The looming arrival of the Christmas season credit card bills can provoke many emotions.
One of them is, “Will I end up working forever?”
You might.
The old mental model of universal retirement at age 65 is slipping into the rearview mirror as rapidly as your high-school grad photo.
In a generally upbeat presentation from Statistics Canada during their recent Yukon roadshow, the nation’s stat mongers squeezed in one sobering chart for alert audience members of a certain age.
Almost 40 per cent of Yukon seniors were working full or part-time, according to the 2016 census. Over a quarter of those working were toiling full-time.
That 40 per cent figure for the Yukon is double the national average.
And that national average is itself double what it was twenty years before, in 1995.
If you look more closely at the data, it’s clear that there has been a major societal change in senior working patterns in recent decades.
Over half of Canadian men aged 65 were working in 2015. Less than 40 per cent were in 1995. Around five per cent of 85-year-olds were working, including a few still full-time.
Women seem to work outside the home less as seniors than men. Less than 40 per cent of women aged 65 were working in 2015. However, that was double the rate in 1995.
Women are quickly closing the gender gap in terms of senior employment.
Of course, there is nothing magical about age 65. Indeed, German Chancellor Bismarck introduced the first modern social security legislation only in 1881, and he picked the age of 70.
Prior to that, few people made it to what we would call retirement age today. Those that did had to rely on support from family or religious charities.
The US Social Security Administration popularized the retirement age of 65, which it picked when Social Security was established in 1935. Since the life expectancy for an American male at the time was only 58 years, this helped keep costs down.
Now, far from living on borrowed time, a 65-year-old man in Canada can expect to live another 19 years on average. For 65-year-old women, it’s 22 years.
The big question, and one which census data cannot fully answer, is whether people are working as seniors due to preference or necessity.
Is it because skyrocketing debt, housing and living costs have overwhelmed what these Canadians have put aside for retirement, especially those without relatively generous government or corporate pension income? The census showed that in 2015 one-third of Canadians did not contribute to any of Canada’s three major retirement savings schemes, a registered retirement plan, registered pension plan or a tax-free savings account.
Whether or not you have private retirement savings makes a difference. Seniors without private retirement income are more than twice as likely to be working full-time. But it doesn’t explain everything. Over 20 per cent of senior Canadians without private retirement income were working, but 15 per cent of those with such income were in the workforce too.
On the other hand, part of the explanation could be because senior Canadians are healthier and enjoy staying engaged in work, albeit more likely in a part-time role compared to middle-aged workers.
Some clues may come from the census details on the education level and occupations of senior workers. The two categories where seniors have a significantly higher share of jobs are “management occupations” and “business, finance and administration.” Furthermore, seniors with a bachelor’s degree or higher are twice as likely to be working as those with a high school diploma or less.
But again, this can be interpreted in opposite ways.
Are well-educated seniors with management and administrative backgrounds staying in the workforce since their experience is valued in the market with attractive roles and compensation?
Or are they still making up for the income they lost doing that six-year PhD in Roman Economic History while their peers were productively employed?
It’s also possible that debt plays a role here. A wide range of surveys show increasing numbers of people entering retirement age with outstanding mortgages or even credit card debt. While people with management and administrative roles may have had higher salaries in the working years, that also would have enabled them to rack up bigger debts to carry into their later ones.
It’s good that rising life expectancies mean we can expect to enjoy more Christmases than previous generations.
It would probably also be good if more of us found books on retirement planning under the tree.
Keith Halliday is a Yukon economist and author of the MacBride Museum’s Aurore of the Yukon series of historical children’s adventure novels. He is a Ma Murray award-winner for best columnist.