Cost of Living

OK, boomer! The future for Canada's soon-to-retire demographic

The next few years will see many from the baby boomer generation head into retirement. What are some of the consequences for their future?

The 2020s will be the decade that sees many baby boomers head into retirement

The senior citizens pictured in this stock photo might be contemplating their future as their demographic heads into retirement. (Shutterstock / Sirirat)

With more than five million Canadians set to turn 65 this decade, the 2020s will be the decade where many of the so-called "baby boomer" generation head to retirement.

As the generation that has, arguably, been shaping many aspects of our society throughout their lives, this will be a big shift for Canada's economy — both for life in and outside of the workplace, and for many industries across the country.

The Royal Bank recently released a report citing the "advancing age of the baby boom cohort" as one of the challenges facing the Canadian economy as we head into 2020.

Almost all boomers will turn 65 or older and become senior citizens in this decade, except for those born in 1965. The generation is defined as including those born from 1946 to 1965 in Canada, with more than eight million babies born in this country.

Interest rates: a blessing and a curse

Making sure retiring baby boomers have enough money as they leave the workforce could be a major challenge, and where experts say we could see changes in policy.

Lower interest rates are part of the concern, according to the RBC report, which pointed out that the lower rates of the past decade have increased household wealth by helping increase real estate values, for example.

If you take away that pension you're asking people to save one million … a lot of people have not done that."- Linda Nazareth, economist
However, they have concurrently penalized savers or pension values in some respects. That is combined with fewer and fewer retirement-aged Canadians being covered by substantive workplace pension plans.

"If you look at where interest rates are right now … three per cent, four per cent, five per cent would be a great return [from] one million dollars. That would give you $50,000 a year," estimated economist Linda Nazareth, who works in demographics.

"That used to be enough for a lot of people, or a reasonable pension even if they didn't have the highest paying job. So if you take away that pension, you're asking people to save one million or two million or even half a million [dollars]. A lot of people have not done that."

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Essentially, low interest rates are great if you are trying to buy a house.

They might not be great if you'd like to save money for the future.

Combine that with longer life expectancy, and a lack of workplace-provided pensions, and many baby boomers may need to work longer.

They may want to take advantage of flexible working arrangements, something federally-regulated workers in industries such as telecommunications or transportation now have the right to ask for.

Come sail away with the boomers

One industry that could see a boost as baby boomers retire is cruising.

Viking cruise ships, targeting baby boomers, will soon visit ports like Thunder Bay, Ont. (City of Thunder Bay/Provided)

As an example, Viking Cruises founder and chairman Torstein Hagen says part of why his company is expanding — and why the Canada Pension Plan is investing in it — is because it expects aging baby boomers to cruise more.

And you can very much see it reflected in the expansion plans of the industry.

We have been very deliberate as to defining what our product is … we don't allow children under 18 on board and we don't like screaming noises of any type.- Torstein Hagen, Viking Cruises

Viking Cruises specifically targets older people.

"We have been very deliberate as to defining what our product is, so we  don't have casinos. We don't allow children under 18 on board and we don't like screaming noises of any type," said Hagen.

The company operates small river cruise ships and larger ocean cruise ships, along with expedition boats for trips through the Great Lakes.

As the company expands, Thunder Bay, Ont., will become a port of call for Viking Cruises.

In part, the launch of an eight-day cruise trip from Milwaukee to Thunder Bay is a sign of the demographic shift toward baby boomers — an expansion of a product specifically targeting that age group.

Written by Anis Heydari. Produced by Tracy Johnson.
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  • An error in transcription resulted in a reference to "one million" being erroneously written as "six million" in a quote from Linda Nazareth.
    Jan 27, 2020 3:30 PM ET


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