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CPP, along with Old Age Security, is merely one of three pillars of Canada’s retirement income system, the others being workplace pensions and personal savings. Certainly, the expanded CPP should not be used as an excuse to avoid saving or investing. Millennials are already more risk averse than prior generations, in part because they came of age during the global financial crisis of 2007-2008.

Stock market

They aren’t confident about their ability to invest in the stock market: which is why they need financial advisors. This is doubly so because, as Machin also pointed out, the general climate of retirement pessimism is exasperated by the fact “private sector defined benefit pension plans have virtually disappeared from the Canadian retirement landscape.” As we pointed out last week in this space, this has forced many retirement savers to become stock market investors despite lack of basic investment knowledge.

Despite their apparent pessimism about the long-term viability of CPP, in actual practice Canadians’ actual behavior indicates a bit more confidence than they let on: 42 per cent of working-age Canadians expect to rely on the CPP when they retire (up from just 13 per cent 15 years ago).

In 2016, more than half of Canadians who are actually receiving CPP said they rely “to a great extent” upon it, as they no doubt also rely on OAS once it’s available at age 65. Despite this growing expectation of reliance on this first retirement pillar, Machin identified another “disturbing” trend: “Canadians are becoming less confident in their own ability to plan and save for retirement beyond the CPP.”

This is where Machin appealed to Advocis members to help address the “confidence deficit” and walk clients through the basics of Canada’s retirement income system, with CPP at its core. They should “nudge” Canadians to build on the solid foundation CPP provides by adding personal savings. “Canadians still need to save and still need your help doing so.”

Jonathan Chevreau is founder of theFinancial Independence Huband co-author of Victory Lap Retirement. He can be reached atjonathan@findependencehub.com