One Canadian retirement advantage

By Philip Porado | December 18, 2013 | Last updated on December 18, 2013
2 min read

Nearly 44 million Americans go without health insurance, according to the latest set of statistics from the Centers for Disease Control in Atlanta. Think about that. A group of U.S. residents that exceeds the population of Canada by 11 million walks around every day without health coverage. And, as an American, I can attest a lot of people there stay in jobs they hate because they can’t take the risk of letting themselves or their families go without medical coverage. I know I did.

Take the numbers further. According to the Census bureau, roughly 77 million baby boomers reside stateside—a group more than twice the population of Canada—with many champing at the bit for retirement.

Several recent U.S. surveys indicate lots of boomers would like to retire early. But they choose not to. What’s stopping them is a healthcare coverage gap that would emerge between the time a worker leaves an employer that provides benefits, and the reaching of age 65, after which Medicare kicks in. Very few U.S. employers are willing to extend health coverage to fill the gap—unless the company is downsizing and needs carrots to dangle in front of potential retirees. Sure, Americans have the option to obtain private medical insurance during periods of unemployment, but those policies are expensive.

If you’re an advisor to one of Canada’s 8.5 million baby boomers, consider yourself lucky. You never have to have a conversation that starts with, “I’d like to retire but I need the health coverage.” So enjoy the built-in advantage that stems from advising clients north of the 49th.

At the same time, don’t overlook the benefits Canadians derive from their employers. Research conducted for our sister publication, Benefits Canada, found workers could be persuaded to stay on past retirement age if their current perks remained intact. A full 65% of survey respondents said they’d work beyond age 65 if they could maintain their prescription drug coverage, while 61% said dental plans would be an incentive and 55% viewed retention of employer-sponsored life insurance as motivation to stick around.

This research shows perks are a pull, and any clients opting to leave the workforce early will look to advisors to replace any benefits they’ll lose when they punch the clock that last time. Start learning about alternatives so that when a client says, “I’d like to retire,” you can respond by saying, “Okay, here’s how you’ll do that.”

Philip Porado