You're never going to retire — and here's why

People are living longer and working longer, and that's changing the definition of retirement. Peter Armstrong spoke with financial experts to see what retirement is going to mean for people just starting out in their careers today.

Millennials urged to plan for '100-year horizon'

The average U.S. worker holds 10 different jobs before the age of 40, which is changing the nature of retirement. (Max Whittaker/Reuters)

You're never going to retire. At least not in the way we have come to perceive retirement. 

For a while there, we had a pattern. You went to school, you worked and then you retired for a handful of years before your eternal demise. Well, that pattern is broken. We live longer and fewer of us have company pensions to see us through those final years.

Jonathan Chevreau, author of the book Victory Lap Retirement, says people have to adjust their perceptions to meet the new reality.

Semi-retirement, encore career or victory lap?

"If you thought you were going to live until you're 90, figure out what happens if you live until you're 100," he said.

The easy answer, he says, is that people work longer. 

And Statistics Canada is already backing that up. The number of people in the workforce aged 55 and older is surging, with 170,000 more people in that age bracket today than this time last year. Among the 10.6 million Canadians age 55 and up, a record 36 per cent are working or seeking work.

If you thought you were going to live until you're 90, figure out what happens if you live until you're 100- Jonathan Chevreau, author Victory Lap Retirement

"There's many terms for it: encore career, legacy career, semi-retirement is popular, we just coined this term victory lap," said Chevreau.

Whatever you want to call it, more Canadians than ever before are doing it.

The Broadbent Institute crunched those same numbers and found not only are we living longer, we are saving less. Among those age 55 to 64 without access to a company pension, about half have less than half of what they'd need to pay their bills. A staggering 32 per cent have less than $1,000 in retirement savings.

That's likely bad news for them. But it could be bad news for everyone.

"We're looking at a situation in our country — 10 years down the line, 15 years down the line — where millions of Canadians have very little disposable income and that's not good for the economy," said Rick Smith, executive director of the Broadbent Institute.

Plan for a 100-year horizon

Smith is using that data to push the government to overhaul the Canada Pension Plan. Chevreau, meanwhile, takes those bleak numbers as a reason to push Canadians to overhaul their expectations — not just in terms of how they expect to work but also how they expect to save.

"Every millennial should be planning for a 100-year horizon," he told CBC News. "These millennials are going to have an 80-year time investment time horizon."

Benjamin Tal, deputy chief economist at CIBC World Markets, says these changes have seeped into Canadian economic reality over years. 

"The issue is not people that are retiring now, or in the very near future. On average they are fine," said Tal.

The good news, Tal says, is semi-retirement is much easier than it used to be and technology makes part-time work or work from home easier than it's ever been.

Disengagement from the labour market will not be an "event" marked in the calendar, it will be a much more gradual process.- Benjamin Tal, deputy chief economist at CIBC World Markets

"That should impact the way we all think about retirement," he said. "Disengagement from the labour market will not be an 'event' marked in the calendar. It will be a much more gradual process than in the past."

So, you aren't going to retire. You aren't going to move to Boca Raton and live out your twilight years looking down at the golden watch your company gave you as you shuffled out on your 65th birthday.

Sure, we're living longer, but we're working differently now, too. A recent study from Workopolis found job hopping is the new normal. More than half of Canadians stay in a job for less than two years. The U.S. Bureau of Labour Statistics says the average worker holds 10 different jobs before the age of 40, a trend that is widely expected to grow.

So semi-retirement is a choice for many of today's retirees, Tal says, but he warns that is also changing.

"It won't be an option for many younger Canadians," he said. "Many of them will be forced into it in order to reach a more reasonable replacement ratio."

Tips for a financially secure retirement fom Jonathan Chevreau, author of Victory Lap Retirement

Financial author Jonathan Chevreau says semi-retirement could be for you 6:49

About the Author

Senior Business reporter for CBC News. A former host of On the Money and World Report on CBC Radio, Peter Armstrong has been a foreign correspondent and parliamentary reporter for CBC. Twitter: @armstrongcbc


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