Workers are delaying retirement by an average of three and a half years compared with the mid-1990s says a new study from Statistics Canada, but they are still spending as long in retirement due to increased life expectancies.
A study released Wednesday by StatsCan, reports that a 50-year-old worker in 2008 could expect to stay in the labour force 3.5 years longer than in the mid-1990s. According to an indicator that tracks the retirement behaviour of Canadians, older workers have been increasingly delaying their retirement since the mid-1990s.
“This is consistent with the increase in the employment rate of older Canadians that began about the same time,” it notes. In 2010, the employment rate of individuals 55 and older had reached 34%, up from a low of 22% in 1996.
According to the study, in 2008, an employed 50-year-old had an expected additional 16 years at work. Whereas workers of the same age in the mid-1990s could expect to work 12.5 more years. The 3.5-year increase was the same for both men and women, it notes.
StatsCan says that during the 1980s and early 1990s, there was a trend toward early retirement prompted by high public-sector deficits and downsizing among private-sector organizations. “However, since the mid-1990s, the tide appears to have turned,” it says.
Even though they are delaying their retirement, Canadians are not necessarily spending less time in retirement, StatsCan says, as life expectancy has increased too. It reports that the expected length of retirement, which increased from 11.2 years in 1977 to 15.4 years the mid-1990s and has remained relatively stable since. In 2008, it was 15 years.
The trend for women was similar. Between 1977 and 1996, the estimated years of retirement for women rose from 16.4 to 20.6. In 2008, women would spend 19 years in retirement.
As a percentage of total life expectancy, the expected length of retirement from the age of 50 was about the same in 2008 as it was in 1977, it notes. In 2008, 50-year-old men could expect to spend 48% of their remaining years of life in retirement, compared with 45% in 1977. In 2008, 50-year-old women could expect to spend 55% of their remaining years of life in retirement, nearly identical to the proportion in 1977.
StatsCan says that delayed retirement could moderate some of the economic challenges of population aging. However, it cautions that a drop of hours worked by older workers could partly offset the impact of an increased expected work life on economic growth. Individuals aged 55 and over reduced their average work week by one hour between 1997 and 2010, it reports.