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Reinventing Retirement in Canada: Does Living Longer Mean Working Harder?

By Shannon Lee Miller

Published January 5, 2018 • 3 Min Read

Canadians are enjoying longer, healthier lives, and for many, a lengthier retirement can offer both new challenges and possibilities.

OECD data reveals that Canadians can now expect to live an impressive 18.7 years past their 65th birthdays — almost two decades beyond traditional retirement age. While the prospect of a long retirement may cause increased financial pressure for some, many active older adults are looking at their later, greater years through a new lens to finding creative ways to enjoy life and extend income.

Transitional Retirement

Bidding farewell to a firmly-established career often doesn’t mean leaving the working world behind entirely. Retirement can be an excellent time for seniors to capitalize on good health and pursue part-time employment, self-employment, or monetize their hobbies.

A 2014 Statistics Canada analysis shows that 60 percent retirees, ages 55-59, who left the workforce between 1994-2000 were re-employed within a decade. This transitional approach to retirement can offer workers a flexible, enjoyable way to supplement pension income while providing social interaction and intellectual engagement.

According to a 2015 YWCA survey, the social and emotional rewards of returning to work may be even more important to seniors than the financial benefits. The study shows 53.2 percent of women and 34.3 percent of men working over 65 chose to work part-time and of those, over 90 percent were working voluntarily.

Delayed Retirement

When confronted with the financial pressures of longer retirement years, many workers are opting to delay their exit from the workforce altogether.

The government’s most recent, “Action for Seniors Report” shows that the participation rate of seniors in the workforce more than doubled between 2000-2013, increasing from 6.0 to 13.0 percent. A 2016 Canadian Payroll Association survey reveals similar trends toward deferred retirement. It found that almost one-half of employees (45 percent) expect that they will have to work longer than they had planned five years ago to sustain themselves in old age.

While the growing practice of delayed retirement could pose challenges to workers and employers alike, a multigenerational workplace may also provide great benefits. For seniors, enduring a few more years on the job may provide economic stability and prevent workers from accessing OAS and private pension benefits prematurely. For employers, older professionals can offer valuable experience and mentorship to younger employees.

Downsizing and Relocating

For many older adults, downsizing and relocating can be excellent ways to kick start the retirement years. Downsizing can help sellers pad their nest eggs and also, give them the freedom to them to settle in a space better suited to their needs. Others choose to start the next chapter of their lives abroad, joining a growing number of older expatriates relocating to countries where the economy and the climate promise comfortable living.

Many retirees aren’t just planning to downsize, they’re relying on it as a major source of income. According to the Canadian Mortgage and Housing Corp more than 71 percent of the population between the ages of 55-64 own their homes so this could mean an equity gain for those who sell.

Other active seniors opt to live more affordably abroad while still receiving CPP and OAS benefits. Several nations offer attractive incentives for retirees looking southward including discounted medications, reduced airfares and affordable entertainment.

The landscape of retirement in Canada is changing. As healthy, active baby boomer and senior populations both grapple with and capitalize on the ability to remain in the workforce longer, non-traditional forms of retirement are beginning to emerge. Aging Canadians are finding creative ways to reconcile the financial challenges of longevity with the desire for an enjoyable, enriching retirement.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

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