The business beat
Cindy MacDougall
The word “retirement” evokes scenes of Florida beaches, shiny Winnebagos and relaxing days. At least, that’s how retirement looks in Freedom 55 commercials. But according to a recent poll by Compas Research, 62 per cent of Canadians believe they will work after they formally retire. Whether they will continue to run a multi-million dollar conglomerate, push paper or shovel fries, most Canadians don’t expect to be sipping cocktails come the golden years.
Chris Martyn, a pollster at Compas, says the data shows current economic realities.
“The drop of the Canadian dollar and the Asia economic crisis has impacted on the way Canadians view their financial security,” Martyn says. “But it’s also true that the majority of Canadians are treading water at best.”
He says Canadians feel they have to spend more now than in the past. Boomers are spending on their children’s education and their parents’ care at the same time, sucking the savings out of their bank accounts.
Franco Frangione, an income options specialist at the Canadian Retirement Information Centre, says boomers and below aren’t penny pinchers.
“Retirees today come from a generation that would save, save, save,” he says. “But people today are different savers. Savers tend to be the more lucrative, and not the whole generation.”
If you’re 30, and want to live comfortably during your retirement, Frangione says you must pay into your retirement stash before paying monthly bills. But the only thirtysomethings that can afford to do this have to be earning in the $80,000 range.
For university graduates, add student loans to upcoming car payments and mortgages, and you’ve got a new generation who can’t afford to save.
The very poor and very rich have never really retired at any point in history.
“The affluent want to continue working, but the poor have to keep working,” Martyn says.
So the usual retiree with the silver Winnebago has been middle class, with enough money to live day to day and save. As the middle class shrinks, more Canadians will have to forget retirement because they can’t afford to save. And as boomers hold onto jobs out of necessity, their children won’t climb the corporate ladder, and will be unable to even start saving.
I feel sorry for Winnebago dealers.