Canadians are working past retirement, but not because they want to

At the age of 70, James Kadri is still putting in the work at his local grocery store in Calgary. He’s worked there for 35 years, and relies on it and two other part-time jobs to make ends meet.

“If it wasn’t for the night job, I’d be broke or bankrupt, you know, and then where would I be,” Kadri told The Cost of Living.

“It’s been bad because, yes, inflation, there’s a lot of price hikes and everything, you know. So I’m careful how I spend my money.”

More than half of Canadians still in the workforce past the age of 60 are there by necessity, not choice, according to a Labour Force Survey from Statistics Canada in 2022. It cited essential expenses and pension ineligibility as the primary reasons people continued working.

And a report from February found fewer people had retired in the past year, compared to the year before, among people aged 55 to 64.

Kadri says he is certainly working out of necessity. He had a line of credit which has been changed into a mortgage that he is working to pay off, along with a mortgage on his home.

He says those payments cost him $1,000 every two weeks. He says he gets about $1,200 a month from a combination of Old Age Security and the Canada Pension Plan. But it’s not enough for him to get by without having a job, or three, as the grocery store doesn’t provide stable, full-time hours.

“There’s little left for the bills and little left for the food,” said Kadri.

Bill VanGorder has heard stories like Kadri’s before, and is even working past retirement himself. Since VanGorder retired at the age of 63, he has worked four full-time jobs at various times and is now the chief operating officer with the Canadian Association of Retired Persons.

“More and more people are having to go back to work because they just need the money. They don’t have the income they need. People don’t have the retirement savings. They don’t have the pension plans,” said VanGorder.

More debt is pushing retirement

VanGorder says many people he has talked to would like to retire, or at least cut back on work, but are struggling to keep up with the increasing cost of living.

“They don’t have the government support that they used to have,” said VanGorder.

“Inflation has gone up much quicker than the increases in government support that’s there, especially for low-income older Canadians.”

Since early 2021, Canadians have seen a sharp rise in inflation. And while that has cooled off slightly, the inflation rate went up again last month.

Giovanni Gallipoli says it’s not just inflation. He is an economist at the University of British Columbia who studies labour markets and retirement, and he says that people are also carrying more debt into their later years.

According to Statistics Canada, over the last couple of decades, the number of seniors carrying mortgage debt nearly doubled.

“Older people used to be debt free by retirement back in the ’80s, early ’90s, and that’s no longer the case. And this is partly due to the fact that it’s so much easier to borrow now. You have a lot more access to credit than you did before,” said Gallipoli.

He also says lifestyles have changed. People are taking longer to get their education, meaning they enter the workforce later. And people are living longer.

This isn’t just expected to affect seniors.

A recent online survey by the Angus Reid Group on behalf of H&R Block, among a nationally representative sample of Canadians who are members of the Angus Reid Forum, found many younger Canadians don’t expect to fully retire, and plan on having a side gig once they do to keep up with the cost of living.

“It would be lovely to have a life of leisure and to have retirement, everybody enjoying 25 years of retirement. But it’s expensive, and that means the money has to last for longer,” said Gallipoli.

Taking a look at government help

VanGorder says CARP has been pushing for government to take a fresh look at the financial support it offers retired Canadians, and to remove the requirement for people to cash in their Registered Retirement Income Funds at a certain age.

“Governments are not understanding the real needs of older Canadians. In today’s financial situation, where cost of living is going up and income is not,” said VanGorder.

In response to a request from CBC, a spokesperson from the Office of Canada’s Minister of Seniors said government has been making changes to support seniors facing these economic challenges.

Most recently, government enhanced its Guaranteed Income Supplement earnings exemption to assist low-income seniors who work.

Meanwhile, Kadri doesn’t know when he will be able to retire. He says he can’t live on $2,000 a month, which is how much he’d get from the government if he dropped his three jobs.

“It’s not very easy to retire on that. You know, like once you pay anything, there’s not much left,” said Kadri. “$2,000 doesn’t cover half of that. There’s nothing to save, not much to eat. So it’s just, I don’t know.”

Kadri likes keeping busy, and takes a lot of joy out of helping customers. But it’s the two mortgages he has to pay that keep him going back to work.

“I’d like to just be not responsible for having to get up and go anywhere or do anything. I could go and have a coffee or go for a jog.”