Freedom 65 - Not so fast
Sixty-five might be the year of the gold watch, but by no means does it spell the end of a successful working career. Our parents may have gracefully retired like so many of their peers, but today’s 60-plus generation isn’t ready to be put out to pasture quite yet.
Articles appeared in all of the major dailies across Canada this week and all are abuzz with talk of boomers and retirement, or the lack thereof. The coverage revolves around a major report issued by Statistics Canada which illustrates an impending tectonic shift in the workforce.
2012 is the year when the first of the baby boomer generation will start turning 65. As illustrated from the chart above, the percentage of working-age people (the participation rate) resembles a tanking stock and unfortunately we can’t divest ourselves from this impending demographic drop.
With such important findings coming from the StatsCan reports, it’s easy to see why the story gained so much coverage. Some of the conclusions include:
- The proportion of the labour force aged 55 and over will dramatically increase to one in five in 2021, compared to one in seven in 2005.
- This study suggests that future economic growth may have to depend less on employment growth and more on higher productivity, which could offset the consequences of a slowdown, or even decline, in the labour force.
- This decline in the overall participation rate is mainly due to the aging of the population, a result of low fertility over the last three decades and the steady rise in life expectancy.
These findings should concern every Canadian and not just the economists and statisticians who prepared the report. The economic ramifications of StatsCan’s findings become more serious when you account for the fact that many boomers haven’t sufficiently saved for their retirement years. A long story short: there are going to be many more boomers continuing to work well into their golden years. Some of them will work because they want to and many will stay on because they have to.
Does your organization have a plan on how you will work with the new 40?
