The history and myths of retirement
There are the dictionary definitions of retirement -- withdrawal from work because of age; the time that follows the end of someone’s working life; withdrawal into privacy or seclusion -- and there’s the reality of retirement as you are either close to or already experiencing it – and it doesn’t have much to do with any of these dictionary definitions. Let’s look back to get a good view of the real shape of the ‘new’ retirement.
A brief history of retirement
Retirement is a relatively recent development in human history. The ‘industrial age’ of the late 18th and early 19th century replaced an economy based on manual labour with one dominated by machine-based industries. Still, the demands of physically exhausting labour made it almost impossible for ‘older’ workers to stay on the job. It was easy for them to buy into the idea of retirement as they hit their sixth decade.
The cornerstone of Canada’ retirement income system, the Old Age Security (OAS) program began in 1927 and was updated in 1952 to provide a modest pension to eligible seniors as early as age 60. Among many subsequent amendments: the introduction of the Guaranteed Income Supplement (1967); the establishment of the Spouse’s Allowance (1975); and the extension of benefits to same-sex common-law partners (2000).
Registered Retirement Savings Plans (RRSPs) were first introduced in 1957. The Canada Pension Plan/Québec Pension Plan (CPP/QPP) were enacted in 1965 to provide a monthly income to retirees as early as age 60 with payments dependent on how much a person paid into the plan while working.
The most significant retirement trends over the past 30 years are driven by people retiring earlier and living longer. That means the period over which retirees must fund their retirement has increased significantly from an average of five years in 1970 to approximately 20 years today – and is expected to reach 30 years in the near future.
Retirement myths
- Sixty-five is old Most vibrant, active and engaged retirees would certainly disagree with that – and some studies have shown that today’s 65-year-old has the physical ability and health of a 45-year-old in 1975.
- Retirement means you no longer work Retirees today believe in ‘work at any age’ – either full-time, part-time, or as volunteers.
- Retirement begins at 65 Increasingly, Canadians are choosing to retire earlier – or at least on their own timetable – to explore new avenues in life.
- A life of ease is every retiree’s goal More and more, retirees are opting for a retirement that includes a balance of learning, work (paid and unpaid) and leisure – challenging themselves through all their years.
And speaking of all your years: If you want to enjoy every aspect of the ‘new’ retirement, you’ll need the income to support it. Your professional advisor can help make your retirement dream a reality for a lifetime.
This column, written and published by Investors Group Financial Services Inc. (in Québec – a Financial Services Firm), presents general information only and is not a solicitation to buy or sell any investments. Contact a financial advisor for specific advice about your circumstances. For more information on this topic please contact your Investors Group Consultant.
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