Semi-retirement: Punishment or reward?

A new report has shown the job market for seniors could be as competitive as it is for youth and new graduates.

Semi-retirement: Punishment or reward?
Advisors have to start taking into account older Canadians’ desire or necessity to work as they retire when devising retirement plans.

"While the underemployment challenges facing today's youth and new graduates are more widely known, this latest research suggests that older Canadians and those approaching retirement age may also be feeling the pinch of underemployment at time when saving for the future is often at its most crucial," said Betty Miao, Executive Vice President and Head of Retail Banking and Wealth Management, HSBC Bank Canada.

Of those Canadians currently retired, 15 per cent say they made the decision to semi-retire due to a lack of employment opportunities later in life. Only Australian retirees (17 per cent) reported a lack of job prospects in greater numbers than Canadians, and respondents from both countries were well above the global average (10 per cent).  

The problem is not just limited to those on the cusp of retirement. In fact, 10 per cent of Canadians surveyed between the ages of 45 and 54 years old admit that their shift into semi-retirement wasn't a choice on their part, suggesting that in the post-downturn job market, many experienced workers are being overlooked for full time positions. 

Further, half of all semi-retired respondents globally say they changed careers when they stopped full-time work.

While some of these will be high achievers who reached their career aspirations and financial goals before retirement, the figures also point to a pool of wasted potential among experienced employees.

The numbers really highlight the importance for more aggressive savings for clients early on in their lives, considering the dwindling job prospects as they age.

The research also shows a significant shift in how Canadians plan to retire in the future.  

Whereas only 17 per cent of today's fully-retired Canadians say they semi-retired first, 45 per cent of working-age respondents say they plan to semi-retire before taking full retirement.

The trend towards an age of semi-retirement is reflected in survey results around the world, with an average 26 per cent of working-age people globally planning to semi-retire.      

"With government research suggesting a continued shortage of skilled labour in certain sectors and professions well into the future, it's fair to say that career opportunities look bright for at least some of those planning to work into their golden years,” said Miao.

“That said, whether you're hoping to semi-retire earlier on in life or you're one of the 15 per cent of Canadians surveyed who don't ever plan to retire, it's crucial that your financial plans are aligned to both your future aspirations, and the realities you may face later in life."