INDEPTH: RETIREMENT
Retirement may not mean retirement
by Peter Hadzipetros, CBC News Online | Research: Laura Carlin | Feb. 11, 2005
The notion of ending your working days with a period of leisure called "retirement" is relatively new. It goes back to the 1880s and German Chancellor Otto von Bismarck. He decided to reward workers who reached the age of 65 with a state pension.
Back then, most Germans could expect to live to the ripe old age of 45. Not many collected.
But the notion caught on and evolved and in much of Europe generous state pensions and retirement by 60 became the norm in the 20th century.
Working seniors
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More than 300,000 Canadians 65 or older worked in 2001
57% were 65-69
26% were 70-74
17% were 75 or older
Source: Statistics Canada
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It might not last. Early retirement may be on the ropes.
In Canada, the average retirement age bottomed out in the late 1990s, as downsizing and cutbacks hit both private and public payrolls.
By 2002, the average started going up again. There's some evidence that trend is likely to continue.
A recent study commissioned by TD Waterhouse found that two-thirds of people polled who have not retired are stressed-out about retirement investing – mainly because of uncertainty or a lack or money.
But the remaining third – the ones who said they weren't stressed – said they planned to be working past the traditional retirement age of 65. And three-quarters of those said they would be doing it by choice.
At 71, Anna Delville, works a part-time job selling lottery tickets in Hamilton, Ont. (CP PHOTO/Simon Wilson)
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The Canadian economy's going to need them. All those retiring boomers combined with a smaller group of the baby bust generation in the labour force is expected to lead to pronounced labour shortages within 15 years.
At Inco, the signs are there already. Within the next five years, 25 per cent of the company's workforce will be eligible to retire.
"How do you as a company continue to lose that amount of human capital?" Inco's John Zurbrigg told CBC News Online. "If we can find a way to engage those who want to keep their hand in it, to some extent, we'd be better off."
Zubrigg has put in 36 years at Inco, most recently at the corporate office in Toronto. He saw a need, so he helped design a phased-in retirement program – and became one of the first to take advantage of it.
Ranks of working seniors growing
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Between 1996 and 2001, the percentage of working seniors jumped by 20%
Between 1996 and 2001, the total population of seniors increased by 11%
Source: Statistics Canada
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"A number of years ago, I said 'I worked hard all my life, but I said what am I going to do with that free time?' Having worked in human resources, I've seen a lot of it. Some people are OK with just stopping work and having a lot of free time. Others are not."
"My wife was a little concerned with the prospect of having me around the house with not much to do."
Phased in retirement allows you to get used to having more time on your hands – and getting by on a pension. You're working less – and getting paid less. Zubrigg is working about half-time, on selected projects.
He's taking golf lessons to get reacquainted with a game he played years ago. He's also looking forward to reading material that's not related to work. And – yes – he plans to travel more.
In Vancouver, opportunity came knocking on Ross Gentleman's door. Opportunity, but no plan.
Ross Gentleman
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Gentleman is the former deputy superintendent of pensions for British Columbia. When he was offered a chance to take part in a "voluntary departure program," he decided that at 55, his freedom might be the chance to do something else. Exactly what, he wasn't sure.
"There was certainly some apprehension on my part and stress within the family," Gentleman said. "That's part of change. You can get hung up on the risks, or you can get up on the opportunities."
He's keeping busy doing some consulting work, mostly for non-profit organizations.
There is a market for the skills people like Zurbigg and Gentleman take with them as they ease into retirement. It's rarely the same for people who work in heavy industry – unless they've planned ahead and developed other skills.
The Canadian Association of Retired Persons recently commissioned a study on older workers. It made several recommendations on ways employers can hang on to older workers. Among them:
- More part-time work arrangements.
- Offer more training to older workers so they can upgrade current skills or acquire new ones.
- Offer phased-in retirement.
- Offer older workers retirement with the option to be called back to work full- or part-time.
The study also said organizations will need to consider offering incentives to persuade people to work longer rather than fully retire. Some of those incentives could be better pay, more vacation time and improvements to the pension plan.
Statistics Canada crunched some numbers on the topic as well and found that about a third of the recently retired would have been willing to remain in the workforce – at least partially. But they wanted some incentives, like flexible working arrangements and changes to the pension plan to recognize alternative working arrangements.
It also found that choices for continued employment later in life are likely to improve for the more highly educated generation of baby boomers, as the economy continues its shift from the production of goods to the provision of services.
John Zurbrigg's experiment with phased in retirement is scheduled to end on June 1, 2005. At 61 and with 36 years at Inco, he's reaching the point where he would normally be retired.
"I'll sit down with the company and both sides will figure out if this arrangement will continue," Zurbrigg said.
"It isn't easy to let go. You have to work at it."
» NEXT: WHAT IF – YOUR PENSION PLAN CAN'T DELIVER
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Britain to raise retirement age (May 25, 2006)
Richmond tops life expectancy list (CBC BC, Feb 2, 2005)
Canadians made little economic headway in past 15 years: TD economists (Jan 18, 2005)
Pension legislation changes on the way (CBC Manitoba, Dec. 7, 2004)
Ontario court upholds CPP benefits for same-sex couples (Nov 26, 2004)
Mandatory retirement ban won't be retroactive: labour minister (CBC Ottawa, Nov.3, 2004)
Martin against mandatory retirement (Dec. 20, 2003)
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