Debt delays retirement for Canada's boomers: study

Fri May 8, 2009 5:33pm EDT
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By Ashleigh Patterson

TORONTO (Reuters) - More than a quarter of Canada's baby boomers believe they'll have to work longer than expected as paying down debt and building up a bigger nest egg become a top priority in the economic downturn, a new survey has found.

The number of boomers who cite reducing debt as their most pressing financial concern soared from 31 percent to 62 percent over the past six months, according to an online survey conducted by Ipsos Reid for Royal Bank of Canada.

"What we saw was a move toward living within your means, a move toward a more conservative approach to things," said Lee Anne Davies, a gerontologist and head of retirement strategies at Royal Bank. "And I think that's a reflection of what has happened in the last few months and how people really start to reprioritize."

Baby boomers, the post-war cohort born between 1946 and 1965, make up the largest population demographic in Canada, according to Statistics Canada.

Twenty-six percent of those surveyed said they may be forced to delay their retirement as they simultaneously aim to pay off debt and build up a nest egg.

"Working a few extra years can actually be a very smart move for them," Davies said about retirement planning.

"The last six months has given them more of a reality check. You get into retirement and the unexpected can occur and you'll need to have a plan to manage that, and part of that plan may mean working a few more years before you actually retire."

The findings represent a departure from the traditional retirement age of 65 and are in sharp contrast to government figures that show Canadians typically retire at age 61.   Continued...