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%.
Keep up to date on what’s happening in the capital markets and the real economy. Subscribe to receive Today’s economy blog automatically by RSS or email.
Get more tips and tools to help you live brighter.
Enter your email address below: