Freedom 66: Majority of Canadians now believe they’ll stop work a year after the traditional retirement age
Two retirement-related polls were released yesterday: the new Watson Wyatt DC Retirement Timing Index and Sun Life Financial's Canadian Unretirement index. Unretirement is the right word, since both see older workers choosing to remain in the workforce for quite some time yet.
Sun Life finds 55% of Canadians believe they'll will be retired at age 66, up from 51% when it last conducted the poll in December 2008. 66 is of course one year after the traditional retirement age of 65, which is when Canadians qualify for Old Age Security and unreduced Canada Pension Plan benefits. In the new survey, 45% believe they'll still be working either full-time or part-time after age 65. The question was phrased as being "fully retired; not working for money." The poll was of 1,202 full- or part-time workers aged 30 to over 60, conducted late August to early September.
Furthermore,42% said they expect to work longer than they originally expected and 38% felt their retirement would not be as "nice" as they had once hoped.
But when asked about their response to the economic downturn, only 37% said they had started to save or invest more. Instead, 59% had reduced spending and 60% reduced their debt. 
Last December, these workers were "conflicted
about their retirement prospects," says Sun Life Financial Canada
president Dean Connor [pictured left], but today they are more confident about their
ability to save for basic living and medical expenses.
Retirement savings becomes top priority by age 51
Sun
Life also finds that paying housing
expenses is the number one financial priority for Canadian workers
until they reach the age of 51. At that point, retirement savings becomes
their top priority. Compared to December 2008, most are feeling
better about their retirement prospects.More are "anticipating that
they will not be working longer than they originally intended."
That's not what Watson Wyatt Canada finds for workers in the ever more popular Defined Contribution (DC) employer pensions.
Watson Wyatt finds 60-year-olds in DC plans now expect to work four or five years longer
The pension consultants say the average 60-year-old Canadian in a DC plan would have to work four or five year extra years to secure the same level of retirement income as an employee with the same retirement savings history who retired in 2007. Because of the significant market rally since the spring, retirement has become somewhat more affordable for older workers than it was at the end of 2008, but it's still "much less affordable" than it was in December, 2007, when markets were still riding high.
Generally, "the economic crisis has derailed planned retirements," says Watson Wyatt senior retirement consultant Lori Satov [pictured, right]. Large losses in DC pension plans are forcing older workers to choose between working longer or accepting a lower standard of living in retirement. 
Logically, the decision should be to stay in harness, I'd argue, and the Sun Life survey seems to suggest most Canadians are doing just that. With longevity the way it is these days (on the rise), it makes sense to keep working and build up (or rebuild) a larger nest-egg. The bonus is that the longer you're working, the fewer years that nest egg will have to fund. Also, the longer you delay taking the Canada Pension Plan, the better the payout. The same goes with anyone fortunate enough to still be in a traditional Defined Benefit pension plan.
From the employer's perspective, DC plans have helped them manage costs says Watson Wyatt consultant Dan Morrison, but they are also creating a host of other issues for corporate Human Resources departments. If more older workers stay on the job, companies could face higher benefits expenses and more disengaged workers on their payroll, "which could lead to lower productivity," Satov says.
To counteract that, Watson Wyatt suggests employers may choose to offer Early Retirement incentives to selected workers.
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Source The Wealthy Boomer : Retirement
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