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Trevor Hancock: Retiring at age 65 might not be best for you

I’m in my 68th year, still going strong and intending to keep working for some years. Blame it on good genes.

I’m in my 68th year, still going strong and intending to keep working for some years. Blame it on good genes. But also, why would I stop when they pay me and I am having fun?

I realize not everyone is in good health at my age or younger, nor is everyone having fun or getting paid enough. But reaching the age of retirement, as part of the long-dreaded “grey tsunami” of aging baby-boomers, gave me reason to ponder this business of retirement.

In particular, why do we typically retire at age 65, when the average age of death in Canada now is above 80 years? And a couple of related questions: Are we healthy enough to keep working? And what are the health impacts of retirement anyway? (That’s a question I will address in my next column.)

The answer to the first question is that we retire at age 65 in part because the German government set that as the age of eligibility in 1916. In fact, the first state pension plan was introduced in 1889 by Prussian chancellor Otto von Bismarck, and the age was set then at 70. This might have been because most people were dead by then, which made it a relatively cheap initiative. But that is obviously no longer the case.

It has been estimated that life expectancy at birth in Canada in 1901 was 47 years for men and 50 for women, and did not surpass 65 until about 1940 for women and 1950 for men. In 2007-09, it was 83.3 years for women and 78.8 for men. In fact, if they reach 65, women can expect to live an additional 21.6 years (to over 86), and men an additional 18.5 years, to over age 83.

Unsurprisingly, given the increase in life expectancy and dire (but generally overstated) predictions of the cost impacts of the grey tsunami, governments everywhere are thinking about increasing the age of retirement — it’s either that, or increase pension contributions or cut back benefits. There are no easy options, it seems.

As part of this, governments are also removing the mandatory age of retirement, as the B.C. government did in 2008 — and so they should. It’s a human-rights issue, as those who do not wish to retire, or cannot afford to, should not be prevented from earning a living on the basis of age discrimination. But it also means many people delay collecting their pensions.

But work is not only about earning a living; it can have many benefits, including providing a sense of meaning and purpose and a valuable social network and role.

So if you are competent and content — or broke — and if your work pleases you or you need the money, why not continue to work? A number of self-employed people do, from farmers to lawyers, working into their 70s, 80s, even in some cases into their 90s.

But if the age of retirement is going to increase, will one size fit all? Are we healthy enough to keep working? It seems to me that if we abolish mandatory retirement and increase the age of retirement, we also need to consider flexible retirement plans. People who work in construction or other forms of heavy manual labour, or in boring and unfulfilling jobs, might not be physically or psychologically able to keep working even to age 65, never mind older.

Moreover, we know that life expectancy is related to socio-economic status, with people with lower status having shorter lives. But in the interests of social justice, should we not all have roughly the same amount of time on a retirement pension? In which case, those with lower status should retire sooner, and those with higher status later. People with stimulating jobs that are not physically taxing, might well be able to work until at least 70, if not beyond.

In doing so, they would continue to pay taxes and make pension contributions, reducing the cost of pension plans while enabling society to afford the higher costs for those who retire earlier. Moreover, if work provides both social and health benefits, they might require fewer health and social services, further reducing costs.

So why retire at 65? It’s time for a serious discussion.

Dr. Trevor Hancock is a professor and senior scholar at the University of Victoria’s school of public health and social policy.

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