Why do Canadians work in retirement?
More and more people continue to work after age 64.
More and more older Canadians are not retiring at 60, but continuing to work. In 2022, their number is up from 2021. According to data compiled by Statistics Canada, more than 50% of working seniors are now doing it for fun. They simply don't have enough money to live on.
Inflation seems to be to blame. But this is only partly true for Canada. The economy is fairly stable and commodity prices are moderate, especially compared to some countries in Europe and Asia. It is possible to live on a Canadian pension, because there are as many as 7 pension programs in the country. Canadians usually apply for more than one of them and get their benefits together.
So why do Canadian retirees have to work? The answer is unusual: they are paying off mortgage debt. Canada makes home loans to people at a fairly respectable age. For example, you can take out a mortgage at age 50, and sometimes at age 60. In the past two decades, the number of seniors with mortgage debt has doubled. They decide to buy their own homes because they plan to successfully pay the mortgage and still live in their corner. Life expectancy in the country is rising, so many of today's working retirees may live to be 100 years old. Their children's generation will live even longer. It makes sense that a well-deserved retirement can be postponed — there are still 25 years of active life ahead.
Canadians are also spending more and more time on education. Fifty-seven percent of 25— to 64-year-olds have a college degree. Another 25% of Canadians have completed college. Studying takes a long time, so Canadians are building a career later in life. Because of this, the purchase of their own home has to be delayed.
The Canadian Association of Retired Persons is pushing the federal government to eliminate the requirement to cash in retirement savings at a certain age. This is inconvenient for Canadian retirees: Some will need the savings sooner, but many prefer to continue working as long as possible.
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