Planning to retire? Life intervenes

We boomers are a self-indulgent, narcissistic lot. Since we still make up the largest portion of the economic pie chart, holding most of the nation's private wealth, of course the world revolves around us.

But you know, time does catch up to us. Faster than a lot of us thought possible.

Where we used to talk to friends about career, kids and school, now we talk about aging parents and retirement. And if we want to talk about something pleasant, we talk about grandchildren. But somewhere in most conversations between boomers that I observe, the talk touches on retirement.

Three studies cited in news reports in recent months (the latest, from the Angus Reid Institute, reported in the Globe and Mail) point to an alarming fact about the way boomers are entering retirement. Alarming, because once seen, some warnings should have been obvious.

Most older workers have some sort of plan concerning the time when they will end full-time work. But plans often turn out to be just dust. It appears about half of my demographic enters retirement somewhat earlier than planned.

Two studies that I have seen, the Angus Reid study and one done by the Brondesbury Group for the Ontario Securities Commission both say that whatever plans we make for retirement, about half don't play out the way we wanted.

For most of those who were forced into retirement early, there was some sort of major financial crisis. Health problems of a family member (often aging parents or a spouse), or an early layoff resulting in lost employee benefits, or a loss taken in investments were cited as reasons someone's life plan got radically changed.

It's obvious, and John Lennon said it best: life is what you get while you're making other plans.

Whatever the reasons, about half of us still manage to “stay OK” in retirement — planned or not — although there's not a lot of money for extras. The rest truly struggle, or are living the dream.

That's where the advertising aimed at older workers and retirees does not meet reality.

We are shown pictures of cruises and beaches. For more than half of us, it's mostly visits with family. We are told we deserve Europe after 40 years of work, but fewer than half of us actually achieve 40 years of full-time employment, much less Europe.

Half of us — working or retired — worry we might outlive our savings. Some 57 per cent of retired people say their Canada Pension is their major source of income. About 30 per cent also rely on RSP savings.

(To me, that's a real-world argument for an enhanced Canada Pension Plan, but there are other days to argue about that.)

Just the same, the real-world experience of retirees belies the goals sold to us by the investment industry: that we need about 70 per cent of our working income to be comfortable in retirement.

What we're finding is that most people can be comfortable on about half their pre-retirement income — just with fewer beaches, fewer cruises. For boomers, who have less and less time left to accumulate savings each year, the 70-per-cent goal is simply not achievable anyhow.

Especially when life intervenes and half of us need to retire, sometimes years before the date set in our plans.

A report from CBC News also notes a steep rise in the numbers of older people going bankrupt. Nationally, about 10 per cent of all people who declared bankruptcy last year were aged 65-plus. Seniors in Ontario make up 30 per cent of bankruptcies in that province.

Blame life intervening, if you wish. People fall ill and cannot work, and do not have a health insurance plan for expenses our public system does not cover.

Blame unrealistic expectations as well. It's not just young families building all the half-million-dollar homes in our expanding cities. Holding a 20-year mortgage at age 60? Not such a good idea.

But while boomers chatter to each other about their fears, for most the fears will prove unfounded.

Take the fear that we'll miss work. Please.

Some 62 per cent of older workers tell pollsters they will miss the satisfactions they got from their jobs. Once people actually retire, that drops to 39 per cent.

Work, if you must know, is quite overrated.

Through the next 15 years or so, the numbers of retired or semi-retired will boom well past the 6.4 million Canadians in this group today. About half will enter this group well before they planned to.

And most of us seem to be doing OK despite life's interventions. As long as you can release your expectations.