Aging society opposes mandatory retirement, survey says

(March 1, 2004) A growing number of Canadians say they don’t want to be told when they have to retire, according to poll results released today by Investors Group.

“An increasing number of Canadians are choosing a retirement lifestyle that includes some form of employment or work,” said Debbie Ammeter, vice-president of advanced financial planning for Investors Group.

The poll, conducted by Decima Research, found 33% of respondents wanted to see mandatory retirement banned, up from 20% in a poll conducted in 1996 by Gallup Canada.

Perhaps not surprisingly, this feeling is strongest among those approaching retirement age. Respondents over 50 years old opposed mandatory retirement 39% of the time, while 24% of those between 18 and 29 favoured a ban.

“Certainly having the choice to work longer does give you more flexibility in retirement planning,” says Ammeter. “It may not necessarily mean that most of them actually are going to retire later or work later, but they want to have that choice available to them.”

Early retirement is still a priority with Canadians, with the poll finding 36% of Canadians hoping to retire early, but 26% of Canadians would prefer to work in some capacity past the age of 65.

“Early retirement is a traditional goal and dream,” Ammeter said. “But the emphasis is beginning to shift away from when you retire toward planning how you retire and what you are going to do with your life from that point forward.”

Risk tolerance is unique to every client. Some may be of the mindset that since they are working longer, they don’t need to be as aggressive. Others will look at the longer timeline as a safety net that allows more risk.

“When you’re looking at what their investments should be, you’re probably looking primarily at an asset allocation strategy which looks at the person’s comfort level and time horizon anyway, so you just change the time horizon part of the equation.”

Ammeter says early retirement can limit the options available for CPP benefits. Between the age of 60 and 65, a client can take CPP only if they’re earning less than the current monthly maximum retirement pension.

“What we’d look at is if they want to start receiving CPP benefits later and what effect that would have on their overall financial picture,” she says. “Once you are 65 you can start taking CPP even if you continue to work full-time. If you choose to take the CPP, you would no longer be making contributions toward it. If you postponed it until age 70, you’d still be making contributions toward it.”

Filed by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com