Long live the retirement-age entrepreneur

If Canadians continue to work well past their fifties, advisors may have to alter how they approach retirement planning.

More employed people are 55 or older, reports Canadian Business, citing data from StatsCan’s recent labour survey. The number of workers aged 55 and older grew by 57,000 from August to September 2016, and by more than 170,000 since September 2015.

Also read: Business owners aren’t ready for retirement: Report

The increase reflects an aging demographic, of course, but also an increase in labour force participation by older workers. While the number of Canadians aged 55 and older increased about 3% from September 2015 to September 2016, the labour force participation of that group increased almost 5% in the same period, to more than four million and the most ever, Canadian Business reports.

Some older Canadian workers may be building new careers as consultants or freelancers, but many simply need to pay the bills. Research shows Canadians haven’t saved near enough for retirement, and the financial crisis didn’t help.

Add in low rates, and the picture is even more dismal for retirement planning.

Indeed, in a speech last month, Stephen Poloz, BoC governor, acknowledged the difficulty of saving in a prolonged, low-rate environment.

Read: Canadians may have to work ‘a little longer than planned’

In a recent Canadian employee survey released by the Canadian Payroll Association, two-thirds of respondents said they don’t expect to retire before 60.

A 2016 study by The Associated Press-NORC Center for Public Affairs Research found that one-quarter of U.S. workers 50 and older say they won’t retire. Among low wage workers, earning less than $50,000 a year, 33% say they won’t retire.

But Canadian Business reports more research about older workers is needed to get an accurate picture of the reasons why they work. There’s a big difference between those in a cash crunch and those finally striking out to build their own businesses.

“Policy makers may want to be careful about stereotyping entrepreneurs as overeducated and ambitious youngsters,” the magazine reports.

Also read: Help investors move away from Canada Savings Bonds

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.