|The "new" retirement is no retirement
Friday, May 06, 2011
In our parents’ time, ideas regarding retirement were much different
than we baby boomers are finding today. Retirement was mandated
at 65, or earlier for public sector work, if you met the formula.
Life expectancy was relatively low (72-74) by our standards
today. But for a typical couple today, at age 65 there is a
63% chance that one spouse will live until age 90.That’s a dramatic
change and requires planning to ensure couples don’t outlive
There are a number of trends that are helping this generation
avoid that unpleasant outcome, and getting “saved” by a big
inheritance shouldn’t be high on your list to ensure you don’t
wind up living on only government pensions after you turn 80.
Forced retirement has now disappeared, making it easier for
functional workers to keep working as long as they are productive.
Most companies are pleased to keep older workers on, because
they have great experience, and the new, younger Gen X or Gen
Y worker pool is much smaller.
Working full time, part time, or consulting will all help delay
the start date of capital drawdown, continue building CPP instead
of taking a smaller amount earlier, and allow your investments
to grow naturally or even faster with added capital before you
Many seniors today are finding that besides the financial benefits
of retiring later, there are other benefits too. Our parents
worked 30 to 35 years and then simply retired. Many had to adjust
mentally to having more time and not being “Mary Smith, the
teacher,” but simply being “Mary Smith, retired.” That wasn’t
easy for many people. Moving to part-time work or consulting
allows you to slow down and adjust mentally to the idea of retirement
while having more spare time to build or grow hobbies that will
keep you active and fulfilled during retirement years. In addition,
you don’t have to feel that you are being pushed out of your
job even though you are still healthy and productive simply
because your birth certificate says you are now 65.
New career opportunities
What researchers are finding is that this “new retirement”
work is often very different from what you had done for the
past 35 years. Nurses who start a dog-walking business or open
a small café, for example. Teachers who open a small landscaping
company to get outdoors more. Many people seem to be starting
new with something fresh and have no desire to continue doing
what they had done for so many years in the workplace. There
is also growing evidence that people who stay employed longer
at jobs they enjoy live longer and healthier lives. The key
is finding something you enjoy that pays most of your current
Thus, there are mental and health benefits to working in the
“new retirement” besides the obvious financial ones. So don’t
worry if you are approaching retirement and really don’t feel
like you want to stop work altogether and go golfing five times
a week. There will be more and more people who decide to take
a different path to retirement than their parents did.
However, the key is to continue working because you want to,
not because you are forced to through lack of planning. If you
are approaching 50 and don’t have much of a nest-egg yet, you
had better get moving, as these are normally your years of highest
earnings, and 65 will come quicker than you think. You must
build that nest egg in case you run into any health problems
that don’t allow you to continue working into retirement.
It’s never too late to start planning, and qualified financial
planners have a whole playbook of planning ideas and strategies
no matter how old you are.
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all may be associated with mutual fund investments. Please read the
simplified prospectus before investing. Mutual funds are not
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no assurances that the fund will be able to maintain its net asset
value per security at a constant amount or that the full amount of
your investment in the fund will be returned to you. Fund values
change frequently and past performance may not be repeated.
Personal Opinions & Recommendations Disclaimer
The foregoing is for general information purposes only and is the
opinion of the writer. This information is not intended to provide
specific personalized advice including, without limitation,
investment, financial, legal, accounting or tax advice. However,
please call the author to discuss your particular circumstances.