A recent poll examining the attitudes and behaviours of 1,002 retired Canadians, age 55+ which included 746 retirees who are married or in a common-law relationship conducted in January 2010 by Angus Reid showed that 51% of Canadian retirees indicated that they had no idea, or only a vague idea, of what they wanted in their retirement.  The poll also indicated that 51% of those Canadian retirees that were married or in a common law relationship had the same / shared vision for their retirement as their partner.

This result should cause some pause for thought.  What retirement vision do you have and is it shared by your partner?

A recent article published in the Ottawa Citizen and Financial Post on Friday, January 29, 2010 entitled “Couples should have the same retirement ideas”, provides additional details regarding the poll and also identifies additional reading and support tools that couples can pursue.  Retirement planning should include establishing an understanding of what you would like to do together and also recognizing that your vision will evolve over time.  The article encourages couples to tackle the retirement vision discussion and not to avoid it.

Another interesting poll result was that 34% of retired couples say they are closer than ever because they can spend more time together but 19% say the hardest thing about adjusting to retired life is not being able to do all the things they use to do as a result of a reduced income.

A recent article published in the Ottawa Citizen on January 14, 2010 stated that Canada’s greying population could push federal finances into chronic deficit.  The article also indicates that the Parliamentary Budget Officer is asking the government to set targets now on how the government will climb back to balanced budgets in the 5 year time frame.

The newspaper article is based upon information from the Office of the Parliamentary Budget Officer (PBO) published in a document called “Estimating Potential GDP and the Government’s Structural Budget Balance” -published by the PBO on January 13, 2010.  Find the whole article at this web link – http://www2.parl.gc.ca/Sites/PBO-DPB/documents/Potential_CABB_EN.pdf 

For those that aren’t familiar with the PBO, it provides independent analysis to the Senate and the House of Commons on the state of Canada’s finances, government estimates and trends in the national economy.

The PBO report noted is one of many Technical Note’s from the PBO detailing the Officer’s approach to estimating Canada’s potential GDP, potential GDI, and the Governments structural budgetary balance.

Of interest to Boomers are the PBO’s points that the projected decline in potential GDP growth is a function of the projected decline in the growth of trend labour input, which reflects slower growth of the working age population and a decline in the trend employment rate associated with the shifting age composition of the workforce.  This reduction in potential GDP growth will constrain the pace of government revenue growth going forward.  What this is saying is basically this – Canada’s labour force is expected to shrink as Boomers retire and as a result, with a smaller proportion of Canada’s population working, Canada’s economic potential will fall to lower levels.  The newspaper article notes that these lower levels of economic potential haven’t been seen in 40 years.

In a nutshell, a reduced workforce means less revenue for the government which in turn means a larger “structural deficit” in the near future.  A structural deficit represents the difference between what the government takes in revenues and what it spends.  Based upon Canada’s aging population, more and more Canadians will move from the “those who pay taxes” category to the “those who use taxes” category.  As Boomers retire, they move from paying taxes to consuming government services, everything from Medicare to old age security.

We are all aware of Canada’s aging population statistics as noted in other articles posted in lifepast50.  As Boomers, we also should be concerned about Canada’s shrinking economic growth potential as a result of the aging Canadian population.  Will this mean greater taxes in the future, a reduction in government services, government program cuts, and/or continued budget deficits?  Should Boomers be considering continuing with working part time before completely and fully retiring from the workforce (a trend noted in a previous lifepast50 posts) given the recent economic downturn?  These are things Boomers need to keep an eye on in the next 5 years as Canada moves out of the latest economic downturn.