Dull wet and rainy afternoons in the office this June led to conversations about the state of retirement and the value we now place on baby boomers in the economy.
As a reminder, baby boomers are any of us who were born between 1946 and 1964. A rather significant demographic in North America and one that in very short time will have a significant impact on our collective economies and future standards of living. We will have more on this in future articles.
Something has fundamentally changed in the workforce in the last 20 years. There was a time and place where those about to retire or those who already had would stroll into my office wearing their newly acquired watches and bragging about the “packed to rafters” retirement party they had just attended in their honour.
Remember that iconic television personality Art Linkletter? Art, a Canadian born American radio and T.V host, had a beloved show called “Kids say the darndest things”. Well on one of those dreary June afternoons and while discussing today’s uncertainty of being able to so easily time one’s retirement date, my esteemed colleague and I go to Financial Planning guru Mathew Hall, innocently blurts out, “when was the last time anyone can remember attending a retirement party?” Oh, how very true and like Art’s very clever show, it may be a darn thing that Matt shared but something so many of us face today.
In fact, almost half, or 43%, of today’s retirees had NO choice in determining their actual retirement date. Contrast this to the workplace expectation though and most of us are living a myth. At the end of 2015, pre-retirees, most of whom are those baby boomers, expect that they will be able to coast comfortably to “their expected retirement target date” or slightly over 80%!! Reality is completely out of sync with expectations.
This disconnect has us very concerned. It’s akin to the client who walks in our door looking for 20% returns in a global environment where GDP rates are actually contracting and workforce growth that contributes to that growth is also dropping. When we unwind the 43% of Canadians who had no choice in controlling their destiny, two obvious factors determined their fate: employer induced and health changes (personal or family – parents).
Significant realities like these are now popping up with a much greater frequency and need to be addressed sooner rather than later. They have grave retirement implications for so many Canadians. It will affect decisions as to how long one may have to continue working, adjusting goals or lifestyle expectations during one’s retirement. We all want to spend our time with the fewest worries and burdens. If you need to review this critical retirement strategy or have children who may be affected, we specialize in getting Canadians ready for the inevitable.