from a shrinking talent pool. To be competitive in recruiting the top talent the report recommends small companies focus on promoting cost-effective benefit plans, Healthcare spending accounts, Group RRSP contributions, Workplace Flexibility, and opportunity for advancement.

To find out more, call your Benefit Strategies broker at 1-780-437-5070.

Contact-Us

Capital Ideas logo

Benefit Strategies in Capital Ideas Edmonton

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[vc_row][vc_column][vc_column_text]What’s your biggest customer service challenge?

Chelsey Smith, marketing and communications director at Benefit Strategies Inc., recently shared her biggest customer service challenge at Capital Ideas’ Earned Media Workshop, which kicked off E-Town on September 11.

“The biggest challenge is keeping lines of communication open with companies – we rely on working hand-in-hand with human resources. It is often frustrating for employees to try to communicate with designated toll-free lines, or troubleshoot independently. We can alleviate that frustration, and provide a transparent and timely response.”

Here’s a snapshot of the publication with all the responses from entrepreneurs on what they’ve learned about serving customers well.

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Are you looking for a better experience when it comes to selecting and managing employee benefits in your workplace? Contact our Edmonton employee benefits broker at 780-437-5070 or arrange a free Consultation online.

We’ll help alleviate your frustration and provide the transparency Chelsey describes as part of our customer service experience.[/vc_column_text][/vc_column][/vc_row]

Employees in a board meeting.

When Should Your Key Employees Start Saving for Retirement?

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If your key employees are like most other Canadians they are saving for retirement and dreaming of the day they retire.

Pursuing leisurely activities such as travel, hobbies, volunteering, and spending more time with friends and family are likely at the top of their list when they are no longer tied up by the responsibilities of work. But without a steady paycheque will they be able to support their leisurely lifestyle – and what about unexpected expenses such as health bills?

This is why employee benefits and retirement planning is a must in order to make saving for retirement a possibility. Retirement planning is also a key Executive Benefit that your company can offer to help attract and maintain key employees within your workforce. Most employees find Retirement Plans important as many are not in the habit of regularly putting aside money for retirement.

Your employees also deal with the many costs of living expenses such as mortgages, education, raising children, food, and other unexpected expenses that often get in the way, preventing employees from properly saving for retirement, especially during their earlier years in the workforce.

The important questions then become paramount:

  • When should your key employees start saving for retirement
  • And how can you, as their employer, help with their retirement planning?

Here are three critical pieces of advice we’ve put together to help you explore the topic of employee benefits and retirement planning.

1. Help Employees Develop Good Retirement Saving Habits

Starting to save for retirement at a young age (even in very small increments) can help establish good lifelong saving habits.

Even though many employees find it much harder to actually do it, most do understand that every penny set aside for retirement early on definitely helps, allowing for the benefits of tax-savings and compounding interest.

As an employer, you can empower your key employees to start saving (even if it’s only small) for their future.

2. Keep Your Employees Informed with Retirement Planning Information

Your employees can also benefit from proper information and education in regards to saving for retirement. The big question for many Canadians is how much money will they actually need to retire? Helping them start to understand this number (and how they can achieve it) can help ease their worries and set them on the correct path of retirement planning.

The following outlines several factors that go into the financial influences that affect retirement savings. A good employee benefits and retirement planning specialist can help explain and incorporate these into an effective Retirement Plan:

  • Lifestyle choices
  • Monthly and annual expenses
  • Any additional accumulated savings
  • Any monthly pension income (through private or government sources)
  • Expected investment rate of return
  • Rate of inflation

Your company’s Employee Benefits Planner can provide useful retirement planning tools and can even advise you on the best ways to inform your workforce on retirement best practises.

3. Help Employees Plan for Retirement within 10 Years of Retiring

There are so many unknowns in your twenties and thirties that it can be hard to establish a formal retirement plan. Some of these unknowns include health, value of assets, rate of inflation, rate of return, and so on. This is why many retirement strategists will recommend that a formal retirement savings plan can come later in life when you are closer to retiring.

A general rule of thumb many people follow is to start seriously thinking about their retirement plan approximately 10 years before retiring and to formalize an official retirement plan 5 years before retiring.

This is when your company’s Employee Benefits Planner can step in and work with employees nearing the end of their career. Professional advice, accurate number crunching, and support through the retirement transition are very valuable to those gearing up to retire. For more information, call us at 1-780-437-5070.

Contact-Us

Graphic showing what motivates employees.

What Can a Flexible Benefits Plan Offer Your Employees?

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A flexible benefits plan for employees is tailored to meet employees’ unique personal needs.

A basic benefits plan offers employees a minimum level of employer-paid benefits such as:

  • Health
  • Dental
  • Accident
  • Disability
  • Life insurance

The plan is then topped up with “flex credits” (or a dollar amount), and put into a third party health spending account (HSA).

Employees can choose to use these credits to supplement their basic benefits coverage or to buy other kinds of benefits that may be more useful.

Typically, your third party administrator manages these taxable and non-taxable spending accounts and reimburses your employees as the employees incur expenses.

Flexible Benefits Plan Advantage

Also referred to as a “flex plan,” the customizable flexible benefits plan gives you (as an employer) a competitive advantage, and is often more highly valued by your employees than a traditional or fixed employee benefits plan.

The overall trend is for plan sponsors to move from traditional plans to a flexible one. There’s just one question to ask then. Is it time for you to switch to a Flexible Program in your workplace?

Factors to Consider

There are several factors to take into account when considering such a plan:

Flexibility: A flexible Benefits Plan is especially beneficial to workplaces with employees in every different stage of life. The benefit needs of a single 25-year-old male will be much different than a 38-year-old female with three kids at home, and different again for a 65-year-old male nearing retirement age. Flexible Benefits Plans allow your employees to use the benefits most relevant to themselves and their families.

Satisfaction: Employees feel empowered and in control when they get to choose how to spend their flex benefit plans. They will likely also feel like they have better coverage.

Costs: A Flexible Benefits Plan gives the employer the ability to control costs by setting benefit limits each year. This allows you to properly budget each month, and there will be no surprises come the end of the year.

Need More Information?

Are you second-guessing your “one-size-fits-all” employee benefits plan?

If you have questions or would to know how a Flexible Benefits Plan can help your employees, perhaps it’s time to talk our trusted Edmonton employee benefits broker, Daryl Smith.

Call Daryl Smith at 1-780-437-5070 or send him an Email.

You can also reach him through our online Contact Form.