Retirement not all it seems to be

Fred Vettese, Financial Post 

Retirement not all it seems to be

Many Canadians are working past 65 and see no immediate reason to retire.

Stock photo / Fotolia.com


Statistics Canada's new data show our population continues to be getting older. For the first time, we have more people age 55 to 64 than we have people 15 to 24. The census data also noted that we are living longer than ever, with 5,825 centenarians in Canada last year - a 25.7% jump from 2006. Retirement inches further into the distance.

While Statistics Canada continues to label the age group 15-64 as the "working-age population," this label may have to change as more people age 65-69 stay in the workforce, at least on a part-time basis. At the same time, we will have to rethink our definition of "seniors."

While the heart of the Baby Boom retirements might still be five years off, it is clear that more 60-somethings will need to stay in the workforce, for their own financial needs and also because of the labour shortage Canada would face without them.

But Picasso was still painting when he was 90. Einstein pursued the grand unified theory right up to his death at 76. Casals practised his cello three hours a day at 93. Woody Allen at 76 shows no signs of slowing down. This theme extends to the business sphere as well; Kirk Kerkorian, for instance, is still making deals at 95.

Why do we want to retire then, when clearly money is not what keeps these people going? The real key is being in control. How else to explain that the average retirement age for the self-employed in Canada is 69? One 69-year-old friend of mine with his own furniture business still works long days, week in and week out; and it is hardly because selling furniture is a creative enterprise. But he is the boss and that is enough to keep him engaged.

By contrast, workers who are employed by someone else re-tire at age 62, on average. They wouldn't leave so early if they were motivated by their jobs, but most of them have little control over what they do or how they do it.

Some of them are pushed out prematurely by their employers but that is because the "employment deal" between employee and employer gradually be-comes skewed in favour of employees as they approach retirement age.

Too often, older employees price themselves out of their jobs because their vacation entitlement, their benefits and especially their cash compensation grew faster than their productivity after a certain stage in their careers.

It doesn't have to be this way. We should all do some soul-searching as to our own motivation to retire. Retirement planning is focused too much on how and not enough on why. Even if our work is not as creative as Picasso's or Einstein's, we will generally be happier staying engaged in the workforce, provided we can gain some control over our lives.

For the most part, this means working shorter and more flexible hours once we cross the age 60 threshold. To make this hap-pen, we should initiate the dialogue with our employer to re-shape our roles and work hours because our employer is unlikely to take the first step.

If we want this to work, we have to be prepared to be flexible with our compensation and benefits demands. Of course, this approach won't succeed in every job situation but the more often we try, the sooner it will become the norm.

Fred Vettese is chief actuary at Morneau Shepell.

