Canadians are delaying their retirement and staying on the job for longer, a trend that had profound implications for the country's current and future workforce.
A 50-year-old worker stayed in the labour force three and a half years longer in 2008 than in the mid-1990s, according to a Statistics Canada indicator that tracks peoples' retirement behaviour.
Its findings are consistent with an increase in the employment rate of older Canadians that began at the same time. Indeed, employment among older workers hit a record high last year.
It's a shift from prior decades. The 1980s and early 1990s were marked by a trend towards early retirement (remember “Freedom 55?”) amid high public-sector deficits and downsizing in the private sector, the paper said.
“However, since the mid-1990s, the tide appears to have turned.”
The report doesn't delve into what factors are driving people to delay retirement, but prior studies have shown both economic necessity and personal choice are key reasons.
“Although the 2008 financial crisis and economic slowdown may have prompted some workers to postpone their retirement, delayed retirement is far from being a new trend,” it said. “The results show that the trend began in the mid-1990s, well before these events.”
Canadians are increasingly indebted and financially squeezed, and that may explain why many are staying on the job more recently. More than half, or 57 per cent, of Canadians have no savings set aside for emergencies, an RBC survey released Wednesday showed.
All told, an employed 50-year-old could expect another 16 years at work in 2008 -- 3.5 years longer than workers of the same age in the mid-1990s, who could expect to work 12.5 more years. The 3.5-year increase was the same for both men and women.
The employment rate among workers aged 55 and older hit a record 34 per cent last year from a low of 22 per cent in 1996. Last year's rate was even higher than in 1976, when it was 30.2 per cent.
The shift is causing ripple effects on everything from workforce planning by HR departments to an impact on company pension plans. It may also explain why younger people, whose jobless rate is 14 per cent, are having a tougher time finding work.
Canadians may be delaying their retirement, but the length of retirement hasn't changed much because life expectancy has grown. The expected time men spend in retirement was 15 years for men in 2008 and 19 years for women.
The report, which used data from the labour force survey, found the 2008 average age of retirement was 62.