The rapid aging of the population in Canada generally and in Atlantic Canada specifically raises a number of important societal and economic issues, as well as perhaps opening up the discussion about the concept of retirement in its current form.
To put it in perspective, in less than 10 years there will be a quarter-million more Atlantic Canadians aged 65 years or older (and nearly 60,000 more in Newfoundland and Labrador) of traditional retirement age than was the case in 2015, an increase of nearly 60 per cent over in the region (61 per cent in Newfoundland) in only a 15-year span. The percentage of the population 65 years or older will increase from 19 per cent of the population in that time span to 32 per cent in Newfoundland based on median population projections by StatsCan. Atlantic Canada already has the highest percentage of retiring age population in Canada. That gap will widen even further by 2030. For the most part, this retired age cohort is healthier and more active than their predecessors and living longer as a result. Indeed, longevity is an increasingly important consideration in financially preparing for retirement for all Canadians.
The previous federal government under Stephen Harper had sought to address this issue by increasing the retirement age from 65 years old to 67 years old, no doubt cognisant of the increasing costs associated with the Canada Pension Plan (CPP) and Old Age Security (OAS), as well as the pending labour crunch due to retiring baby boomers. The current government reversed that decision, which in my view was unfortunate for a number of reasons.
Retirement is a time of transformation, as well as a time for personal reinvention. Most plan for retirement only financially and with longevity a growing challenge, this is a critical consideration. A common rule is that you need 80 per cent of your pre-retirement household income to maintain your current lifestyle. It may be the reason some of retirement age are working longer. Is 70 years old the new 65 for those of working age?
The concept of retirement has always been about enjoying the golden years after a life of hard work. Too many Canadians spent too much of their time anticipating retirement and not enough time preparing for it — either financially or psychologically. Being psychologically prepared for retirement may be just as important. Many retirees find themselves adrift with not enough purposeful activities to keep them stimulated or mentally healthy.
Many view their retirement as an opportunity to fulfil life-long travel dreams that had been postponed, only to find that opportunity limited by health concerns and/or financial capacity. Certainly spending more time with family and friends is possible, especially for those with grandchildren to spoil. But it still raises one of the great considerations for those who have worked so long to retire; what purpose do they now have, having had a clear purpose most of their working life leading up to retirement.
The loss of social connection from co-workers and a diminished social circle is often under-recognized as one of the negative outcomes of retirement. There are many opportunities for those retiring to achieve purpose in their lives, especially through volunteer activities and spending more time with family and friends. But for those who have spent most of their working lives as valued members of society, replacing that sense of personal value after retirement may be more elusive.
For some, it leads to a questioning of self-worth and relevance.
This brings up the issue of mandatory retirement at a specific age for certain occupations. Clearly there are occupations where this makes sense, especially in occupations where certain skills may deteriorate with age (surgeons for example or airline pilots). But for many more, mental competence should be the determinant for when people should retire.
I completely understand that many of those who reach the age of retirement have no desire to work beyond that time, indeed, it is likely that the majority would have this sentiment. At the same time, there is likely a significant minority of those who have reached 65 years who feel both willing and able to continue working. In fact, given the increasing skill shortages in the labour force and the high percentage of those leaving the workforce over the next decade, there is a real need to convince many who are about to retire to remain in the labour force longer.
I have not retired, only been re-purposed in life. I believe that you shouldn’t retire from something, but retire to something.
Employers who wish to retain skilled and knowledgeable workers beyond their retirement age will need to develop innovative strategies, including having more flexible work arrangements that might include working full-time but fewer hours (half days or fewer days per week), working only during certain periods of the year or working from home. The ability to retain some of the existing workforce will be key to dealing with labour shortages over the next decade or so.
Many people have asked me how I am enjoying retirement since I sold my company a little over a year ago. I always respond that I have not retired, only been re-purposed in life. I believe that you shouldn’t retire from something, but retire to something. Rather than just becoming elderly, I prefer to become an elder in my family, wise and experienced, available to help and offer guidance (but only when asked).
The blend of investing in new business interests, writing this column and being able to exercise with more regularity keeps me charged up. Pursuing hobbies such as playing the guitar and travelling have left me feeling a sense of satisfaction. Continuing to be actively involved in community organizations and having more time for my family and friends keeps me feeling more than fulfilled and repurposed. What is your plan when you reach your retirement age?
Don Mills is the former owner of Corporate Research Associates and a recognized expert in data trends in Atlantic Canada. After selling his business 12 months ago, he remains passionate about data — and learning the guitar. He can be contacted at [email protected] or on Twitter at @donmillshfx
