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Forget about you: What retirement at 67 means to Canada Add to ...

These are stories Report on Business is following Thursday, March 29, 2012. Get the top business stories through the day on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.

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Awaiting Flaherty I have four kids, two cats, a house in Toronto, a minivan, a flat-screen TV, four cellphone contracts and a specialty television sports package that my daughter wanted, so I wasn't getting out of here at 65 anyway.

But for those of you who actually planned out your life when you were younger, you're going to be asked this afternoon to rethink retirement at 65 and think about 67 instead.

As The Globe and Mail's Bill Curry and Steven Chase report, Finance Minister Jim Flaherty will announce plans to push back Old Age Security benefits to age 67 when he unveils his budget after markets close today.

The idea is to phase in the changes to the $6,000-a-year benefit as the government addresses the issue of sustainability.

What might that mean?

"Such a move could increase economic growth, as it would entail less labour force deceleration than we would otherwise see ahead," said Avery Shenfeld, chief economist at CIBC World Markets.

"Longer term, economic growth is tied to gains in productivity and the growth in the size of your work force. The 'cost' of a trend to working later into life is the loss of leisure time, which isn't captured in GDP, the measure we typically use as a proxy for economic well-being. Note that individuals could still retire earlier, which is still likely in the most physically demanding jobs."

They'll just have to have enough in pension or savings, he said.

Given that it will be phased in, there wouldn't be a marked impact in the short- to medium-term, added Douglas Porter, deputy chief economist at BMO Nesbitt Burns.

"When it does kick in, we can expect the labour force participation rate to stay higher longer (as people aged 65 stay in the work force and delay retirement)," Mr. Porter said.

Europe has been grappling with this very issue, though it's obviously a much different situation. And unemployment in many countries is running at far higher levels than in Canada so job creation is a bigger issue given that Mr. Flaherty's won't kick in immediately.

In Germany, a retirement age of 67 isn't popular but has "generally been accepted" and doesn't appear to be a problem given the country's relatively low jobless rate, said Michael Hewson, senior market analyst at CMC Markets in London.

"In France, on the other hand, attempts to raise the retirement age have been greeted with fierce resistance where the age was raised from 60 to 62 in 2010 to reflect rising pension costs as people are living longer," he said.

"Here in the U.K. there is uproar amongst U.K. public sector workers who are being asked to pay more to fund their retirements once again for the same reason as policy makers start to grapple with the economics of an ageing population and a shrinking tax base," Mr. Hewson added.

"Unlike Canada the U.K. private sector is already having to wrestle with pension deficits caused by tax raids by previous governments and underperforming equity markets. It is a demographic time bomb in Europe and while it needs to be tackled there continues to be a lot of debate about how it will be funded."

For men watching for the budget, here's something extra from three researchers at the University of Zurich who studied early retirement among blue-collar workers:

"We find that a reduction in the retirement age causes a significant increase in the risk of premature death - defined as death before age 67 - for males but not for females. The effect for males is not only statistically significant but also quantitatively important. According to our estimates, one additional year of early retirement causes an increase in the risk of premature death of 2.4 percentage points (a relative increase of about 13.4 per cent; or 1.8 months in terms of years of life lost) ... Our results also indicate that the causal effect of early retirement on mortality for females is zero, suggesting that the negative association between retirement age and mortality in the raw data is entirely due to negative health selection."

They were talking about blue-collar workers, who they found typically work in "physically demanding" jobs and whose health problems often force them into early retirement.

They also suggested that changes in lifestyle - smoking, drinking, bad diet and a lack of exercise - may play a role. So, too, may lower income.

One more thing from the study. And I'm not commenting here on whether the government's right or wrong, simply pointing it out:

"Our results suggest that early retirement does not only adversely affect government budgets. Early retirement may also have adverse consequences by increasing individuals’ mortality risk. A major implication of our analysis is that labour-market policies that keep older individuals at work have a double dividend. They will contribute to an improvement of government budgets and they will raise individuals’ welfare by prolonging their lives. As long as workers can be kept in employment, increasing the retirement age will improve government budgets, though not one-for-one as longer lifetimes will increase social security expenditures in the future."

So, ask not what your country can do for you ...

RIM in spotlight If that's not enough to bring you down, as my generation would put it, consider the shareholders of Research In Motion Ltd.

The BlackBerry maker is set to report quarterly results after markets close today, and analysts expect another weak showing as RIM goes up against the iPhone from Apple Inc. and other smartphones using the Android system by Google Inc. .

"We foresee another tough quarter for RIM when it reports Q4 results," said Phillip Huang of UBS Securities Canada, forecasting revenue of $4.4-billion and earnings per share of 81 cents, which is below estimates of other economists.

"We believe RIM’s BB7 devices continue to struggle, Playbook sales have seen some traction on discounted pricing, with the low-end doing relatively better," he added. "We estimate 11.5 million phones/375,000 tablet units in 4Q."

I'll take Manhattan Toronto-Dominion Bank wants to become the third-largest bank in New York City within the next few years, The Globe and Mail's Grant Robertson reports today.

Speaking at the bank’s annual meeting, held simultaneously in Manhattan and Toronto, chief executive officer Ed Clark said TD intends to continue bulking up New York, adding 50 new branches and hundreds of new staff.

The move would catapult Canada’s second-largest lender into the highest tier of U.S. consumer banks in New York City, among the likes of JPMorgan Chase and Citigroup, which are first and second in terms of branches.

OMERS buys into HootSuite OMERS Ventures, the pension plan’s venture capital investment arm, is buying a $20-million interest in Vancouver-based HootSuite., The Globe and Mail's Tara Perkins reports.

‪The deal, one of the largest Canadian venture capital transactions of the past decade, is being done by way of a secondary purchase from HootSuite’s existing shareholders.‬

Ball's in Augusta's court It stuns me that we're actually still talking about such things in 2012, but we are.

The Augusta National Golf Club is faced with a choice of whether to admit the first woman in 80 years as a member as the Masters Tournament draws near.

In this case, she's Virginia Rometty, the new chief executive officer of IBM Corp. .

IBM is one of the sponsors of the Masters, and the IBM chief has traditionally been invited into the club. Traditionally, of course, she has been a he, and gets to wear Augusta's green jacket and host guests at its hospitality cabin at about the 10th hole.

For Augusta, women have a place at the Masters, in the kitchen of the hospital cabin. I love the fact that they're about to get dragged into the 20th Century, given everyone else is in the 21st.

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