they’ll be in their job to the bitter end, while a growing number of the rest of
us believe retirement is getting further and further away.
The survey from HSBC Bank Canada provides a glimpse into how Canadians
perceive their future and it appears to be filled with work. The numbers add up
to the average working person expecting to retire at 63, up from the 61 of their
“We believe Canadians just didn’t anticipate the financial obligations when
they truly retired, some of the key findings support this,” said Jocelyn Hsiung,
head of HSBC branch networks in British Columbia. “Perhaps if they have not
planned for retirement, and they started quite late, they find it quite
surprising towards the age they really want to stop working that financially
they might not be ready.”
The survey found 54% of today’s retirees say their preparations were adequate
but 40% say they did not prepare well enough and of that group that doesn’t have
enough money, 40% only came to the realization after they retired.
Perhaps then, it’s not surprising that 17% of the people not fully retired
say they will never be able to quit working. Part of the problem seems to be
while 72% of retirees experienced a fall in income, only 48% had a similar drop
“At the time of retirement, they find they have different obligations such as
medical, nursing care and longer life expectancy,” said Ms. Hsiung. “They other
thing they don’t consider is other family members. When Canadians retire, we
find they have other financial obligations.”
HSBC found 14% of people were funding a dependent in retirement while 32% of
people not fully retired made the same claim.
Those expenses are no doubt playing a part in the increasing debt levels of
seniors. An Equifax Canada Inc. report issued last month showed average debt for
consumers aged 65 and over climbed 6.5% in the second quarter over the previous
year, the biggest year-over-year increase in the period for any age group.
Doug Jones, senior vice-president and trustee in bankruptcy with BDO Canada
Ltd., said the low interest rates have proved tempting to seniors, then opted to
work longer instead of considering budgeting discipline that would allow them to
retire without any debt
I’ve had people say to me they are never going to retire. I’ve had seniors tell
they me they just can’t retire. I did a consumer proposal for a person today who
is 65 years of age and he’s planning on working for at least the next five
years,” said Mr. Jones
So you work a little longer? Marcel Boyer — who wrote a paper recently for
the C.D. Howe Institute that said if you consider the differences in how we age,
a 65-year-old today is like a 60-year-old in the 1950s — says everybody needs to
start thinking about second careers.
“There are two groups, some don’t retire because they don’t have financial
means and the other group just wants to keep working,” said Mr. Boyer. “The
solution is maybe you retire at 70 to 75.”
He thinks there needs to be a general rethinking about work to accommodate
people who might just be tired of doing the same thing they’ve done for 35 or 40
“They might need something to complete them for the 15-20 years after they
reach 55, but right now the system is not geared towards educating that type of
person,” said Mr. Boyer.
Doug Porter, the chief economist with Bank of Montreal, says the evidence is
already showing up in the labour data that people are working longer.
“Every month when the labour force numbers come out we have a new record
level of people 55 and over [working]. The participation rate for that group has
been screaming higher in recent years,” said the economist.
Mr. Porter cautions that while retirement has been lauded as a goal, it
remains a relatively new phenomenon. “You go back in history and retirement was
a new concept. People used to retire for a year or so when life expectancy was
in the 60s,” he said.
The chief actuary for Morneau Shepell, Fred Vettese, says many of the people
worried they won’t have enough money probably have too-high expectations of
their future needs.
Working years might stretch out a bit but Mr. Vettese says there is no excuse
to “never” retire. “All the surveys show after retirement people are not as
concerned about their financial means as they were before retirement,” he
Source: www.FinancialPost.com Written by: Garry Marr
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