Demographic changes are impacting the retirement landscape

Canada’s population is aging rapidly and as baby boomers are delaying retirement, the workforce is also growing older, according to a new study from Statistics Canada (StatsCan).

StatsCan reports that in 2016, 38% of Canadians aged 55 and older were still in the workforce, which represents the highest proportion since data has been collected (starting in 1976). In 1996, just 24% of older Canadians were still working.

The increase in labour force participation was widespread across age groups, including seniors aged 65 and older and across all categories of educational attainment, the StatsCan report says. Among seniors, 14% were still working in 2016, up from just 6% in 1996, StatsCan reports.

Several factors are driving the increase in labour force participation among older Canadians, including an increase in the educational attainment, the report says.

“However, more than half of the overall increase in the labour market participation of seniors are due to other … factors,” the StatsCan report says. “These factors could include an increase in the debt levels of older Canadians, increased wages and more favourable employment opportunities, or better health.”

The aging of the Canadian workforce tracks the aging of the overall population. In 2016, the 55-plus category accounted for a record 36% of the working age population; this is forecasted to grow to 40% by 2026. Ultimately, this trend “will create a challenge for the labour market, government finances and the health-care system,” the study says.

“As baby boomers age, it is unclear whether the labour market participation of older Canadians will continue to increase into the future,” the report says, although it notes that factors such as longer life expectancy, debt levels and job opportunities may help sustain the trend.

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