The New Retirement Model
June 28th, 2008 | by Editor |Today’s Canadian financial advisors have accepted that there is no “normal” when it comes to Canadian retirement. What follows are some thoughts on how they’re handling the “new” retirement.
As the Baby Boomer generation nears retirement years, many are saying “no thanks” to the traditional view of retirement as a period of inactivity. This group sees their senior years as a time of opportunity and reinvention. According to a new worldwide study by HSBC Holdings, 80% want to scrap mandatory retirement while just 14% equate financial independence with old age.
No doubt part of their penchant for work is a practical desire for financial security. Life expectancy is increasing by 2.5 years per decade and by 2050 is expected to reach 90. That is placing pressure on spending on public pensions around the world. In Canada, 5.1% of GDP was spent on public pensions in 2000, but will probably hit 13% by 2050.
In addition to wanting to reject traditional models of retirement, people also want greater choice in when and how they retire. Only 17% felt employers should have a mandatory retirement age while 80% felt that people should be able to work for as long as they are able. Only 29% thought avoiding stress was important to a happy later life. 21% said that never working for pay again would form part of their ideal retirement.
According to one of the organizers of the study, study respondents “want to remain engaged with the world, with family, friends and wider society, and they find work is a great socializing force, bringing them into contact with a variety of people.”
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