Decades in retirement

2010-09-09

in Canada, Economics

The average Canadian man will spend almost 20 years in retirement, while the average woman will get nearly 25.

Personally, I think it would be more enriching to retire later and take a number of six-month to two-year breaks from work, rather than work until a set age and retire completely at a set point.

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{ 19 comments… read them below or add one }

Byron Smith September 9, 2010 at 8:02 pm

I suspect that before you or I reach retirement, we’ll see two trends converging: shortening life-spans and increasing retirement age. Twenty years is never going to happen.

Sarah September 9, 2010 at 8:51 pm

Well, those averages by sex conceal substantial and politically-loaded variation according to other characteristics. Given that socio-economic differences impact life expectancy, some groups (e.g. rich white women) are taking more out of the pension system than they put in, while other groups (e.g. poor racial minority men) are receiving far less than they put in. Statcan says aboriginal life expectancy for aboriginal men in 2000 was 7.4 years lower than non-aboriginal men, for aboriginal women it was 5.4 years lower than for non-aboriginal women http://www12.statcan.ca/english/census01/Products/Analytic/companion/abor/canada.cfm . I’d have said that trying to remedy health disparities was a more important issue re. pension fairness than giving healthy young people breaks from work.

alena September 10, 2010 at 11:38 am

Many of our friends are retiring now, but they are seeking volunteer work, new degrees and hobbies. Some of them are taking care of their grand-children and some of them are supporting their own children financially. The world is changing a lot, and only a few people have the luxury to simply retire and play golf. A number of people are also becoming critically ill at a younger age. I hope that I will never have to retire completely and that I will have the strength to do something useful for a long time.

Byron Smith September 10, 2010 at 12:08 pm

Alena, with respect, what is the difference between “new degrees and hobbies” and playing golf?

Matt September 10, 2010 at 12:32 pm

Byron:

I’d be surprised about shortening life spans. Fewer people smoke now, more people are aware of cardiovascular disease risk factors, and medicine advances. I would expect my generation to live longer than that of my parents.

R.K. September 10, 2010 at 1:02 pm

Obesity is one possible reason for falling lifespans in places like Canada and the U.S. The documentary King Corn suggests that the poor diet of Americans could make this the first generation in ages that lives for a shorter period – on average – than the generations before.

Byron Smith September 10, 2010 at 8:43 pm

Matt and R.K., I wasn’t particularly thinking of obesity, or smoking or cardiovascular problems. I was more referring to the converging ecological and resource crises facing industrial civilisation (of which anthropogenic climate change is but one threat amongst many), which threaten serious disruptions to the social fabric of our global village within our lifetimes. I don’t expect the next 20-30 years to be anything like as rosy as the last 60, and may well be accompanied by demographic changes in life expectancies (almost certainly by changes in the funds available for provision of medical care and pensions). Thus, I think we’re most likely deluding ourselves if we simply plot and extrapolate our current trajectories in economics, geopolitics and public health.

Happy to discuss this in more detail, but the bottom line is that I’m 31 and am certainly not counting on getting 20 years of retirement.

alena September 10, 2010 at 10:19 pm

Byron,
what I meant by” getting new degrees” was that people in our age group who have not retired yet are insecure in their jobs and burdened with debts such as mortgages as well as the prospect of insufficient savings for a lengthy retirement. We simply became too materialistic and abusive to the earth. When jobs are no longer secure, the comfortable life-style can start to dwindle. A few years before retirement, people are forced to retrain or start working in a completely new field. So it is not necessarily for academic or intellectual reasons that they return to school. Some people in our age group have worked at the same job for thirty years or more and do not have the flexibility to go into a different field. Young people today will probably be much better at that. I don’t know why I mentioned golf as I have never played it in my life and neither have any of my friends. e. By “hobbies” I did not mean stamp-collecting, but rather, pursuing interests such as social, environmental and political activism for which there was no time earlier. I read somewhere that in Canada, more than 50% of seniors volunteer and contribute thousands of hours to their community.
I think that we were the most fortunate generation in history and I have no illusions about the challenges that young people will face. I am also optimistic that people can achieve miracles and overcome insurmountable obstacles. On the other hand, I am sure that life expectancy globally will have to decline inspite of medical advances.

Byron Smith September 11, 2010 at 5:12 am

Thanks Alena, that is helpful to see where you’re coming from. And with those clarifications, I agree. I’m glad that not everyone is just hanging out for endless cruise trips at retirement.

oleh September 14, 2010 at 8:35 am

I have enjoyed the discussion. It seems to center on the retirement side of Milan’s comment.

I found the comment about retiring later and taking a six-month to two year sabbatical attractive. I would encourage that although I have not done so. (I did take 6 weeks off 16 years ago to travel to Kenya and India and that has been among the most important experiences I have ever had. However, when I suggested a longer break my partners were not open to it.)

