by Georgia Lay and members of the CCCA Seniors Committee
Labour force participation rates for Canadians over 65: Canadian Centre for Policy Alternatives
Last month’s Seniors’ Committee column examined income and housing for seniors in Centretown. This month, the CCCA Seniors Committee decided to explore the financing of longer life spans further.
The 2012 federal budget will delay by two years the age at which OAS benefits commence for those born after 1962. For this demographic cohort, the loss could be about $13,000 (present value) from their life-time incomes. How will they make up this lost income?
Provincial and federal legislatures have, for the most part, abolished mandatory retirement ages. During the last decade, more and more seniors have been working beyond what used to be the mandatory retirement age.
The Canadian Centre for Policy Alternatives (CCPA) has published a report, Working After Age 65, which explores why and which seniors work later in life. The chart at the right illustrates the recent growth in the numbers of working seniors.
As the report notes: “since 2000, participation rates for men 65 to 69 have almost doubled, rising from 16 percent to 30 percent in 2011. Participation rates for women over 65 have more than doubled over the same time period, from 7 percent to 18 percent.”
The probable reasons cited for these increases include “a longer life span, the decline in workplace pension coverage, and the changing nature of work by occupation and industry.”
For an increasing number of seniors, working after they start receiving CPP/QPP and OAS benefits makes financial sense, especially for those with little or no income from either private pension plans or investments such as RRSPs.
Statistics Canada reported that in 2006, seniors across Canada relied on government transfers (OAS/GIS, CPP/QPP and employment insurance) for almost one third of their income. Private pension plan and investment income provided one quarter, and employment income accounted for another 12 percent of total income. (Statistics Canada, 2007 Annual Estimates for Census Families and Individuals)
When private pension plan and investment incomes decline, as they did during the global financial crisis, the obvious recourse is to postpone retirement.
According to the CCPA study, of the seniors who do continue to be employed beyond age 65, 35 percent of men and 54 percent of women work part-time. They are more highly represented in sales and service occupations than younger workers (25 % for those aged 65 and over, as compared to 19.8 % for those aged 25-54.)
What about workers who cannot postpone retirement?
A 2011 Statistics Canada report on fully retired Canadians aged 55 and over (Retirement, Health and Employment among those 55 Plus) proposed various motivations for retiring. The most frequently cited reasons were:
Financially possible (34%)
Wanted to stop work (33%)
Completed required years of service (29%)
Health/disability (24%)
With almost a quarter of older workers forced out of the labour market by ill health, raising the eligibility age for OAS/GIS will disadvantage a significant number of seniors.
One downstream societal impact of delayed retirements, which the CCPA study did not examine, is a reduced number of senior volunteers available to sustain community life. The average number of hours volunteered is highest among seniors (Volunteer/Bénévoles Canada, Bridging the Gap, 2011) and the most active of them are now slowing down in their “volunteer careers.”
So we must ask ourselves: what will be the impact on our communities when tomorrow’s seniors are working part-time rather than volunteering their “golden years” to the community?
Frail seniors and the marginalized who depend on volunteer services today could well be out of luck tomorrow.