GREY MATTERS | PULL-OUT SUPPLEMENT
June 2012 | S9
GERARD FITZPATRICK, a chartered accountant in
Charlottetown, jokes that his retirement plans have
changed in the wake of the global economic downturn.
“Thanks to the market,” he said,
“I’m now on the Freedom 85 plan.”
For many Canadians, retire-
ment is no laughing matter. The
recession has wreaked havoc with
portfolios, leaving individuals
scrambling to see whether they
can now afford to retire.
Quite simply, says Warren
Bongard, vice-president and co-
founder of ZSA Legal
“the recession is forcing
people to work longer.”
lished path to retire-
ment has taken a new
turn, says Jeffrey Rudder-
ham, director and investment
counsellor with BMO Harris Pri-
vate Banking in Halifax. “The
traditional instance of punching
the clock then leaving the work-
force forever has changed. Those
days are gone forever.”
In their place has come a care-
ful scrutiny of retirement options.
The first factor put under the
microscope: finances. According
to Sun Life Financial’s annual
Canadian Unretirement Index
released in February, early retire-
ment is not an option for most
people. Only three in 10 of those
surveyed said they plan to be fully
retired at age 66.
Money is a prime consideration. Forty-eight per cent of Canadians polled by Sun Life plan to
phase in their retirement by working part-time or freelancing, a
reflection of their concerns about
having enough savings in today’s
economic climate. Of those who
expect to work past the traditional
retirement age of 65, 61 per cent
said they will do so because they
need to; 39 per cent said it will be
because they want to.
For those individuals who are
ready to retire now, financial considerations dominate their thinking. “‘Can I afford to retire?’ is still
the No. 1 question,” says Rudder-ham, a chartered financial analyst.
Preparing a retirement projection— how much money you have
and how much you need to live
on—is essential. It’s not a one-time exercise. A projection needs
to be done regularly in the younger
years and more frequently as a
person gets closer to retirement.
“You can’t take comfort in the
fact that you’ve done an analysis.
You need to stay on top of this,”
says Mark Bernard, a tax partner
with MNP LLP in Edmonton.
Crunching the numbers is the
“There’s a big difference between
easy part, he added. “There’s a
whole industry out there that
comes at it from this point of view,
but real life has a way of blowing
those analyses up.”
Reality also affects how wel-
come — or unwanted — the pros-
pect of retirement might be.
someone who likes what
they do and someone who
has a job,” says Fitzpatrick,
co-owner of Fitzpatrick &
Co., the first accounting
firm on Prince Edward
Island that is operated by a
father and son team.
“The ones who make the
transition the best are those who
are happy,” he adds.
Keeping busy and keeping
engaged outside the office are
important issues for older adults
to address. “Where do you go at
65 if your focus has been work?
You can’t just turn off the switch,”
It’s essential to look inside at
personality, pastimes, and per-
sonal preferences. “Some people
may feel work restricts them
from pursuing their chosen life-
style and others may want to
retire, at least in some
form, to pursue other
interests,” says Mike Goo-
ley, Canadian regional
vice-president of Rob-
ert Half International
Another key factor is at
play in determining when
it’s time to retire: According to
Statistics Canada, the average
life expectancy for individuals
who are 65 today is 20 years,
with women living even longer
than men. Statistics Canada
also predicts that 17,000 Can-
adians could reach age 100 by
the early 2030s.
Longevity needs to be factored
in to retirement plans. Canadians
need to consider how they will
make ends meet if they don’t have
a steady income for 20 or 30
years—or longer. “We’re now
reaching well into our 90s. That’s
a lot of time to be retired,” Rud-derham says.
For many, fighting boredom
and a dwindling bank balance lies
in continuing to work, at least
part-time. The Unretirement
Index found that for Canadians
planning to phase in their retire-
ment, 43 per cent expected to
start the process between the ages
of 60 and 65, 21 per cent between
50 and 59, and 8 per cent expected
to start between 66 and 70.
The 2010 edition of AXA’s
Retirement Scope study found that
Canadians are not readying
themselves for retirement:
n;No matter what their current
stage of life — young, midlife, or
end of career — those surveyed
believe that they will be able to
stop working on average three
years before they turn 65.
n;That belief is not founded in
financial reality. More than half of
working Canadians (57 per cent)
admitted that they cannot estimate,
even approximately, the retirement
income they will likely need.
n;Among respondents aged 35 to
49, the majority (60 per cent) do not
know what their retirement income
n;For those over 50, 42 per cent
don’t even know how to estimate
their retirement income.
n;The lower their income, the fewer
people in the workforce know what
their retirement income will be.
Recent research from Statistics
Canada indicates that delaying
retirement may be de rigueur for
n;The employment rate of individ-
uals 55 or over has grown noticeably
in recent years. From 1997 to 2010,
it rose from 30.5 per cent to 39.4 per
cent for men and from 15.8 per cent
to 28.6 per cent for women.
n;There has been a significant
increase in delayed retirement
starting in the mid-1990s. In
2008, a 50-year-old Canadian
could expect to be working for
16 years. In 1977, this figure
was 14 years.
n;The trend to delayed retire-
ment also stabilized the expected
length of retirement. The length of
retirement — about 15 years — is
about the same in 2008 as it was
EGG BY BIZROUG / DREAMSTIME.COM, CALCULATOR BY PAKHNYUSHCHYY / DREAMSTIME.COM