# Nearly half of Canadians FORCED to retire earlier than planned. G&M article



## janus10 (Nov 7, 2013)

http://www.theglobeandmail.com/glob...lier-than-planned-poll-shows/article25219041/

So, more than half of Canadians are NOT forced to retire earlier than planned.

For some of us here, we may retire earlier than planned but that's because fortune has smiled on us.


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## RBull (Jan 20, 2013)

Strange survey results. Only an opinion but I wonder how many people actually even have/had a "plan" on when they were going to retire. I also wonder about the definitions of "forced into retirement". Why did 48% of retirees actually "retire" if they're worried about their finances? 

We keep reading about people having to work longer to meet retirement needs. Only 6% of those surveyed retired later than planned??? I'm the same as the 6% category due largely to '08/09 but retired on my 55th birthday- on my terms- not forced. Even though later than planned fortune has definitely smiled on us.


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## sags (May 15, 2010)

Loss of jobs and poor health, I would imagine are the two key factors.

A similar scenario happened in the US in the Recession. People lost their jobs and took their Social Security early to pay the bills.

Other surveys have shown that many people have given up their dreams of retirement and plan on working beyond age 65.

It isn't implemented yet, but moving the OAS qualification back to age 67 may have an impact in the future as well.

No OAS means no GIS...........so low income retirees will have to wait a couple more years.

It is a "plan" but I am not sure counting on working into old age is a good one.

With fewer retirement pensions anymore, it is one big mess for a lot of people.


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## fraser (May 15, 2010)

I have seen many people in my work former work environment/industry be downsized in the mid/late 50's . It is quite common. When layoffs come often older, higher paid and more benefit costly employees are the first to go. More than one of the large HR consulting firms actually have software that can analyze an employee base and recommend layoffs based on total cost of the employee to the firm. Especially so for those under 55 in a company that has an active DB plan.

The challenge I see is that many are simply not prepared financially for this even though it may have been going on for a number of years. It can be difficult to secure employment, and often at much lower salaries and/or on a contract basis.

In the US for example, I have been told that IBM is laying off employees and then offering them contract positions at less money and zero benefits. Nothing new really.

So if you are 55, happen to an O/S Heloc loan and perhaps an auto loan, credit card debt, and a mortgage your financial and retirement situation can change over night. Just as they can in the case of sudden illness.


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## pwm (Jan 19, 2012)

10 years ago I quit at 55 because I couldn't hack the stress any more. I qualified for a reduced pension and had more than enough investment income along with CPP to live comfortably. I've never regretted that decision. 

Funny story: They were firing people at random just to show that they could, and to keep everyone frightened, but they were giving excellent retirement packages to those people. Since I had planned on quitting at 55 anyway, I "retired on the job" about a year before that. Came into the office at 09:00, took a lunch break from 11:00 to 1:30, then left for home at 3:30. Did that for almost a year in hopes that I might get "packaged out". No such luck. I had to quit on my own accord. A colleague had a lot of debt and planned to work until at least 62 but he got fired at age 56 with 30 years seniority. I was angry that that could have been me, since I wanted out anyway. I think my problem was that I had told too many people of my intention to quit early, and they knew they could get rid of me without paying extra to "package me out". Maybe I should have told everyone I loved my job and intended to work till 65, and there would have been a better chance of a "package". 

I laughed at the term because I always thought of the book "Papillon" which I had read many years ago. The inmates on Devil's Island all carried "packages". That consisted of small roles of paper money and maps etc., which they inserted into their rectum.


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## RBull (Jan 20, 2013)

Perhaps I wasn't clear with my questions. I understand most of these people likely lost a good job. I was downsized in my mid 40's with zero chance of replacing my career or even half my income, and with only a small DC pension. Of course I didn't retire at that time. I started and operated my own business. When I sold it I worked for a few years in a more relaxed (and lower pay) sales position, before retiring. 

I would think its a better choice to continue to work at something rather than worry about finances in retirement, when someone hasn't built much in retirement savings, may have debt or simply didn't have a plan B.

For those having to retire early due to health reasons it may be a different story. It's not surprising this may be increasing as seems declining numbers of people engage in healthy lifestyles, to help with the preventable health issues.


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## sags (May 15, 2010)

I remember when the mandatory retirement age was 65, and a few employees had to be dragged out the door kicking and screaming.

Now there is no mandatory retirement age, and the companies are booting out employees younger than 65...........times have changed.

For those who plan to work past the normal retirement age, I would bet they plan on staying with their same employer and don't envision working part time at McDonalds.

Starting you own business is a possibility, but it carries a lot of risk for someone who is going to stretch their retirement dollars already.

The failure rate of new businesses is very high.

CPP expansion, pooled pensions, TFSA limits................none of those are going to help the current or near current crop of retirees.

They will have to muddle along on less income, and probably living a considerably more frugal retirement than they had planned.

People often have lots of plans and little money though, so maybe the only news is that they are the same people but retired now.

My mom used to call it...........million dollar ideas and a 5 cent pocketbook.


