As baby boomers head toward retirement the insurance industry is grappling with tough questions about long-term savings.
In a speech to the Vancouver Board of Trade, Sun Life Financial Canada (TSX:SLF) president Kevin Dougherty said those headed toward retirement face circumstances that have created a perfect storm around financial security.
“Thinking back 15 or 20 years ago, the insurance industry was all about answering the question, ‘what if I die? Have I provided enough security for my family?’ Today the question is, ‘what if I live? Will I have enough money to live comfortably in retirement, and am I confident I have financial security that will last my lifetime?’” said Dougherty.
Aside from the fact that people live longer these days, Dougherty said pension reform, health-care concerns and economic shocks are just some of the issues baby boomers have to contend with.
As a result, the insurance industry has proposed the creation of a registered health savings plan, which would be a federal plan that would create a health spending account for Canadians that could be used to cover health-care costs.
Another solution would be the introduction of multi-employer pension plans for Canadians who are self-employed or work in the private sector and don’t have access to a workplace pension plan.
“Living longer should not be a burden,” said Dougherty. “Instead this should be an opportunity for us to step up to the challenges of making financial security a reality.”