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Does it make sense to retire when we’re still in a pandemic?


Governments have warned that COVID continues to pose a threat, especially for those over 60—an age when many Canadians at least start contemplating retirement. As a result, some older workers who commute to corporate jobs have been reassessing their life plans, pushing employers for more flexibility, if not an early retirement package.

Lockdowns and retirement: Not dissimilar

“COVID-19 has given many people a glimpse into what life may look and feel like as a retiree,” says Aaron Hector, a financial planner with Calgary-based Doherty Bryant Financial Strategists. He notes that, before the pandemic, workers who shuttled between home and office may have found it difficult to envision retirement. Furthermore, the forced simplified lifestyle that COVID has inflicted on near-retirees may have shown them that they could get by on a lower baseline budget than they previously thought possible. “Depending on the circumstances, the pressure to work later in life may have eased a bit,” he says.

Others have been pushed into retirement sooner than expected, says Matthew Ardrey, vice president of Toronto-based TriDelta Financial, who has several clients in this situation. “COVID-19 may have forced companies to take stock and streamline, but it also affected many people’s thinking of what is truly important to them,” he says. “I cannot help but wonder if that will lead to revaluing of time and what you ‘need’ when you retire. Even if you have not been forced into retirement, perhaps you should take stock of your life and see if you are financially independent.”

Can you afford to retire early?

When Ardrey makes retirement projections for clients, he discusses not just the changes to post-work income, but also to expenses. Commuting costs may plummet, and there’s no need for new office clothing. Also couples may discover they no longer need two vehicles. While some expenses, like travel, may rise, “the overall effect for most people is a decline in spending,” he says.

Depending on financial resources, some may decide the expedient thing is to leave the big city and its inflated expenses. Indeed, according to veteran Collingwood realtor Karen Willison, many of her clients fast-tracked their retirement plans early in the pandemic, which contributed to a surge of property sales in cottage country.

“Even before COVID, my wife and I were thinking about whether we’d stay in our Mississauga home for the transition years into retirement, or downsize and relocate out of the city,” says financial marketer Darin Diehl, who was laid off at the age of 60 before the pandemic hit. “COVID caused us to think about our options more thoroughly.” 

After personal health concerns led him to a reappraise of his retirement plans, Diehl says they have instead focused on some home improvement projects. “We are keeping our options open,” he says. “But generally, the concerns about my career ending sooner than planned and subsequent loss of some income remain.”

Full stop, phased or semi-retirement?

If you’re in a situation like Diehl’s, or simply view yourself as too young to retire in the classic sense of a full stop of work (particularly if you were counting on a few more high-income years to pad your nest egg), you could opt for semi- or phased retirement through self-employment or cobbling together several part-time jobs. 


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