Therefore I would encourage when considering career paths and if such sabbaticals are important to you, to consider careers that allow it.

I also do not see complete retirement as an attractive, although it would allow one to be more relaxed about choices if one could do so.

Byron Smith September 14, 2010 at 10:20 am

oleh – Yes, you’re right. The point of the post was more about sabbaticals than about retirement, and I’m a fan of the idea. Sorry for helping to distract the thread from that main point.

Milan September 14, 2010 at 10:37 am

The issue of retirement raises the matter of how different aspects of life – money, free time, opportunities of various sorts – are not spread out evenly. Indeed, they can sometimes be rather poorly matched. Young people who have the most time and the most opportunities of some sorts generally don’t have much in the way of financial means.

Sometimes, I wish I had a mechanism to send money and photographic equipment back to myself in the past. Instead of having noisy 3.2 megapixel shots from Turkey or Estonia, I could have ones of much better quality. Given that I may never go back to those places, the issue is especially acute. Of course, if I had shot film on those trips, I could just keep re-scanning the negatives with the best technology of the day.

alena September 14, 2010 at 9:41 pm

I do not think that it is necessarily a question of money. Many young people today have much more money than our generation had at the same age. It is rather the ability or the hindsight to use the funds for things that will be memorable and useful in the future. If older people have a lot of funds, they often leave them to their children and it may be more useful to give the extras away while their offsprings are still very young.

oleh October 9, 2010 at 2:27 am

Byron

I also do not believe that your generation (you are 22 years ounger than me) will have it as easy as my generation. One way my generation may be able to help is not to retire completely and leave your generation to carry the greater taxpayer burden.

Tristan October 9, 2010 at 12:00 pm

“The average Canadian man will spend almost 20 years in retirement, while the average woman will get nearly 25.”

What does this statement mean? Does it mean that if you take all Canadians today (including or excluding permanent resident non-citizens?) and add up all the years they will spend in retirement, you get these averages?

What chance do you think a guess like this has of being true? What kind of bet would you make on it?

Milan October 9, 2010 at 3:35 pm

I think the estimate refers to a hypothetical person who retires today, and represents the gap between the average retirement age and life expectancy.

Quite possibly, retirement ages will increase as the ratio of pensioners to workers shifts further in favour of the former.

Byron Smith October 13, 2010 at 3:18 pm

Oleh – Yes, I agree, though I would add that my daughter’s generation are likely to have an even harder time. Whether her children have a yet more harsh time will depend to a large extent upon the actions of the next few decades.

. October 20, 2010 at 11:07 am

Ask a wage slave what he’d like to accomplish. Chances are the response will be something like “I’d start every day at the gym and work out for two hours until I was as buff as Brad Pitt. Then I’d practice the piano for three hours. I’d become fluent in Mandarin so that I could be prepared to understand the largest transformation of our time. I’d really learn how to handle a polo pony. I’d learn to fly a helicopter. I’d finish the screenplay that I’ve been writing and direct a production of it in HDTV.”

Why hasn’t he accomplished all of those things? “Because I’m chained to this desk 50 hours per week at this horrible [insurance|programming|government|administrative|whatever] job.

So he has no doubt that he would get all these things done if he didn’t have to work? “Absolutely none. If I didn’t have the job, I would be out there living the dream.”

Suppose that the guy cashes in his investments and does retire. What do we find? He is waking up at 9:30 am, surfing the Web, sorting out the cable TV bill, watching DVDs, talking about going to the gym, eating Doritos, and maybe accomplishing one of his stated goals.

Retirement forces you to stop thinking that it is your job that holds you back. For most people the depressing truth is that they aren’t that organized, disciplined, or motivated.

. December 30, 2010 at 3:45 pm

Hands off our pensions
A tempting target for impoverished governments

IN THE war on savers a new front has been opened. Savers are already penalised by record low interest rates, as central banks try to bail out debtors. Now governments are feasting their greedy eyes on private-sector pension pots.

Hungary provides the latest example. A reform in 1998 created a mandatory supplementary pension system, with contributions deducted from wages and invested in a private fund. These funds have since accumulated nearly $14 billion of assets. Those assets (and the employee contributions) are now in effect being taken back by the government, since those who opt to remain in the private sector will face stiff penalties.

As Peter Attard Montalto, an analyst at Nomura, an investment bank, points out, the Hungarian government will gain in three ways from this shift. First, it will no longer have to pay contributions into the private-sector fund; the public pension scheme operates on a pay-as-you-go basis. Second, it gets the direct benefit of employee contributions, helping to reduce the budget deficit. Third, some of the private pension assets are being invested in government bonds; these can be “retired”, reducing the government’s debt. The remaining assets will be sold over the next two to three years.

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