Canadians are less confident that their retirement savings will soon recover than they were this time last year, according to a poll released this week by Edward Jones.
In 2009, 31 per cent of Canadians said they expected it to take three years or less to recover their retirement savings losses of the previous year. Now, a year later, only 19 per cent feel their portfolios will recover within the next two to three years.
We're not the only ones feeling gloomy about our retirement plans. A survey released last week by Aon Consulting revealed that more than 55 per cent of European workers believe they will have to delay retirement because of the current economic climate. French and German workers are the most pessimistic, with 74 per cent and 73 per cent, respectively, thinking about working longer than they had planned.
The Aon Consulting results are a striking departure from previous surveys on the subject, which generally revealed that Europeans had little interest in longer working careers. In the past, Aon Consulting has found that nearly one in three European workers would rather retire earlier and receive less income in retirement than have their government extend the minimum retirement age in their country.
But we're living in a different world now, where once-cushy nest eggs have developed deep cracks that will take a long time to heal. "Recent events have shown the value of defined contribution pension funds can go down sharply in a recession, which has come as a shock to many people used to gold-plated defined benefit pensions and generous state benefits," said Oliver Rowlands, head of retirement, Europe Middle East and Africa, at Aon Consulting. "As responsibility for retirement savings has moved from the state and corporations to the individual, people are increasingly realizing they need to take an active interest and take steps, such as delaying retirement, to make sure they are financially secure in retirement."
If you're looking for a silver lining in all of this, perhaps it is that retiring early isn't such a good idea anyway. Sure, we all dream of the day we won't have to deal with company politics and deadlines, when we can relax over coffee and the morning papers. But many retirees come to miss the camaraderie of the office and feeling of purpose their work gave them.
It's time to retire retirement, argued Ken Dychtwald, a gerontologist and psychologist, in a NY Times blog earlier this year. The author of A New Purpose: Redefining Money, Family, Work, Retirement and Success believes that as life expectancy rises, seniors have good reasons to stay in the workforce.
"Recent research has shown that the modern retirement experiment is simply not working for most people. About half the retirees in [the United States]say they'd rather be working," he wrote. "Now, they don't want to work full time. Some might like to try doing something different and new, and most don't want all the pressure they had when they were young. Some even want to work as volunteers. But we're seeing a lot of people who say, 'You know, this Golden Age thing is just not enough for me.' "
Mr. Dychtwald attributes the growing interest in working longer to the fact that a lot of retirees just get bored. "Last year, the average retiree watched 48 hours of television a week."
He suggests that a new breed of older adult is emerging, one that is "not interested in acting their age and retreating to the sidelines. He points to examples of "elder heroes," such as John Glenn, who went to space at 77, and Clint Eastwood, who remains a cowboy at 79. Consider Betty White, who at 88 was the oldest person to host an episode of Saturday Night Live.
The era of people seeing retirement as their birthright - as an entitlement - is coming to an end, Mr. Dychtwald predicts. "In the years to come, we will see more older men and women starting their engines and jumping back into the work force, and maybe even having the most productive years of their lives."
Seeing one's retirement savings shrink is depressing, to be sure, but it may be time to rethink what retirement will look like for most of us.