Does the much-hyped dream of early retirement have any currency in today’s economy? Is it an achievable goal for the average Canadian? A new study, released last week by Sun Life Financial, casts the retirement expectations of Canadians in a remarkable new light. On the question of early retirement, we may be witnessing a profound shift in the way Canadians expect to spend their senior years.

Forty-five per cent of working Canadians said they expect to be working full- or part-time after their 65th birthday, the age at which Canadians traditionally retire. This is according to a survey of 1,202 employed Canadians between 30 and 65, called the Unretirement Index. Interviews were conducted in August and September.

In the last 20 years, many of us have come to believe (even expect) that early retirement is achievable. In fact, a lot of us planned to retire as much as a decade early. That’s changing. Today, only about one-third (34%) of Canadians expect to be fully retired before their 65th.

The percentage of Canadians who expect to retire early has risen slightly during the economic recovery. The first edition of the Unretirement Index asked the same question in December 2008 and at that time 30% said they expected to be fully retired before 65.

But I think it’s a mistake to see this trending back to the heady days of the 1990s. I’m going to argue that the expectation of early retirement still held by a third of Canadians is, in a lot of cases, unrealistic.

Here’s why. When you ask Canadians at what age they expect to retire fully, they tend to give you an answer that ends in 0 or 5. Eight per cent said 55, 17% said 60, 18% said 65, 12% said 70 (interestingly, 3% said 75).

Responses that don’t end in 0 or 5 are referred to much less frequently – all 2% or lower. This suggests to me that Canadians are guessing. I think that a large number of the 17% who said they will be fully retired at 60, for example, are saying so out of a general notion that they will be able to retire early, not because they have a detailed financial plan designed to get them there.

There is really only one group of Canadians that we can trust to have a realistic view of their future retirement age. That’s those nearing retirement. Working Canadians aged 60-plus know where they stand to a degree that the rest of us don’t. Ask a 62-year-old when he’s going to retire and you will get a precise answer, almost every time.

What does the Unretirement Index report from Canadians aged 60 to 65?

• More than half (51%) said they’ll have to work longer than they expected because of the downturn.
• Almost half (46%) said their retirement won’t be as nice as they once hoped.
• Seven in 10 (71%) said that one of the reasons they’ll work past 65 is to “pay basic living expenses.”

There’s a lot more to the story than this blog entry suggests. Canadians are also saying, for example, that they plan to work past 65 because they enjoy their work and they want to stay mentally active. That is absolutely part of the story.

My point is simple. All of us can take a lesson from our elders here. They’re facing 65 with real trepidation in a lot of cases. Too many have planned insufficiently; too many have saved too little.

Understanding that can help us avoid the same mistakes.