Labour force participation: retirement transitions, expectations and planning

Canada faces major retirement-related challenges. With increasing life expectancy and lower than expected returns on savings, there is a need to assess the retirement planning and preparation of Canadians. Additionally, with the aging population, there are concerns of ensuring a sustainable labour supply for the Canadian economy. The proposed study has a twofold purpose: 1) to analyze the expectations of Canadians about retirement and the adequacy of their preparations; and 2) to compare the characteristics of retirees who return to the labour market with those who do not return. A better understanding of Canadian’ expectations of retirement will support policies aimed at nudging Canadians to better prepare for retirement. Additionally, identifying Canadians who are more likely to return to the labour force after retirement will contribute to focus policy initiatives on retaining older workers in the labour force.

This project examined the demographics and motivations of retirees who return to work using the nationally representative dataset, the Canadian Longitudinal Study on Aging (CLSA). Accessing data from 9,695 respondents who retired between 1991 and 2014 and were aged 50 or older during this time, the sample was representative of 5.2 million Canadians. As such, we found that a quarter of Canadians returned to work after retirement. The most commonly reported reasons for return to work were the desire to return to work and liking of work, with finances ranking third most frequent.