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## none (Jan 15, 2013)

My Target retirement age is either 67 or 72. We'll see how long I last!


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## sags (May 15, 2010)

Garth Turner has commented on studies many times where people say the bulk of their income will come from the government.

And then most people have no idea how small the government benefits are going to be for them.

Few people receive the often quoted "maximum" benefits.

My brother asked me about it a couple weeks ago. He is in his mid 50s and didn't know how much OAS or CPP benefits were.

My next door neighbour is a retired auto worker and didn't realize his 30 and out pension would be reduced at age 65.

A lot of people have no clue and no interest.............and I am starting to feel like the bearer of bad news to some of them.

I am going to start saying that I don't know anything about it so they don't look at me like I am the Grinch who stole retirement from them.


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## janus10 (Nov 7, 2013)

sags said:


> Garth Turner has commented on studies many times where people say the bulk of their income will come from the government.
> 
> And then most people have no idea how small the government benefits are going to be for them.
> 
> Few people receive the often quoted "maximum" benefits.


I am projecting my wife and I will receive a little less than the average recipient and that would cover about 30% of our needs. OAS will cover another 30% or thereabouts. There is one thing I have yet to do and that is assess what, in retirement, will be fixed and what will be the discretionary amount of our expenses. It probably will be a 75/25 split between fixed and discretionary.


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## RBull (Jan 20, 2013)

sags said:


> I remember when the mandatory retirement age was 65, and a few employees had to be dragged out the door kicking and screaming.
> 
> Now there is no mandatory retirement age, and the companies are booting out employees younger than 65...........times have changed.
> 
> ...


I agree times are changing. They always do and always will. 

I also agree people hope they're going to stay with the same employer. McDonalds doesn't have to be the only option for many people. Just yesterday I was at a place buying something where they were highly interested in trying to get me to work for them, with tons of flexibility knowing I'm retired. There is stuff out there. I suggested working not starting a business as an option. Many people don't have the finances or have what it takes to research a good option, build a plan, and then apply themselves along with all the skills needed to make it work. 

Your statement of lots of plans and little money and they're the same people now retired seems the most apt to me. Perhaps folks that are the least prepared for a downsizing may also be the least willing to do what they can to compensate for this disruption and loss. The will have to muddle along on less, unless they have the drive to do something to make a better more worry free retirement.

On your other post I agree, many people have little clue about pensions, govt benefits, amounts and how it comes together.


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## sags (May 15, 2010)

Given our backgrounds.........large families with little money, my wife and I could suffer a 70% loss of income and survive.

Living frugally is simply a state of mind. If you don't have the money...........you adjust.

Sitting on the front porch drinking a cup of tea..............was good enough for hundreds of millions of retirees in the past.

Rent, food, medicine............everything else in retirement is a bonus.


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## RBull (Jan 20, 2013)

Similar scenario here on losing a good chunk of income and surviving. We've seen large income swings due to my career loss. In retirement we're roughly 40% of our peak earning income back in early 2000's. We live well on that and could handle a 50% drop...but we'd mostly be sitting in the gazebo drinking our home made wine and beer, or tea. There wouldn't be much for fun stuff.


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## Daniel A. (Mar 20, 2011)

Somewhat with sags view I agree keeping in mind that I have not applied for CPP at this time but could.
My company pension carries me fine and I am healthy and can work which I do but on my terms.

Would I be happy sitting in a chair reading YES but there other things I want as in travel and no shortage of people that have the money to fund me.


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## HaroldCrump (Jun 10, 2009)

sags said:


> My next door neighbour is a retired auto worker and didn't realize his 30 and out pension would be reduced at age 65.


If it's a typical DBP integrated with CPP, the "reduction" will be replaced by CPP.
His take-home income should stay the same.



> And then most people have no idea how small the government benefits are going to be for them


Very true.
OAS age already increased to 67, and early CPP penalties increased.
By the time most Gen Xs approach retirement, it is possible, OAS age will be 71 and by the time entire Gen X is ready for retirement, OAS may be up to 75.
71 will be considered "early" retirement.


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## sags (May 15, 2010)

Right Harold,

The "problem" is that people think government benefits are in addition to the 30 and out GM pension (which they think is a life time benefit).

Essentially, a 30 and out pension pays a benefit of $3300 a month until age 65..........when it is reduced to a $2000 a month life time benefit.

CPP and OAS are supposed to make up the difference, but as most people start collecting CPP at age 60 (double dipping), their income will be lower at age 65 than it was previously.

Basically their income will be $2000 pension + $700 CPP + $560 OAS = $3260 instead of pre-65 income of $3300 pension + 700 CPP = $4000

Their income will drop $740 a month.

The "good" news for them is they will receive an old age tax credit and the government benefit is indexed............which the GM pension isn't anymore.


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## RBull (Jan 20, 2013)

^True with the $740 drop however this is only from the double dipping amount, if I understand correctly. Their final income is almost the same as prior to age 60, since their 30 and out pension can start at a relatively early age. 

In any case I agree many people just don't understand how their work pension and govt benefits integrate, and some don't even have a clue on the amounts.


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