Seniors are remaining in the work force longer for a number of reasons. Financial need is a key one as people are finding that as we live longer, the extra money is needed to finance those extra years. Financial consultant Charlie Min says it is important to have an investment plan as there are fewer pension plans that guarantee retirement income. Photo courtesy of CNS

Investment plan essential as we live longer

By  Vanessa Santilli, Catholic Register Special
  • November 2, 2013

Updated 11/14/13

As the number of seniors staying in the work force increases for a variety of reasons — from living longer to the sheer number of baby boomers reaching retirement — it’s become more important than ever to have a solid investment plan. Without one, you could be forced to work well into your retirement years.

Anne, 59, is hoping to retire at 62.

“As I’m getting closer I’m starting to panic a little bit but I guess we’re just going to have to cut back a little bit and hopefully we’ll be okay,” said the parish secretary. “I am hoping to stick to that.”

She doesn’t have a work pension, but says she is fortunate that her husband does.

“If you don’t have some sort of work pension, it would be really difficult to retire,” she says. “The government pension is so minimal that there’s just no way of surviving on that. If you start withdrawing from your savings at 60, you will outlive your funds.”

According to a report from the Vanier Institute of the Family on working seniors in Canada, the participation rate of employed Canadians over 65 has nearly doubled in the past decade to account for 12.6 per cent of the work force in 2012. According to the 2011 Canadian census, for the first time there are now more 55-64 year olds in the work force than people 15-24.

The report attributes the rise to various factors, including Canada becoming a healthier society, an increasing life expectancy, higher household debt levels and the end of mandatory retirement. Also, in the sluggish economy of recent years, many near-retirement people are forced to help their children make ends meet. Some people keep working simply because they enjoy their jobs.

Juliana, 58, can attest to the value of an investment plan. While she hired a financial consultant to put together her plan, she sees many seniors around her who are still working because they have no choice.

“I go out in my spare time with St. Vincent de Paul in my church and people walking with a cane are still working because they can’t afford living without that work,” says Juliana, who works in the health care field.

“You would be surprised that it’s more people than you think. It makes your heart break.”

While Juliana doesn’t have a set age in mind to stop working, calling her work “my hobby, my leisure and my life,” she says retirement is a concern.

“It’s our responsibility to take care of ourselves,” she says. “You really can’t rely on anybody except God.”

“Nowadays, there are fewer pension plans that guarantee retirement income,” says Charlie Min, a financial consultant with Investor’s Group. He emphasizes the importance of being prepared for the future.

“As a result of the market turmoil, there’s that fear of starvation,” says Min, who has led the evening Mass music ministry at the Newman Centre’s St. Thomas Aquinas Church for the past decade.

But it’s not all bad news. Bill Schmidt has seen the fruits of his planning pay off. A chartered accountant, he was able to retire at the age of 60.

“The only thing I’ve done differently from perhaps a lot of other people my age is the magic save, save, save,” he said.

Many people have preconceived notions that you need a lot of money to start investing, says certified financial planner Joseph Marquez, a parishioner at St. Clement’s parish in Etobicoke. This, however, is not the case.

“For those who are starting late with their retirement plan, there is still a way to build a comfortable retirement,” he says. “It may entail reducing your monthly spending in order to increase the contributions made towards RRSP (Registered Retirement Savings Plan) and TFSA (Tax-Free Savings Account) investments, within one’s contribution limit.”

(Santilli is a freelance writer in Toronto.)

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