A recent Washington Post article by Thomas Heath had an interesting title: “Dying at your desk is not a retirement plan”. Indeed, he went on to note that by retiring too early you risk outliving your money, and staying at the desk too long you might miss out on life. How true. The number of older workers (65 and up), mostly so-called boomers, have delayed their retirement for differing reasons over the last decade. Bloomberg News reported that almost 19 percent of Americans 65 or older were working at least part-time in the second quarter of 2017. The U.S. Bureau of Labor Statistics (BLS) expects this trend to continue. The BLS estimates that by 2024, 36 percent of 65- to 69-year-olds will be active participants in the labor market. That’s apparently up from just 22 percent in 1994. The same can be said for older Canadian workers.
A good part of the problem lies in the fact that many workers no longer have access to a private pension plan, particularly a ‘defined benefit pension plan’. In the U.S., according to a 2016 analysis by Willis Towers Watson P.L.C., the number of defined benefit pension plans sponsored by the nation’s largest corporations (Fortune 500) continues to fall. Just 99, or about 20% of these companies offered a defined benefit pension plan to new salaried employees in 2015, down from 104, or nearly 21% in 2014. This represented a dramatic fall from a decade earlier in 2005, when 248, or just over 48% of Fortune 500 firms, offered the plans. As per the same analysis, more of these firms are offering only defined contribution plans to new salaried employees, who will have to sort out their investments for future retirement on their own.
In addition, many boomers are not saving enough for retirement either through contributions to Registered Retirement Savings Plans (RRSP) in Canada and 401(k)s and IRAs in the U.S. Indeed, in 2017, Forbes estimated that half of Americans were approaching retirement with no savings! Instead, these workers appear to be relying on Social Security to finance their retirement. Now, one needs to realize is that, for low-income Americans, Social Security may be enough. However, will Social Security be enough to have a comfortable retirement? Middle income Canadians face the same dilemma, especially those relying solely on the Canada Pension Plan and Old Age Security to finance their retirement. Their standard of living will suffer as costs begin to outweigh benefits in retirement, especially since we are living longer.
For those older workers who choose to continue working past 65 for an acceptable variety of personal and bona fide reasons, we salute you, especially where your expertise and experience continue to be needed. For those older workers who have little or no choice financially but to continue working, we can only hope that you will not die at your workplace. For the latter, the best advice that one can offer is to get your affairs in order, remain healthy and retire as soon as possible. Otherwise, you might just miss out on life.
FROLITICKS 
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