The days of traditional retirement at age 65 are over, a new survey shows. Instead, a majority of Canadians now are planning a “phased-in” form of retirement because many will need to earn additional income to top up their savings or pension to maintain their standard of living.

The annual survey on retirement for Desjardins Financial Security shows 61% of Canadians aged 40 years or more are planning a phased-in form of retirement or progressive retirement. Of those wishing to retire, 61% plan on becoming self-employed and working 21 hours a week on average.

“Baby Boomers will create a new generation of progressive retirees as Canadians need to earn additional income to top up their savings or pension to maintain a standard of living that meets their requirements,” says Taylor Train, Director of Business Development for Desjardins Financial Security. “This has become apparent with the rising number of Canadians who are self-employed working in new careers.”

These people are still officially retired, as per the ‘old’ definition, but gainfully employed before they stop working all together, Train says in a release. The key regional difference is that respondents from the Atlantic Provinces indicate a preference for complete retirement (54% vs 41% for partial retirement).

Although, on average, of those baby boomers surveyed (workers 40 to 54 years who wish to retire at 58 years) 50% of these respondents think that it will not be possible for them to retire at this age. The key stumbling block they indicate is that they only have 11 years, on average, to reach the amount of savings they believe is required to fund a comfortable retirement. The majority of Canadians over 40 years old (92%) thought that retirement at past age 65 would be attainable, and the figure drops to 67% for those targeting retirement between the ages of 56 and 65.

“The new reality shows that Canadians need to forget their dream that they can stop working at age 65,” says Train. “People need to recognize that longer life spans reaching into the early 80s, on average, will result in a period of some form of convalescence during retirement that requires out-of-pocket costs for medical care. Then one compounds that with the weak financial market performance experienced over the past years, and workers have to face a new reality for their retirement.”


The survey of 1,501 adult Canadians was conducted by SOM of Montreal between Dec. 5 and Dec. 22, 2003. The sampling plan provides proportional estimates with a maximum margin of error of plus or minus 2.6% at a 95% confidence level.

According to the survey, inactivity is the main reason cited for progressive retirement (83%), but having additional income and other safety nets such as insurance and social benefits are also important to those entering their retirement years.

“It is incumbent on financial planners, employers and the government to educate individuals on not only their financial needs for those 20 years on average of retirement after age 65, but also, within that time frame, the duration, which could be over several years, that retirees will be expected to pay old age home and medical costs for various ailments or illnesses,” says Train. “The new retirement landscape demands more than putting money aside for day-to-day living.”

Canadians, particularly retired people are paying more attention than last year to savings management. Compared to the January 2003 survey, there is a significant increase in the proportion of fully retired Canadians who pay special attention to the accumulation of savings (85% vs 72%), who have a retirement savings management plan (65% vs 54%), and who have prepared this plan themselves (43% vs 29%).

“Even as stock markets improved in 2003, most retired people are invested in what they consider safe investment products such as guaranteed investment certificates or term savings and these vehicles are the source of their post-retirement income,” explains Train. “With such low interest rates being offered by safe investment products such as these, Canada’s retirees need to closely manage their savings.”

“Also, employers need to rethink how to capture what retirees take with them and how to create an intergenerational transfer of skills,” adds Train. “Otherwise years of corporate dollars spent on culture and skills training walks out the door, taking more years and dollars to amass the same knowledge in new workers.”