When star quarterback Tom Brady announced his retirement in the offseason – and then “unretired” soon afterwards, resuming his career – he was probably not aware of the fact that he’s a trendsetter.

More and more of us are “unretiring,” reports Edward Jones . “’Unretirement’ represents a growing trend among Canadians living in and approaching retirement,” an article on the firm’s website reports.  Citing recent Age Wave research, the article notes “33 per cent of recent retirees struggle to find a sense of purpose in retirement with new-found free time. Most Baby Boomers want to be more active, engaged, exploratory and purposeful in retirement than their parents and grandparents.”

So, for some of these folks, this leads to a desire to return to work, the article notes.

“When retirees stop working, it can create a void, often more social than financial. When asked what they miss most about their work life, 39 per cent of retirees say it’s the people and social stimulation, with only 22 per cent saying it’s the pay. The loss of social connection can lead to harmful isolation,” the article notes.

Okay, missing the work colleagues and all the social interactions can be part of it. Another part of it can be not having enough money in retirement, reports The Express.

“Given that living costs are rising and pay growth is pretty strong too, we might expect to see more people coming back to work through the winter and into the new year, particularly with vacancies so high and with so many employers keen to recruit,” Tony Wilson of the Institute for Employment Studies tells The Express.

The latest U.K. data finds that one in eight pension-aged Brits, a total of 1.46 million pensioners, are “in work,” with those over 65 being able “to claim a state pension while still working.” A further six per cent of current retirees are said to be thinking of making a return to work “to top up their pension income,” the article notes.

Investment News, looking at the U.S. market, says it may also simply be the great number of unfilled jobs out there that is leading to older workers being “actively recruited” for a return to work.

“We need older workers to stave off inflation and get the economy back on track,” states demographer Bradley Schurman in the article. “They are a key ingredient to solving the massive imbalance in the demand and supply of labour, which has created the ideal environment for the Great Resignation to thrive and is a contributing factor to increasing prices.”

The article makes the point that the waves of resignations by younger workers in the latter stages of the pandemic crisis led to job openings not seen since the Second World War.

“Today’s employment pictures looks a lot less like the pre-pandemic years and a lot more like those during the post-World War II, when America relied on older workers to fuel growth,” states Schurman in the article.

So, putting this all together, there are three factors that may be driving the “unretirement” trend. First, some older folks miss being at work and interacting with colleagues. Second, many retirees find (particularly with high inflation on the upswing) that retirement isn’t as affordable as they thought – so they go back to work due to income needs. The third idea expressed here is that the Great Resignation has created vacancies, and recruiters are looking to retired, experienced workers to plug employment gaps.

It’s an interesting phenomenon, and certainly is not something we saw when our parents retired. Typically, they left at age 65 and “fully retired,” with most never working for wages ever again.

Whether or not you become an “unretiree” one day, you’ll still want to have some retirement savings in your piggy bank. If you don’t have a pension plan through your workplace or if your workplace wants to introduce a pension plan, the Saskatchewan Pension Plan may be worth a look. This open defined contribution plan is available to anyone with registered retirement savings plan room. SPP will carefully invest any contributions you make and can help you turn them into retirement income when you finally put down the hammer for the last time. Check them out today!

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A staggering $1 trillion in Canadian inheritance money will be transferred this decade

Writing in the Financial Post, columnist Jason Heath notes that we are headed for all-time records when it comes to inheritances in this country.

“Estimates of expected Canadian inheritances over the next decade are as high as $1 trillion,” he writes, adding that that figure could be driven even higher by stock prices and real estate values.

While articles (and books) have been written about the idea of “dying broke,” it appears most Canadians don’t follow that view. Heath notes that 47 per cent of adults over 55, in a 2019 survey by Merrill Lynch and Age Wave, feel that leaving their kids an inheritance was “the right thing to do.” Similarly, he writes, 55 per cent of millennials felt their parents had an obligation to leave them an inheritance.

The idea of leaving money for the kids isn’t always talked about in retirement planning circles, notes Heath.

“Many people spend their working years scrimping and saving to be able to afford to retire. Inheritance pressure after retiring may limit spending in retirement. It insinuates that workers need to save for not only retirement, but also their apparent inheritance obligation to their children,” he writes.

If you are going to be receiving an inheritance, Heath suggests you not be in a rush to make decisions about it.

