On Retirement — early or never?

Marie Engen (photo: Google Plus)

By Marie Engen, Boomer & Echo

Special to the Financial Independence Hub

Our current concept of retirement is relatively new. Past generations had no idea what it meant not to work. They stopped only when they physically had to.

Here’s an interesting tidbit – in 1890, nearly everyone died while still employed, and if they were healthy enough not to expire on the job, they retired at age 85.

Boomer parents were retirement pioneers.

The retirement age of 65 was first set in Germany in 1916, adopted by the U.S. in 1935, and in Canada shortly thereafter. It was probably the advent of CPP and OAS benefits that created the mindset to retire at age 65. Then came the lure of Freedom 55 and people were led to believe that 55 was a reasonable retirement age.

Related: How much do you need to save for retirement?

Presently the average age of first retirement is about 56 years, often followed by a return to work, at least part-time.

According to Statistics Canada, the retirement age is actually increasing. The median is 62 for men and 61 for women, although 32% of Canadians expect to still be working full-time at age 66. 20% don’t plan to retire at all.

In organizations where pensions enable earlier departures from work, the lure often takes precedence over job satisfaction. Perhaps that’s why Federal government employees ditch work at the median age of 58.

Of course, many people (especially those with no company pension plan) are just not ready financially to stop working, but many others stay employed for job satisfaction, social interaction, and a sense of purpose.

One study found that mortality rates improve with an older retirement age. Here’s a sobering finding: 16% of people who retired before age 55 had died by age 65.

Extreme early retirement

Not everyone wants to work until they are 65. Do a Google search on early retirement and you’ll find over 1.6 million results. I’ve read a lot of articles about people expecting to retire at ages 45, 40, 30, and even mid-twenties.

Related: Why options mean freedom when it comes to retirement

Early-retirement blogs give some good – albeit basic – financial advice to achieve this. My questions are, however:

  1. Who will do the work that will keep our country economically productive? And,
  2. What are these people going to do with themselves for 50-plus years?

Here’s a condensed quote:

“I will start every day at the gym and work out for 2 hours. Then I’d practice the piano for 3 hours. I’d become fluent in Mandarin, learn to handle a polo pony and learn to fly a helicopter. If I didn’t have a job I’d be living my dream.”

Maybe it’s just me, but that sounds, well – self-indulgent. I don’t get it.

If you dislike your job so much that you want to “retire” within five or ten years, you need to find a more enjoyable career.

Final thoughts

Perhaps early financial freedom is really the goal. I like the concept of “findependence,” a term coined by author Jonathan Chevreau.

Financial independence means you have sufficient resources to give you the freedom of choice, to sustain a lifestyle that allows you to pursue whatever truly makes you happy – to leave a high stress job for a lower paying one that’s more satisfying, take some time off for whatever reason, go back to school, or write a screenplay.

So, notwithstanding the obsession with extreme early retirement, the trend is edging toward a longer working life.

The Internet, cell phones, and video conferencing allow you to work from almost anywhere, and with new technologies, it’s only going to get easier.

Marie Engen is the “Boomer” half of Boomer & Echo. In addition to being co-author of the website, Marie is a fee-only financial planner based in Kelowna, B.C. This article originally ran on the site on March 24th and is republished here with her permission. (Also note the 26-plus comments that follow the piece, which provide further perspectives on Retirement and yes, Findependence.)

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