For most of us, we tend to split life up into three distinct stages. Childhood and education, working, and retirement. However, these stages are changing and beginning to blur together, and the reason for this is far more complex that many may originally think.
History
Contrary to popular belief, retirement is actually quite new, with Germany being the first country to introduce retirement benefits in 1889. Retirement was mandatory and forced those aged 70 to retire in addition to paying them a pension. That being said, many countries still did not introduce retirement into their own legislation until the Great Depression.
In the 1930s, the United States government saw sky rocketing unemployment rates among young men, because older men refused to leave the workforce. As a note, women would not enter the workforce en masse until the 70s. Still, in 1935, the US government introduced retirement as a way to force older men out of their jobs. They began offering pensions and marketing retirement as something desirable for older members of the workforce. Something which may surprise people is that these efforts were largely unwelcome, and it took well into the 50s for Americans to begin to accept the concept of retirement.
Current State of Retirement
Unfortunately, no matter how accepted retirement is today, many people are either unprepared for it, or have already resigned themselves to working for the rest of their lives. Retirement as we have come to understand it is changing, and its short lifespan may be coming to an end.
Monetary Reasons to Delay Retirement
The most significant factor in people either delaying retirement or not retiring at all, is due to financial reasons. We are currently seeing an increased cost of living while wages and pension plans have largely remained stagnant. This means that more people are living paycheque to paycheque for much of their lives, and when they do reach retirement age, they receive pensions that have not been increased to keep up with the rate of inflation.
Many people are carrying debt well into their later years, and many people don’t qualify for pensions at all. It is also important to note that many businesses do not offer pensions, which means that saving for retirement is largely left up to the individual. For those who did think they saved enough, many are still going back to work due to inflation.
Another important factor is that when pension plans and other government assistance programs were developed, the average lifespan was shorter than it is today. With people living longer, they’ll need to have more money saved than they may have originally expected, which means that if they don’t run out of money soon due to trying to maintain a lifestyle that they can no longer afford, they will run out of money eventually.
Personal Reasons
Traditional retirement can lead to boredom and restlessness. Many people find purpose within their job and take great pride in being able to contribute to society and to their communities. Many people often find that their social connections will be lost if they leave their jobs, as many did not make social connections outside of their colleagues.
Demographic Reasons
There is also the important factor of falling fertility rates worldwide. In Canada, there are fewer children under the age of 15 compared to people who are working and are 65 years and older. With immigration, our loss in workers is less urgent than in other countries such as Japan, but the Canadian labour market is still being hit.
Additionally, there was a mass exodus of older workers at the beginning stages of the pandemic, with those reaching retirement age choosing to retire early. This resulted in a labour shortage that will continue as skilled workers choose to retire. Canada’s work force has been declining steadily for decades now and will not return to Baby Boomer numbers. This is something that the job market in general has been unprepared for.
As such, many Baby Boomers are needed to stay in the workforce on a part-time or flexible basis so companies can continue to use their expertise and make up for the gap in skilled workers.
Lauren Schwartz | Staff Writer
