How Workers Will Respond

In Chapter 4, we found that the economy will want to keep us working longer in the years to come, simply because we won't have enough younger workers. The best estimate is that the economy's labour needs in 20 years' time would be satisfied if the average retirement age rose from the current 62 to about 66 or 67. Chapter 5 told us that we could, in theory, continue to retire at 62, but it would be increasingly difficult to do so in a world with lower investment returns and longer lifespans, as the real cost of retirement catches up with us. Doing the math, we confirm what we already know: saving for retirement would be much easier if we kept working, at least on a part-time basis, until age 66 or so.

On the surface, then, a convenient win-win situation seems to be emerging. To paraphrase a familiar Buddhist proverb, when the economy is ready to absorb new workers, the workers will appear. That's the theory. But how well is it going to work in practice? Will employees actually be prepared to retire later? There is mounting evidence that both attitudes and actions are evolving rapidly.

A 2008 survey1 revealed growing acceptance by pre-retirees of at least a moderate increase in the expected age of retirement. The study found that 35 per cent of the respondents aged 45 to 49 who expressed an opinion said they planned to retire after 65. In 1991, only 27 per cent planned to retire after 65. In a 2012 “TD Age of Retirement” report, 17 per cent expected to ...

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