Ask your clients when they intend to retire. You might get surprising answers, because various government and think-tank studies show more Canadians, particularly those employed in knowledge-industry jobs, aren’t planning to stop working at age 65.
Case in point: Statistics Canada’s most recent Labour Force Survey finds workers with post-secondary educations are, in particular, putting off retirement. While so-called involuntary retirements spurred by layoffs push down the aggregate numbers and prevent Stats Can from seeing the true picture, the data still show a gradual shift toward later retirement.
And, there are eco-demographic factors in play. Whereas workers a generation ago saw incomes peak during their 30s and 40s, Stats Can’s most recent Economic Well-being data finds both women and men in the Canadian workforce now make their highest wage gains between the ages of 45 and 54.
It’s not just Canada, either. Boston’s Center for Retirement Research also find that peak earning years happen later in people’s careers – with workers in their 60s earning 30 per cent more than a comparable employee in 1990.
Which means workers in their 50s and 60s are in an ideal position to bulk up additional retirement funds. Provided your clients are having similar experiences in the wage market, they have nothing to lose and literally everything to gain by staying in the workforce. Further, with recent statistics showing a growing number of older consumers increasing their debt loads, some of your clients may simply need the income.
Beyond money, many older workers choose to remain in the workforce for personal gratification. Feeling at the top of their game, these workers see the post-50 work experience as a time to pass wisdom to a younger generation of colleagues.
For my neighbour, Naim, a criminology professor at a large Ontario university, working past 65 reflects a combination of financial need and the desire to be a sage. When he immigrated to Canada from Iran, via Italy, in 1991, he was already in his mid-40s. With a projected 20 years left in the classroom, he knew he wouldn’t have enough time to accumulate sufficient retirement funds through CPP and OAS.
But he still made the unconventional move of forgoing contribution to his university’s pension plan, and instead used cash accumulated during his time in Europe to start investing in real estate. By 2000, he owned three houses and one eight-unit apartment building. In 2001, he sold one property and invested the gains in a fixed annuity. The combination of those monthly annuity payments, rental income and his nominal CPP/OAS earnings are enough to let the now 70-year-old retire.
Naim will have none of that. While he’s dropped his course load from six classes to two, he says the courses he does teach are pet projects – including one on the differences between real crime and its fictional counterpart. Staying connected to campus also lets him interact regularly with young PhDs, and mentor them on course design and classroom style.
And, he confides, the mortgage on his most recent property, purchased in 2007, still isn’t paid off. The extra income helps.
Philip Porado is a veteran Toronto-based journalist who specializes in financial and business topics. Prior to immigrating to Canada in 2004, he covered brokerage compliance, real estate, housing policy, architecture and technology for several U.S. publications.