The hypothesis behind the launch of the Sun Life Canadian Unretirement Index in 2008 was that baby boomers were going to transform retirement. This would be a safe bet, we thought. Boomers have left their mark on just about every major aspect of social life in Canada. Why would retirement be any different?
Despite a move toward early retirement that began in the 1980s, we believed that the opposite was taking hold. Boomers — many of whom enjoy successful careers in white-collar professions — would keep working past 65. Many enjoy the work they do, and they place tremendous value on the lifestyle it affords them. Why stop? At a time when it is no longer uncommon to live to 90 or even 100, 65 seems an increasingly arbitrary age to pack it in.
What we didn’t know (or at least, what I was blissfully unaware of) was that a global financial crisis was brewing. We launched our first annual survey in the fall of 2008, just as the country was trying to figure out what the fall of Lehman Brothers could possibly mean to Canadians. In the years that followed, we tracked a growing sense of pessimism and anxiety among respondents.
We were right about late retirement. But few saw working past 65 as a lifestyle decision. This had become a story of economic reality. Among those who expect to be working at 66 in this year’s study, fully two-thirds told us they expect to do so because they need to, rather than want to.
But there’s something else going on this year. One of the story lines picked up after last week’s Unretirement Index release was a minor uptick in confidence. As Jim Yih, author of the Retire Happy blog, wrote: “It may be premature to call this a trend but there are many signs showing some emerging optimism about retirement.”
Three key findings:
- On average, Canadians expect to retire at 66. That’s still a late retirement, of course, but it’s down a full year from the average expected age of 67 last year. The year before that, the expected retirement age reached a record high of 69. This year’s result is the lowest number we’ve seen in four years.
- More Canadians are satisfied with their retirement savings. Thirty-eight per cent of respondents told us they are either very satisfied (8%) or somewhat satisfied (30%). One year ago, only 34% said they were satisfied.
- Fewer Canadians believe they’ll run out of money in retirement. Each year we ask: “Do you think there is a serious risk you could outlive your retirement savings?” One-third (33%) of Canadians said yes this year, compared to 38% who said the same a year ago.
Of course I’m not going to hold these numbers up as proof of a dramatic turnaround. They’re hardly that.
But there is movement here on three important questions. Viewed together, they appear to represent the early stages of a recovery in confidence among Canadians about their retirement plans.