Boosting Retirement Readiness and the Economy Through Financial Advice

The Conference Board of Canada, 45 pages, September 22, 2014
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This report examines how financial advice can boost household savings, leading to better retirement readiness and improved economic prospects in the long term.

Document Highlights

Population aging is raising questions regarding retirement readiness and also resulting in slower potential economic output growth. In the report Financing the Future: Economic Benefits of Addressing Retirement Readiness, the Conference Board reviews the literature that examines the link between individuals gaining financial advice and their savings and investment decisions. Based on the information gathered, the report then examines the long-term impacts of increased savings on the economy, using a national economic model to quantify the impact of increased savings on a wide range of economic variables over a long-term forecast horizon.

In conclusion, the Conference Board found that financial advisors can increase individual saving rates; higher savings would help to alleviate retirement readiness concerns while also boosting potential economic output; and while an increase in domestic savings can lower real GDP in the short term, it results in economic gains over the longer term.

Table of Contents

Executive Summary

Chapter 1—Introduction

Chapter 2—Literature Review

  • Link to Retirement Readiness: Benefits of Financial Advice
  • Link to Potential Output: The Relationship Between Domestic Savings and Investment

Chapter 3—Methodology

  • Evaluating Savings and Income Across Age Cohorts
  • Long-Term Income Projection by Age and Type of Saver
  • Calculating the Change in Long-Term Savings
  • Assumptions Used in Economic Impact Simulation

Chapter 4—Results

  • Medium-Term Impacts
  • Long-Term Impacts

Chapter 5—Conclusion

Appendix A—Summary Tables

Appendix B—Bibliography

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