Today’s job market looks tough for young people. Reports of unemployment and underemployment are common, and even for those who can find work that is rewarding, workplace pensions have gone the way of the VCR.
So how will an entire generation save enough money to retire comfortably?
Younger Canadians should consider the Canada Pension Plan as a foundation for their overall retirement strategy.
The most recent report by the chief actuary of Canada, released in December 2019, states the fund will continue to be sustainable for more than 75 years — long after today’s cohort of young workers retire.
Young people will also benefit from the government decision to form the additional CPP account. This additional account will provide enhanced future benefits for contributors through increased CPP payments beginning in several decades.
The strength of the fund is underscored by the recently released annual report on the fund’s performance. CPP Investments, the professional investment management organization that manages the fund, reported a record return of 20.4 per cent for the 2021 fiscal year, growing the fund by more than $87 billion to a total of $497.2 billion.
Thanks to a diversified portfolio designed to minimize short-term volatility and deliver long-term returns, the fund will be able to continue paying out to its beneficiaries for generations to come.
This is good news for young Canadians, who can count on the pension plan to be there for them when they retire.