Here’s a little-known fact: Generation X hates being called “middle-aged.” My Facebook account lit up last week after I posted Three reasons Generation X has it made. I ended the piece with this: “I don’t mean to suggest that middle-aged Canadians have it easy. But I do think that relative to the tough time Baby Boomers and Generation Y are having, Gen X enjoys real advantages.” What’s so bad about that?
“Your article suggests that I am middle-aged,” wrote Kim. “And that cannot possibly be correct.” Liz jumped in a few minutes later: “I echo that comment! Kevin you had me … until you referred to me as middle-aged!” My favourite exchange was with Lyndsey, who dared me to title today’s post “Four signs you’re middle-aged and in denial.”
Better to stay on-topic, though. As I wrote last week, one of the advantages Gen Xers have is their comfort with the idea of unretirement. Few of us expected to be able to retire early. And a lot of us are happy to keep doing what we do now (or what we’d like to do) well past 65.
For many Canadians, though, unretirement – whether by choice or necessity – is an idea that still takes some getting used to. That’s understandable. The changes under way in Canada’s retirement system are genuinely dramatic.
I work with a research team here that has been mapping these changes since 2008. We’ve drawn four conclusions that help explain what unretirement is, and what it means for all of us:
1. Few Canadians plan to be retired at 66.
Our study last year found that just 30% of adult Canadians expect to be fully retired one year after the conventional retirement age of 65. More than half said they’d be working (20% full-time and 34% part-time) at 66. It’s been fascinating to watch these results move since the 2008 market crash. About half (51%) of Canadians still expected to be fully retired at 66 when we asked that question shortly after the financial crisis struck. That number rose slightly to 55% the following year, and then started to slide from there.
2. Average retirement age is also on the rise.
It’s followed a similar trajectory. Canadians still expected to retire early following the financial crisis, but only slightly. In 2008, the average expected retirement age was 64.9; a year later it was 64.2. Then, reality kicked in. Our results over the next two years were 67.7 and 68.2.
3. Get used to phased retirement.
Canadians aren’t just rethinking a traditional or early retirement date. Many are deciding against a hard stop. About half (48%) of Canadians told us they expect their retirement to be phased, which is to say they will “work part-time or freelance before stopping work for good.” A third (32%) said they don’t know, which means just one in five Canadians don’t expect a phased retirement.
4. Unretirement is a tale of two trends.
Here’s what makes the phenomenon so interesting: Some Canadians are delaying full retirement for economic reasons; others want to keep working. Our most recent study found that among those who expect to be working at 66, 39% expect to do so because they want to and 61% expect to do so because they need to. Not surprisingly, this is largely driven by income levels. About a quarter (27%) of Canadians earning under $50,000 per year and who expect to be working at 66 say they’ll do so because they want to; 73% say they’ll need to. The want to/need to split for those earning between $50,000 and $100,000 annually is 42%/58%. For those earning over $100,000 a year, the split is 64%/36%.
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