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Monday, May 29, 2006

SPOTLIGHT: Age of retirement

Three decades of change

THE AGE OF RETIREMENT has changed dramatically during the past three decades.

The median retirement age was close to 65 in the late 1970s and early 1980s, but it has declined considerably since that time.

From 1986 to 1993, the decline was more or less steady. The sharp drop from 1986 to 1987 is likely explained by the lowering in 1987 of the minimum age at which one could draw benefits from the Canada Pension Plan-from 65 to 60.

The median retirement age increased in 1988, probably because most people wishing to take advantage of this early retirement option had done so the previous year. Following 1988, however, the downward trend resumed, stabilizing somewhat after 1997.

Retirement as workforce reduction tool

The retirement age fluctuations in the 1990s may reflect government cutbacks and corporate downsizing. The popularity of early retirement incentives as a tool for workforce adjustment may also have had an impact.

Men and women

Women generally retired slightly earlier than men over most of the past three decades. There were exceptions to this, however. In 1986, women retired later than men. After some fluctuation following 1999, the median retirement age stabilized, at 60.8 overall.

Education

In 2000-2004, the median age at retirement was inversely proportional to educational attainment. The median age at retirement for those with a university degree was 59.8 years for men; 58.3 years for women.  The median retirement age for those with only elementary-level education was highest, with men retiring at 64.9  years, and women, at 64.6.

Freedom 55?

During the period 1995-1999, the most popular age at retirement was 60 to 64, with one third of retirees leaving the workforce at this age.

From 2000 to 2004, the most popular age at retirement was divided almost evenly among the ages of 55 to 59 and 60 to 64 (30% and 31%, respectively).

For both time periods, the proportion of those retiring at age 65 to 69 or 70 and over remained virtually unchanged (19% and about 7.5%, respectively).

Interestingly, the number of people retiring at age 50 to 54 declined over the two time periods, from 15% in 1995-1999 to 12% in 2000-2004.

Retirement age by industry

Below average retirement ages were recorded in utilities; transportation and warehousing; finance, insurance, real estate and leasing; educational services; health care and social assistance; information, culture and recreation; and public administration.

The greatest decline was found in other primary industries (forestry, fishing, hunting, mining, and oil and gas extraction), where the retirement age dropped from 62.6 years in the 1995-1999 period to 60.3 years in 2000-2004.

Notable declines also occurred in industries with higher than average retirement ages, such as accommodation and food industries and professional, scientific and technical industries.

Industries with early retirement ages were stable.

For more information, contact Henry Pold (613) 951-4608, Labour and Household Surveys Analysis Division.

See also
Timing of retirement THE DAILY – Perspectives on Labour and Income