OK, boomer! The future for Canada's soon-to-retire demographic
The 2020s will be the decade that sees many baby boomers head into retirement
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.
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
"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.
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.
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.
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