A return to college life
Adjusting to the demands of college life isn’t a concern just for exuberant young students embarking on their first post-secondary academic exploration. It’s fast becoming the trend among retirees too. They’re heading back to campus with lofty study aspirations and notions of stimulating social engagement.
College-bound retirees have specific goals in mind. It’s not enough to sign up for a few simple courses; they want much more, and it’s all part of a thriving retirement plan. Instead of slowing down and downsizing to traditional seniors’ accommodations, many boomers are setting out in the opposite direction. They’re going back to school to complete a bachelor’s or graduate degree and some are even considering permanent housing on or very close to campus.
The hectic course loads, full-study schedules, dormitory living, pub visits and football games can define the daily routine of a college student. Older adults who fondly remember similar college experiences want to turn back the clock to invigorate their lifestyle.
Campus retirement housing?
Intergenerational retirement housing could be part of the new retirement trend. Living and studying among much younger students is being dubbed the “campus retirement plan.” Sound far-fetched? The idea is already gaining traction in the U.S., where approximately 60 on-campus senior housing developments have been built at several prestigious schools including the University of Michigan, Stanford, Dartmouth, Notre Dame and Oberlin.1
It used to be as people aged, they would begin to consider simplifying their housing arrangements in exchange for direct access to assistance with the activities of daily living. For many boomers heading into their retirement years, that’s still a concern, but the value of traditional age-restricted retirement communities may be starting to diminish.
Builders, real estate developers, and college campuses here in Canada are starting to talk about a collaborative approach to providing new retirement options. If we’re only as old as we feel, a return to school may be the key to achieving a more energized lifestyle.
Learning in retirement – it’s popular!
Canadian retirees who aren’t pressured by family and work obligations find the educational environment appealing, especially if they’ve achieved some measure of prior achievement. A survey by the Canadian Network on Third Age Learning revealed that more than 60,000 Canadian adults older than 65 years are actively involved in lifelong learning programs.2
Chances are, if boomers are thinking of revisiting college life and taking a course or two, they’ll be joined by many of their peers. Maybe they’ve got more time on their hands and they’d like to pursue a graduate degree. Maybe they just want to expose themselves to new ideas and stimulating discussion by attending a few lectures. Whatever the reason, it’s a great opportunity for you to connect with potential clients who are educated, motivated and affluent.
Research the mature student discounts
Many universities recognize the growing number of mature adults who want to participate in formal education after retirement. It’s now common for many colleges to waive academic fees for seniors for a maximum of one non-professional graduate or undergraduate degree. This could be a substantial saving considering undergraduate students, on average, paid approximately $5,772 in tuition fees last year.3
Remind your clients to look into the discounts and fee reductions before enrolling in a program because fee waivers aren’t offered at every institution. Even without the cost of tuition—the transportation expenses, book purchases, and school supply costs will add up. Clients might need to plan for the impact learning goals could have on their finances in retirement.
Even if the goal is simply to stay sharp and connected to an active lifestyle, there are more benefits to returning to school after retirement than older adults may realize.
Canada’s Lifelong Learning Plan (LLP) program is one option mature learners may want to consider. The Department of Finance introduced the LLP almost two decades ago to encourage older adults to pursue post-secondary education opportunities.
Basically, it allows investors to withdraw up to $10,000 per year from their registered retirement savings plans (RRSPs), without jeopardizing the income tax deferment already accrued under the RRSP plan. Any withdrawal must fund mature students’ education or their spouses’ education.
Did you know?
The criteria for participation in the LLP include the following:
- The withdrawal must be repaid within 10 years,
- The maximum amount of a total withdrawal is $20,000,
- Starting the fifth year after the first LLP withdrawal (or during the second year in which students have not been attending full-time for at least three months), the borrower must start repaying the money back into their RRSP,
- When they start paying back the withdrawal, 10 per cent of the total amount that was withdrawn is due every year, and
- Eligibility for participation in the LLP concludes at the end of the year in which a person becomes 71 years of age.
It’s not surprising that universities are attracting more applicants from older generations. Between 2002 and 2004, LLP withdrawals increased by 17.5 per cent.4
Lifelong Learning Plan, participants and withdrawals, Canada 2002–2004
According to the Canadian Council on Learning post-secondary education report, Canada’s baby boomers will be the most educated group of seniors this country has ever experienced.
Combining educational pursuits with financial security
If you know many retirees are thinking as much about their retirement lifestyle as their financial security, you can prompt discussions about retirement planning in a way that considers the value of educational pursuits combined with asset protection, generating income and balancing investment mix.
|Year||Number of participants||Total value of RRSP withdrawals||Average withdrawal|
Retirement is a major life event, meaning different things to everyone. Now is a good time to start the conversation with your clients by showing the Money for Life – Lifestyle needs whiteboard video, which highlights how you can help them see their retirement vision and present options to pay for their lifestyle goals.
2 Valerie Peters, Working and training: First results of the 2003 Adult Education and Training Survey, Table A.7b (Ottawa: Statistics Canada, 2004), Catalogue no. 81-595-MIE—No. 015.
4 Canadian Council on Learning, Post-secondary Education in Canada: Meeting our needs?
(Ottawa: February 2009),160 page(s).
5 Chantel Colin and Kevin Kerr. Recent Federal Investment in Post-secondary Education and Training (Ottawa: Library of Parliament, September 2006); Canada Revenue Agency.