Many Canadians don’t choose when they retire
A poll of 2,833 Canadians over the age of 50 with financial assets of $100,000 or more was released this week by the Royal Bank of Canada. The survey shows that more than a third of retired Zoomers did not choose when they stopped working.
The Ipsos Reid conducted poll found that 85 per cent of respondents still working said they will continue to work until they decide not to. On the other hand, of those who already were retired, only 62 per cent made the choice to do so.
The most frequently cited reasons for their early exit came down to a request from their employer, taking on caregiver responsibilities or health reasons.
The poll also found that Canadians don’t have much lead time before they retire, as 20 per cent of retired people knew only a month or less before they stopped working that they would be retiring, while 42 per cent had only six months lead time. Just 11 per cent knew more than five years in advance, and 27 per cent had one year to start planning for their exit.
Certified financial planner Alexandra Macqueen told the Globe and Mail just how devastating forced retirement can be for some.
“Depending on what they were planning on doing with those final years of employment – often these are the years where many people make significant contributions to their retirement. This is when they are earning the most, they have paid off their other debts…like a mortgage and now is the time for them to turn their attention towards stocking away the money they will live off of,” she said.
The unexpected retirement often comes from companies downsizing. As older employees tend to make the most money, it is not unusual for their jobs to be cut.
“Many have not saved enough money to finance the lifestyle they would like to have when they retire. Retirement is about more than subsistence. If you want retirement to be successful, meaningful and rewarding, you need to plan for that and finance it,” noted Roger Mannell, director of the RBC Retirement Research Centre at the University of Waterloo.
For those retired Zoomers who were happy to exit the workforce, they cited good health, having enough money or being unhappy at work as the main reasons they chose to retire when they did.
Sources: Royal Bank of Canada, Globe and Mail