FINANCES AND INVESTMENT

Working retirement the future for many, says study

When the Rolling Stones rock group is touring Europe this summer, its lead singer Mick Jagger will turn 63 at the end of July between concerts in Denmark and The Netherlands.

And while it might seem amusing that a 60plus rocker is still going strong – but at a reduced pace - according to the most recent study in aging and retirement, he’s not alone.

An in-depth study of Canadians’ plans for retirement finds that work will be an important part of retirement life for many Canadians. In it’s annual National Investor, Wealth Management and Real Estate Study, Toronto-based Hart & Associates Management Consultants found that 53% of Canadians expect to work part-time while 6% plan on working full-time in another job when they retire.

The study also found that 16% of Canadians intend to spend time volunteering rather than working in retirement and that women were more likely than men to volunteer in retirement. Only 24% of people plan to fully retire by not working or volunteering.

“For many it is good to work, to have the outlet, the physical and mental challenge, something to get out of bed for and to get dressed for, self-discipline,” says Stephen Smith, a Port Hope based financial planner with Yorkminster Insurance Brokers Limited.

The study revealed that more men than women expect to work in retirement and that more single and divorced people see themselves working in retirement compared to married Canadians.

More interestingly, the study finds that 75% of people intend to work in retirement not for the money but as a way to stay connected with other people and their community. Douglas Hart, president of Hart & Associates said “People intend to stay active within their new definition of retirement and they will be going to work with an interesting motivation- not for the money but for the enjoyment of it…For these people, money will not be the primary motivator.”

Mr. Hart noted, “Enjoyment for the newly retired may range from simply being able to get out of the house in the morning to those who seek new challenges by working with people in a different work environment.”

Mr. Hart said, “It is hard for active and successful people to simply turn it off when they retire”. He added that the newly retired person’s idea of “work” varies widely from being a corporate director, working on development projects in foreign countries to buying a coffee franchise or working in a store.

The study also examined at what age people would like to retire and, more importantly, when they will actually be able to do so. The study found that the average Canadian would like to retire at 58 but realize they won’t be able to afford to do so until 61.

“When you go into retirement you need a backup plan,” says CARP’s founder and president Lillian Morgenthau.

“Because of the inflation and lifestyle demands a certain amount of income which is probably not available to those who are retiring. If they wish to keep their lifestyle they have to supplement their income.”

But Morgenthau points out that the level of work is likely to change as one ages.

“You’re going to work at your speed. You’re going to work differently than you did before. You will probably want to supplement your income,” says Morgenthau.

Income plays a big role in determining when people retire and the Hart & Associates study found that higher income Canadians plan to retire earlier than those with lower incomes. Canadians with annual household incomes between $50,000 and $75,000 feel they will be able to retire by 63 years of age while those making over $150,000 feel they will be able to quit work at 59.

Whether one has the means or not, Morgenthau urges all retirees, regardless of their net worth to have a plan.

“If people who retire do not have a plan or they will be bored; many will get divorced because their wives can’t stand it. [Most] need to have something to feel value,” says Morgenthau.

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