Michael Hlinka: Retirement planning versus reality
- March 10, 2011 10:34 AM |
- By Michael Hlinka
It was about this time last year that Sun Life Financial asked Canadians a number of questions about retirement. One of them was: When do you plan to retire? The answer was unremarkable: 65. This is the age that people traditionally stopped working.
Okay, fast forward to this year. Same question is asked again: When do you plan to retire? However, this time around, the answer was 68.
In one short year, a large, representative sample of people pushed back their retirement plans by three whole years.
I found the timing remarkable. Because over the past year, the economy has improved - particularly the labour market. People have to be feeling better about themselves and their financial affairs.
On top of that, there have been very sharp increases in the world's stock markets. I know that when I look at my RSP, I feel a heckuva' lot better than I did in March 2009.
And last but not least, there has been a steady increase in housing prices. This remains our biggest single financial asset.
When you put it all together, it would seem that if our ideas about retirement had changed in the past year, it would suggest earlier, rather than later retirement. But that's not the case. And it seems to me that in this attitudinal change, there is something very significant going on.
A friend of mine pointed out a recent article in MacLean's magazine. A poll conducted by Environics Research said that one-third of Canadians aged 45 to 64 said that they expected ... note the word ... expected that lottery winnings would support their retirement. What does this mean? First, it tells me that many of us are grasping at straws. But it also says that in our hearts we know that the traditional retirement age of 65 is a thing of the past..
Our job now is to figure out the new retirement reality.
By the way, I'm not lamenting that we're going to have to work beyond the age of past generations. To start, we're tending to be older when we join the workforce. At the other end of the spectrum, we're living longer.
And we've should keep in mind that there is a broad social good served by retiring later: More hours worked means more production of goods and services and a higher standard of living.
However, it doesn't necessarily mean a better quality of life. That's going to be one of Canada's challenges in the years to come - ensuring that as we work longer and our standard of living improves, we take our quality of life upwards along with it.
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