A year after “The Great Resignation,” where large numbers of workers of all ages left their jobs, a new trend is now emerging. It’s called “The Great Retirement.”
Statistics Canada has reported that 233,000 Canadians retired in 2020, and 307,000 retired over the last year. That’s a record number of Canadians between 55 and 64 walking away from their jobs.
The Covid-19 pandemic has exacerbated everything. Many people, suffering Covid fatigue or taking on the responsibility of caring for aging parents, have re-examined their priorities over the last few years, coming to the realization that maybe it’s time for the next stage in life.
“The Great Resignation,” and with fewer younger folks entering the workforce, is leading to a shrinking workforce. Companies across many industries are watching valuable employees leave before their skills and knowledge are passed on to the younger generation of workers who are also missing out on mentorship opportunities and the development of much-needed soft skills of leadership.
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Still, there are dangers to retiring too early. Instead of retiring completely, why not consider life after work?
If you retire at 55 or 60 and expect to live to 95, you will have to provide 40 to 45 years of income. For most, life after work is longer than we’ve been working.
People underestimate the cost of living after retirement. Findings from the 2022 FP Canada Financial Stress Index, released earlier this year, found that “if Canadians could go back in time and do things differently, 20 per cent would invest more, earlier, wiser; 19 per cent save more and start saving earlier; 13 per cent would spend less.”
There is real potential for an experienced and mature workforce to consider a hybrid model such as consulting that helps provide older workers with the required flexibility. They can make their hours, have control of the workflow, and more easily define the terms of work. It may also help give the companies flexibility as they can make short-term commitments in a fast and evolving global economy.
Here are three steps to consider if you’re considering leaving the workforce.
- Start thinking about your retirement now. An early start allows you to build on the success you made in your career and better identify gaps that you need to fill.
- Work with professionals who can provide you with the appropriate advice. A do-it-yourself approach can cost you time and hurt you financially.
- Understand that what may be good planning for someone else may not be the same for you.
These steps will also be of help:
- Prepare for the future to enjoy worry-free life today and tomorrow.
- Worry less about outliving your resources by using your money more efficiently.
- Ensure you’re not leaving anything on the table or come to regret past decisions.
Taking care of your financial life is more than your investments, pension and savings. It requires constant education, coaching and training to help you improve your skills, working with niche expertise you’ve accumulated and, perhaps, building a team to help you find a work-life balance after retirement.
Vaneesa Cline is a Financial Advisor who has worked in the financial services sector since 2004. She has a Bachelor of Communications Studies from the University of Calgary, holds the Professional Financial Advisor (PFA) and Certified Health Insurance Specialist (CHS) designations and has her own financial planning practice.
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