“Some recipients see it as a windfall and spend it frivolously. Others see it as blood money and feel a great burden when they inherit,” he explains.

He recommends doing nothing with the inheritance for a time – leave it in the bank for six months, he suggests.

If you are on the giving end of an inheritance, you can consider giving money to the kids while you are still around to see them enjoy it, Heath adds.

“Some people would rather see their family enjoy an inheritance while they are still alive. Making gifts to children or grandchildren can be a great way to do so. There are no tax implications of a gift of cash to an adult child or grandchild,” he explains.

Just be sure, he warns, that you are not “passing along too much too early… so as not to risk your own financial security.”

The article goes on to look at some of the complexities of leaving an estate – “the choice of beneficiary designations, use of trusts, implementing an estate freeze, or insurance strategies can… reduce tax and probate costs.”

Did you know that benefits from the Saskatchewan Pension Plan may be payable to eligible beneficiaries upon your death?

If you die before you retire, the balance in your SPP account will be paid to your beneficiary.

If you die after you retire, any benefits payable depend on your choices at the time of retirement.

The SPP Retirement Guide provides details on the three types of annuity you can choose from when you start your SPP pension. While the life only annuity doesn’t offer survivor benefits, the refund life annuity can result in a payment to your beneficiary if you die before receiving annuity payments equal to your account balance at the time the annuity was chosen. The joint and last survivor annuity provides a pension equal to 100, 75 or 60 per cent of what you were receiving to your surviving spouse.

If you choose to transfer your benefits out of SPP when you retire, no death benefits are available from the plan.

These survivor benefits can ensure that a measure of the security SPP has been delivering for more than 35 years can continue to a beneficiary or spouse. Check out SPP today!

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Pandemic is causing 8 million Canucks to rethink retirement

There’s no question that 2020 has been a year like no other. Its effects on the economy and our finances have been profound.

A new study by Edward Jones and research company Age Wave, reported on by Global News, shows what impacts the pandemic has had on retirement savings in particular.

The report says a whopping eight million Canadians “are rethinking their retirement timing” due to the pandemic. While one of every 10 Canucks still plans to retire early, “one third believe they will retire later,” citing financial concerns, the Global article notes.

“If many working adults were not adequately prepared for retirement, COVID-19 has thrown them even farther off course,” the article notes.

The study found that two million Canadians “have stopped making regular savings to their retirement savings.” Before the pandemic, the research shows, 54 per cent of adults were confident about retirement. Now, that confidence indicator is down to 39 per cent, Global reports.

“Those who think they’ll have to postpone retirement cited needing more income, shrunken savings, investment losses and increased uncertainty about how much they’ll need in retirement,” the article says. “The few who are considering anticipating retirement amid the pandemic, on the other hand, said they `realized that they were looking forward to retirement, or they want to spend time doing other things that are more important to them than work,’” the article states.

The article quotes financial author Alexandra Macqueen as noting that those with workplace pension plans, notably defined benefit plans, aren’t as impacted by the pandemic and can still choose to retire early.

(Save with SPP interviewed Alexandra Macqueen recently, here’s a link to the interview)

“What I’m … thinking more and more is that the difference between people with pensions and without is getting so much more stark,” she says in the Global article.

The article notes that older Canadians (boomers and the cohort that is older than them, the “Silent Generation”) are generally doing fairly well during the pandemic, while younger generations (millennials, Gen Z, and Gen X) are struggling.

The older are helping the younger financially, the article concludes, while the younger generations are making sure their elders are staying health, a “silver lining” of intergenerational cooperation amidst the pandemic.

The article underlies the disparity between those who have a workplace pension and those who don’t. When you’re in a plan at work, pension contributions are deducted from your pay – the savings is automatic, a “set it and forget it” way to pay yourself first.

The pandemic will eventually end, but if you lack a workplace pension plan, you still can set up an automatic retirement saving system of your own.

The Saskatchewan Pension Plan lets you automate your retirement savings through pre-authorized transfers from your bank account. You can start small – an affordable contribution – and ramp it up when you’re making more in the future. If there’s a trick to retirement saving, it’s to start doing it and then keep on with it. Starting and stopping won’t get you there. Pay your future self first. The money you set aside today may be missed in the short term, but in the long run you’ll have more security for the future, post-work years.

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