CHIP Reverse Mortgage Blog
The Changing Face of Retirement in Canada
July 31, 2018 | Posted by: Joy Pike
A few decades ago, retirement meant a well-deserved farewell to the daily grind and a chance to spend more time with the grandkids. Nowadays retirees are using their golden years to follow passions, indulge in a beloved hobby or continue working. We have longer to enjoy our retirement, but some of us have less financial security unfortunately.
Here are some of the ways retirement has changed, for better or for worse, over the last 50 years.
More retirees are doing it alone
The thought of spending your last 20 or 30 years with someone you no longer love can prompt some spouses to seek a happier retirement alone or with someone else. This explains why the largest-growing divorce rate is among retirees. Almost a million Canadians over 60 are divorced and haven’t remarried, which can make retirement a very different prospect for them than for married retirees. While divorce can bring financial challenges (which can force the postponement of retirement by up to a decade), for most it’s a good move. A survey conducted by AARP found that 80% of older divorcees were happy with their decision.
Financial independence is more of a concern
More Canadians are facing a less financially secure retirement than in previous generations. A key factor has been the reduction in work-sponsored pensions. Many of the defined benefit plans (with a guaranteed, healthy retirement income) have either been replaced with contributory pension plans (with no guaranteed payouts) or simply withdrawn altogether. Even those Canadians who have diligently saved for retirement may still be recovering from the damage caused by the 2008 recession. Others are simply struggling to save the large amount needed to maintain their working lifestyle. This is leading many Canadians to reassess what retirement means to them.
For many Canadians, retirement no longer means not working
The most recent census showed that more Canadians aged 65 and over are working compared to the last five decades. It found that, remarkably, 53% of men and 38% of women aged 65 are still working. These figures are almost double what they were 20 years ago. The census data reveals that a high proportion of these “retired” workers are reliant on their employment income. It also shows that Canadians without a private retirement pension are 50% more likely to work after 65.
Working past 65 is not just about necessity, however. Many retirees take advantage of retirement to embark on a second career in a field that they’re more passionate about – “unretirement”. Many are also starting up their own businesses after decades of working for someone else. Retirement can be a great opportunity to follow your dreams while you have more time on your hands.
Longer life, longer retirement
We are living an impressive 10 years longer than in 1968, which gives us an average retirement of around 17 years. We’re also healthier in retirement than when working. Research from Oxford University in the UK discovered that retirement is good for your health. Retirees enjoy the benefits of increased exercise, less stress and much better sleep. Their mental health also improves considerably. The only downside to this longer and healthier retirement is that savings need to stretch even more than before to finance those extra years.
How you can ensure you live retirement your way
If you’re finding that this new and extended retirement is proving difficult to finance, you could boost your income with a reverse mortgage. You can borrow up to 55% of your home’s value without having to make any monthly mortgage payments until you choose to move or sell.