Is it time to retire our concept of retirement?

by | Apr 18, 2024 | Finance and Business

With high inflation and cost of living increases taking a bite out of personal savings, many Canadians are reconsidering what their retirement may look like.

The traditional retirement age was established in the 1960s when post-retirement life expectancy was much shorter than it is today. As a result, we need to make our retirement income and savings stretch further and last longer. Many wonder if we can still afford to retire, and, if so, when.

There is a lot of data to help us answer this question, and there are people whose job it is to analyze it. That includes actuaries, risk-assessment professionals who typically advise on things like government policy on pensions and insurance. Here is what they have found.

From 1966 to 2016, the average life expectancy for Canadians at age 65 increased by around six years. As a result, more people are working longer to compensate. Since 2000, the percentage of men aged 65 to 69 still working has more than doubled, and it has more than tripled for women. Countries like the Netherlands, England, the United States and Japan have even begun to extend the normal retirement age past 65 – but Canada has not. At least not yet.

Changes to the eligibility age for programs like the Canada Pension Plan, Old Age Security and RRSPs could be made to encourage Canadians to stay in the workforce longer.

Many workers, for their part, are willing to consider it. According to a recent Statistics Canada survey, more than half of Canadian workers aged 55 and older would put off retiring if they could reduce their hours or the physical and mental demands of their work.

Employers have not typically embraced the idea so far. In general, employers have preferred to attract and retain younger workers who they consider less likely to leave. But if workforce challenges continue, they may have to rethink their concept of retirement, too.

It’s a complex issue that is unlikely to go away soon.

You can learn more at cia-ica.ca

Related Content

4 tips for helping your kids buy a home

4 tips for helping your kids buy a home

With housing affordability shifting dramatically for a generation of Canadians, many hopeful homebuyers are turning to the “Bank of Mom and Dad” to help them secure their first home. While it’s natural for some parents to want to help their kids get a leg up in the...

read more
5 tips to get action on a consumer complaint

5 tips to get action on a consumer complaint

We’ve all experienced bad service at some point. While we have our thresholds of what we’re willing to tolerate, sometimes issues go beyond high prices or impolite customer service. If a company ignores their policies or doesn’t follow the rules, by overcharging you...

read more
Advice to help you pay off your mortgage faster

Advice to help you pay off your mortgage faster

Looking for ways to pay off your mortgage faster? Even small steps over time can make a big difference in how long it takes you to become mortgage-free. You’ll typically have opportunities to make changes to your mortgage that can help. Some of them you can make at...

read more
A new incentive to green-up your fleet

A new incentive to green-up your fleet

With companies increasingly focused on environmental, social and governance best-practices, looking for ways to reduce their carbon footprint is a top priority for many of them. But investing in green products and materials often costs more than the conventional...

read more
5 tips to keep your farm animals safe

5 tips to keep your farm animals safe

During escalating challenges such as wildfires, flooding, extreme temperatures and the threat of viruses, the well-being of your animals is important. From comprehensive emergency planning to biosecurity measures and careful feeding practices, here are five tips to...

read more