Many Canadians (81 per cent) plan to keep working in some capacity during their retirement, according to a survey released by BMO Financial Group.
"It's clear that many Canadians are looking to generate additional income during their retirement years," said Marlena Pospiech, senior manager of the BMO wealth planning group at BMO Financial Group. "People are living longer than ever before so, for an increasing number of Canadians, retirement savings may need to last more than 25 years.”
With the decline in employer-sponsored defined registered pension plans and reforms to government pension plans, there's now a greater need for people to supplement their income during retirement to compensate for that income gap, she said.
“This is particularly true for those who haven't been saving aggressively for retirement through retirement savings vehicles such as RRSPs and TFSAs."
Many view a gradual transition from work to full-time retirement as the optimal choice, said Pospiech. Not only does working longer benefit a person’s bank account by generating additional income, it also helps keep retirees mentally active, involved in the community and contributing to the larger economy, she said.
More than one-third (39 per cent) of the 1,000 respondents said it’s likely they will start their own business after they reach retirement age of 65. The top reasons for starting their own business in retirement are: a need for additional income (75 per cent); a desire to stay sharp, mentally focused (62 per cent); and to have an enjoyable hobby (53 per cent).
Men are more likely than women to start their own business in retirement (46 per cent versus 33 per cent), found BMO, while people in Alberta are the most likely to start their own business in retirement (53 per cent) while Quebecers are the least likely (25 per cent).
© Copyright Canadian HR Reporter, HAB Press. All rights reserved.