Alison Griffiths

Work till you drop? Count on it. At least that's the conclusion after a recent CIBC poll of Canadians 50-plus years old. Since the survey was released this week, there has been much breast beating about the fact that 53 per cent of those questioned expect they'll still be working past the typical retirement age.

When published the findings, under the headline "Most Canadians plan to work after retiring", 94 angry comments followed such as:

"Many of us will have no choice but to work, it's that or starve, plus the Canada Pension Plan will be bankrupt before us early 50'ers make it to ... 68 is it now?"

"I think the title is wrong. I think it should be "Most Canadians are forced to work after retiring."

"One income used to suffice to have quite a comfortable lifestyle and retire at an early age to enjoy life. Nowadays it takes two incomes and even so people are forced to retire way past 65 — the standard of living in Western countries has gone down the toilet.

"We're a nation of debt slaves and most of us, like it or not, will never be able to retire."

"Work — where?"

Before we all throw up our hands and decamp to Panama (where the livin' is easy and still relatively cheap), let's just parse the survey's numbers and the conclusion.

First of all, the real issue is not being forced to work past retirement age, per se. The problem is lack of savings. Nearly half of those 50-somethings surveyed have less than $100,000 put aside, including RRSPs.

Despite widespread misconceptions, Canadians will be able to count on CPP and OAS in retirement. However, politicians are fond of pointing out that these social programs are only two legs of a four-legged stool, i.e. don't rely on the government alone to keep up your pre-retirement standard of living.

The third leg of the stool is the workplace pension. But the number of Canadians covered by a defined benefit (guaranteed) pension (or DB plan) is declining and the one per cent drop of those with such plans from 2009 to 2010 is only going to increase.

Increasingly, workplace pensions are defined contribution plans, group RRSPs or pooled registered pension plans, which don't guarantee a set pension income. Instead, they rely on how well the funds are invested by whichever pension manager (usually an insurance company) has been selected by the employer.

Most Canadians don't have a clue how well their workplace pension plans are performing, much less how the money is invested. There was considerable shock during the financial crisis when employees looked at their pension reports only to find them worth far less than a couple of years earlier. Some pension plans lost 30 to 40 per cent between 2008 and 2009, thanks to stock market declines.

The fourth leg of the stool, supposedly buttressing those workplace pensions, is personal savings. Unfortunately, we all know how difficult it has been to save over the past decade because Canadians have been very busy racking up record debt. Repeated surveys have found that that the majority of Canadians would face financial difficulties after a single missed paycheque.

So, the real problem about retirement is a combination of low savings plus lower-than-expected pension returns and high debt. Fortunately, the over 50 set can improve the latter by devoting themselves (with a second job or even downsizing) to paying down debt.

Readers should be aware that polls, such as this one commissioned by CIBC, are hugely popular as a very cost effective way to get an institution's name and message into the media. Accordingly, the most provocative and eye-catching statistic will often be featured even if it's somewhat misleading. I've found that careful reading reveals interesting additional information.

Yes, though 53 per cent of over 50s plan to work past the traditional retirement age, only a third of them say it's because they need the money. So, only 17.5 percent of the over 50s surveyed will work past retirement because they have to.

In fact, the majority who intend to be working seniors will be taking on part-time work in order to keep busy and stay engaged with the world.

The CIBC survey offers an interesting, partial picture about the state of affairs for the 50-plus crowd. But media reports have made it seem like an entire generation will be forced into servitude, walkers and all, until they can no longer utter the words, "Welcome to Walmart."

Actually, I am far more concerned about the retirement situation for those in the 30 to 45 age bracket. But that is fodder for another column.

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