Retirement Planning Timelines Have Changed

Canadians are starting later, retiring longer and facing a much different retirement journey than previous generations. Alexandra Macqueen explains why.

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My mom had all her kids by the time she was 30. I had my first child when I was 34. So they had like a full decade of saving, you know, having that mortgage, paying it down.

Do you remember mortgage burning parties?

Absolutely. They were huge.

So mortgage burning party when they were in their early 50s, and then they had these DB pensions. But then the last 15 years of their working lives was dedicated to saving for retirement because the mortgage was paid and the kids were gone.

Right.

Every single element of that story has, has changed.

People don’t get married and buy houses in their 20s. It’s in their 30s now, so you’ve lost a decade, and the remaining decades you’ve got need to do more work in terms of saving for retirement. And then when you do retire, at whatever age that might be, you can expect many more years in retirement than your parents and your re- grandparents on average.

Obviously, you can’t predict for any one person. But the single largest change is that we’re living longer in retirement, and if you think about what I just said, we have fewer years to prepare for it because we’re all getting started later.

Yeah, I, I agree with all of that. And, you know, when you look at retirement planning, it’s funny, I’ll have friends say to me, “Hey, can you give me a, a, you know, a financial plan, a retirement plan? Help me look at mine,” et cetera. They’re hoping for a lot of precision, but we don’t know how long they’re gonna live, we don’t know what the returns are going to be, and we don’t what the inf- we don’t know what the inflation rate’s going to be.

Those are three pretty important variables in the planning process.