You've diligently saved, invested wisely and eliminated debt, but the choice when to leave the workforce may still be out of your hands, according to a new RBC poll released on Wednesday.
Only 62 per cent of Baby Boomers made the choice when to retire, reports the third annual RBC Retirement Myths and Realities Poll conducted by Ipsos-Reid. Perhaps more surprising, 20 per cent of Boomers knew only one month or less that they were about to leave the workforce permanently. An estimated 42 per cent had no more than six months of lead time before they retired.
The findings of the poll are in stark contrast to the perceptions of working Canadians. According to the findings, 85 per cent of Boomers with more than $100,000 in financial assets believe they will retire on their own terms.
However, older workers have increasingly been delaying their retirement since the mid-1990s, according to Statistics Canada. The employment rate for working Canadians over the age of 55 has steadily increased between 1997 and 2010 with men's participation rising from 30.5 per cent to 39.4 per cent and women's participation rising from 15.8 per cent to 28.6 per cent.
Unexpected retirement or delayed retirement makes early financial planning ever-more crucial, says Roger Mannell, director of the RBC Retirement Research Centre at the University of Waterloo.
"As someone who not only studies successful aging, but who is retiring within a year, I've given much thought to my retirement. Many may be thinking of retirement as a vacation without yet having planned for the health, lifestyle, and financial considerations of the next 20 to 30 years of their retired life," he said in a release.
Health plays a critical role
Of those who took control of their retirement timeline, health was cited as a main reason for leaving the workforce, followed by having saved enough money and being unhappy at work.
More than half of retired workers over the age of 55 have been diagnosed with three or more chronic conditions -- including high blood pressure, diabetes, arthritis -- according to the Canadian Centre for Policy Alternatives. Similar to RBC's findings, one in four retired Canadians cited poor health are the reason they left the workforce, shows the CCPA's Working After Age 65 report.
"Good health remains a top priority in retirement planning and you need to consider how this impacts your finances," Amalia Costa, head of Retirement Strategies at RBC, said in a release.
"When we work with individuals who are preparing for their retirement, we consider both their lifestyle and financial situation, as a good financial plan needs to include both. While you can't always control the timing of your retirement, you can control how prepared you are by knowing what to expect."