The New Retirement Age Might Be 70

For those in the working world now in their forties, their dream is to retire before age 65.

But according to a new survey, Later Retirement: The Win Win Solution by the CD Howe Institute, the new retirement age will probably be age 70.

The report's author, Peter Hicks, doesn't think it makes sense to continue basing everything on age 65 when the retirement age could move to age 68 or 70.And Hicks writes the delay in retirement will have "positive economic, fiscal and social effects on Canada."

"Delaying work-retirement transitions by five years would have large, positive economic and fiscal effects, significantly reducing the much-discussed negative effects of population aging on growth and pension funding. Other gains in social well-being appear likely, if harder to quantify."

Read Federal Budget coverage by Huffington Post Canada

This might seem strange considering most of us have heard dire warnings about retirement in the future - that it will have a negative effect on country's economy and there won't be any money left to pay pensions.

A few years ago, a series by The Globe and Mail painted a bleak picture for those getting close to retirement age: "Canadians can no longer assume they will retire with security. Many are seeking increasingly scarce work while others flail as their once-flush retirement accounts hemorrhage."

But do we deserve to be given the big send-off at an established age? Or should we get to choose when we retire, thanks to being prudent with our savings during our working life? Hicks believes there is no "normal age" for retirement and that it all relates to the baby boomers.

"The aging of the babyboom generation was associated with profound changes in our economic and social structures," writes Hicks. "The employment rates of older workers have been on an upward trend since the mid-1990s, while demographic aging suggests continuing strong labour-market demand for future older workers who will be much better educated than their predecessors. Babyboomers have different preferences and expectations for work and leisure in retirement."

According to Hicks, this generation is determining the definition of retirement and for them, it may not mean age 65 and the big send-off. Delaying retirement five years could mean more money in the pension fund and less strain on government.

In the recent Federal Budget it was announced new public servants will be retiring at age 65 when it had previously been age 60. As the first wave of baby boomers hit retirement age in 2011, changes will start happening - and its these effects that Hicks believe will affect lasting change on the work world.

Original Article
Source: walletpop
Author: Waheeda Harris