Read this article and comments on moneyville
By Sheryl Smolkin
Seventy is the new 60. Sixty is the new 50. If you believe everything you read, increasing the age for OAS eligibility from age 65 to 67 might make sense. But the fact is that not everyone feels ten years younger or has a well-paying full-time job so they can postpone retirement and work longer.
In a new report from the Canadian Centre for Policy Alternatives, economist Angella MacEwan reports that a 2008 Statistics Canada survey of older workers (55+) found that only 30 per cent retired because they were financially ready.
One in four fully-retired workers over 55 listed poor health as their reason for retirement, and 89 per cent of older workers who were unemployed and not looking for work cited long-term disability or short-term disability as a barrier to paid work. A further 7 per cent of retirees left the workforce to care for a partner.
Furthermore, another one in five retired because they were displaced by layoffs or plant closures. Older workers who are displaced because of plant-closure or layoff often face longer periods of unemployment than younger workers and end up in lower paying jobs.
Even where seniors are able to continue working, a very large proportion of these people are in low-paid part-time sales and service jobs. In fact, fully one in three employees over 65 earned less than two-thirds of the median hourly wage. Self-employment is increasingly common for some seniors – typically those with a university degree – but half of self-employed seniors still earn less than $5,000 per year.
To replace the combined OAS/GIS benefit of about $14,000 for one year, a senior working at the minimum wage of about $10 an hour would have to work 28 hours a week, or about 10 hours a week to replace the basic annual OAS benefit of $5,000.
Some people – most often professionals and managers who are in good health and able to find or create work which suits their needs and interests – do willingly work past age 65. Others can be encouraged to do so through positive workplace policies.
But I agree with MacEwen and the Canadian Centre for Policy Alternatives that choosing to work longer is one thing, but it is illogical to assume sick or laid-off Canadians without pensions or large savings can keep working past 65, particularly given the high probability that the only jobs many will be able to find are part-time and low paid.
What do you think?