Nearly a third of Canada’s retired pensioners have returned to work a new study has found, with many retirees claiming that they have misjudged the costs of retirement.
ING Direct carried out two online surveys interviewing around 1,000 Canadians apiece.
As well as the disconnect many retired Canadians had expressed between the predicated cost of retirement and the actual costs needed for the ‘golden years,’ one of the studies found that 31% had returned to work full time.
One study also found that 33% of the respondents stated they hadn’t saved enough money for retirement, and 31% blamed higher-than-expected living costs.
ING Direct stated that respondents named three main issues they wished they had addressed:
- found more ways to save for their ‘golden years’
- began saving earlier
- didn’t spend so much money “mindlessly.”
“[This] reality of retirement for many Canadians is a sobering reminder,” noted Peter Aceto, ING Direct’s CEO.
“You can’t put your financial future on the back burner.”
“Among the many other financial priorities we face during our prime working years,” he continued, “we need to make sure that retirement planning doesn’t get overlooked.”
As reported by the Bureau of Labor Statistics, the trend is also felt a little further south, with the workforce participation rate in America for those classed as “seniors” increasing from 4.3% in 1990 to 7.5% in 2011.
How to do it
Whether you wish to maintain a desired standard of living, or help out members of family or friends, if you are considering returning to work you need to first ensure you have all financial considerations covered.
Firstly, could your aspirations be achieved by simply spending less? You may find that a simple task such as swapping which supermarket you use – and bigger changes like downsizing your home – can bring about the desired standard of living.
Downsizing your house is a particularly good way of reducing your monthly spend, with some experts predicting you could save up to 25% in heating, water and electricity bills.
If, after covering all the possible saving options you still believe returning to work will be the best option for you, you should crunch the numbers.
Costs you will have to account for include food, work clothes, and transportation – and potentially even childcare.
Your new income will also be subject to taxes, and, depending on which country you live in, may be taken in culmination with any income you already receive and alter your total tax burden.
At this stage, it is advisable to enlist the help of a regulated, independent financial advisor (IFA).
An IFA can crunch the numbers for you, offer assistance with any implications of your new wage, and outline the gross income you could expect to receive.
They may also be able to point out any benefits or ways to alter your total income you had not previously considered.