Transitioning Retirees Going Back to Work

According to a study published by Statistics Canada this year[i], approximately two-thirds of employed Canadians entered their fifties in long-term jobs.

Also, over one-half of Canadians aged 55 to 64 who left those long-term jobs between 1994 and 2000 were re-employed within a decade.  

Men were more likely than women to be re-employed. Amongst men who were re-employed after exiting their long-term job at age 60 to 64, 42% were re-employed the same year their long-term job ended and another 21% were re-employed the following year. But, the probability of re-employment fell sharply in subsequent years. 

There were three key reasons why older workers were less likely to return to work: when they left their job because of illness or injury, when they had pension coverage, or whose long-term job was in the public sector.

How long did a return to work last? For men who exited at age 60 to 64: about 4.6 years, on average. For women it was less: on average, 3.8 years. Earnings were about 18% of those they had received when employed in their long-term job.

Pre-retirement planning therefore, involves a significant focus on income layering that includes an employment income component. This will be discussed in more detail in the September Distinguished Advisor Workshops and in the newly updated Tax Efficient Retirement Income Planning course, to be released next month.