There’s no denying that the past few years have witnessed situations that none of us could have anticipated. Between a global pandemic and record-high inflation, it’s no wonder some Canadians are choosing to delay retirement.
Below we’ll look at the numbers to determine whether Canadians are delaying retirement and share tips on how to plan for retirement, whether it’s right around the corner or years away.
Canadian Retirement by the Numbers
Since the pandemic, numerous surveys have been conducted to gauge how comfortable Canadians feel about retiring right now. According to a report from RBC in 2021, 18% of Canadians aged 50 years and older said they were planning to push their retirement date. On a related note, nearly 22% of working Canadians are 55–64 years, which is an all-time high in the history of Canadian censuses. This population of older working Canadians shows that, in addition to the participants surveyed, some workers may have already delayed their retirement.1
Why Some Canadians are Delaying Retirement
Almost one-fifth of working Canadians have delayed or are planning to delay their retirement, but what is leading to this decision? According to a 2022 survey, 62% of participants who have delayed or plan to delay their retirement are doing so because they don’t have enough savings or investments. Similarly, 71% of older Canadians are worried about running out of money in retirement.2
While running out of money in retirement has always been a stressor and one of the biggest obstacles to retirement planning, the issue is exacerbated in today’s economy due to record-high inflation rates and the increased cost of living. For example, $1 million in retirement savings won’t stretch as far as it used to. In fact, 54% of the participants surveyed say they are delaying their retirement because of rising inflation/costs of living this year.3
A few other top reasons why some Canadians are delaying retirement include because they have too much debt (40%), their children still require financial support (26%), they love their job and don’t want to quit (2 3%), of the COVID-19 pandemic (21%), they are caring for a partner/spouse (13%), or they are caring for a parent or other family member (10%).4
Planning for Retirement
Every retirement will look a little different, but no one could have predicted the economic struggles we are facing now when they were planning their retirement 10–15 years ago. Still, there are some tactics you can remember as you plan for retirement through these ups and downs. Below are just a few:
- Have a diversified plan to help protect yourself against market fluctuations. Working with a financial advisor is an effective way to ensure your portfolio is aligned with your risk tolerances and timeline.
- Set a budget and stick to it. Especially with such high inflation rates, it’s important to watch your spending, so you don’t end up taking on high-interest credit card debt, especially right before you want to retire.
- Implement a phased retirement. The Center for Longevity and Retirement has a whole flexible retirement schedule that shares how this adjustment can help extend your working life while still enjoying retirement.
Retiring in a post-COVID world looks much different from how it did before; thus, some Canadians are choosing to delay their retirement, primarily due to the rising costs of living and not having enough retirement savings to last. Working through a detailed retirement plan can help you structure your retirement properly and navigate these economic times.
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