The history of retirement is just a little over 100 years old. In fact, in 1890 most people died while still employed. If their health held out beyond their ability to work, they “retired” at age 85. So, as you can see, our concept of retirement is fairly young.
According to a New York Times article, “In 1883, Chancellor Otto Von Bismarck of Germany had a problem. Marxists were threatening to take control of Europe. To help his countrymen resist their blandishments, Bismarck announced that he would pay a pension to any nonworking German over age 65. Bismarck was no dummy. Hardly anyone lived to be 65 at the time, given that penicillin would not be available for another half century. Bismarck not only co-opted the Marxists, but set the arbitrary world standard for the exact year at which old age begins and established the precedent that government should pay people for growing old.”
The U.S. adopted 65 as the retirement age in 1935, and it was adopted in Canada shortly thereafter. This timeline makes the parents of the baby boomer generation retirement pioneers, as we now know it.
Whether your dream is to be able to retire early, before 65 or later, the most important question is, will you be financially prepared to retire?
According to a report on Statistics Canada from the Canadian Financial Capability Survey, “in 2014, one in three Canadian adults (33.8%) were not preparing financially for retirement either on their own or through an employer pension plan.” In addition Statistics Canada also reports that, “Almost 6 in 10 (59.6%) Canadian adults did not know how much money they would need to save to maintain their desired standard of living during retirement.” (http://www.statcan.gc.ca/daily-quotidien/141106/dq141106b-eng.htm)
Statistics also show that the retirement age is actually increasing. The median is 62 for men and 61 for women, although 32% of Canadians expect to still be working full-time at age 66. 20% don’t plan to retire at all. Wherever you see yourself in these statistics, having a solid financial plan in place will give you the freedom of choice that is at the heart of financial freedom. Select a financial services professional to provide helpful information, guidance and advice whether you are just beginning to plan for retirement or retirement is close at hand.