The 100-year life

The Beatles were playing clubs in Liverpool the year my father achieved the highest salary yet. It was a family accomplishment, so even little Garthy was informed. The old man would be raking in $10,000 a year as a high school principal. It might even mean the young woman living as a boarder in the downstairs parlour could be punted.

It was 1960.

In that year the average life expectancy for Canadian men was 68.4 years. Women made it to 74.2.

And the average retirement age?

For Canadian guys, that was 67 years. So, yes, the average man was in retirement for an average of about two years. Then, curtains. It’s also why pension plans could afford to be a little more generous. In those days 42% of all workers had a defined benefit plan (a known income for life). Today that number has dropped by half.

Those were the good old days that the Mills, Zees and Alphas now think were bucolic and halcyonid. Yes, you could get a house for less. But, yes, you’d die in it sooner. Is that a trade anyone would make?

The reality people face today is extreme by comparison. Life is financially challenged, but it’s long, growing longer, and Canadians suck at getting ready for it. Look at this week’s report from Manulife. Be ready for a 100-year lifespan, it says, with 40 of those years spent in retirement, without employment income. Worse, imagine a world where some unaging AI bot comes along to steal your job and retire you a lot earlier. What then? Would you be ready?

“With a typical working life lasting 35 to 40 years, many Canadians entering retirement today could spend an equally long stretch out of the labour force, and while many Canadians have aspirational plans about their retirement, they should also consider economics and health.”

As you might expect, this report (like most) is dark. Close to half of working Canadians are already retiring earlier than expected, it says, often due to illness, caregiving tasks or job loss. And when it comes to generational preparedness, it’s the Gen Xers who seem truly pooched.

Those folks, now aged 44 to 58, should be in their prime income-earning years, at the top of their careers, with adult children leaving the nest, substantial net worth and well-defined retirement plans. But, nah, not happening. Fully a third of people that age – within a decade or less of leaving work – have savings that average under $50,000.

Fifty grand? Enough to live on for a handful of months? And few people in Canada can survive on the public dole – CPP, OAS and the poverty-level GIS. What the heck are they thinking?

Well, says another report – this one from the CD Howe Institute gang – they’re not. It’s a slow sleepwalk towards the cliff. People are not preparing themselves for the new reality of many decades without a paycheque after they succumbed to the siren song of real estate, or are simply financially illiterate. Or both. And in a world where pension plans have vaporized or fundamentally changed, ignorance is no defence.

“Earlier generations of retirees fared well despite limited financial literacy thanks to simpler pension systems,” says the Institute. “But what used to be a relatively simple flight plan has turned into a far more complicated journey for today’s Canadians, who face a self-directed financial landscape.”

Most workers lucky enough to be in a workplace pension plan today have one that’s DC – defined contribution. The employer may match employee contributions with the money stuffed in crappy mutual funds, the eventual value of which depends on Mr. Market and the kind of funds chosen. Bad choices can bring bad results – when it’s too late to recover.

As for RRSPs and TFSAs, researchers Pierre-Carl Michaud and Bernard Morency suggest  we are basically clueless. “Many Canadians are effectively flipping a coin when choosing between a TFSA and an RRSP. While Canada benefits from strong first and second pillars of retirement income, the environment surrounding private savings has changed dramatically.

“Household net worth more than doubled from 1990 to 2024, yet access to private registered pension plans has fallen sharply. This shift highlights the growing risks of a system that places more responsibility on households, who often struggle to determine which savings vehicle best suits their needs.”

By the way, the average RRSP contains less than $115,000 – enough to generate about $7,000 a year in (taxable) income. As for people on the verge of retirement – between 55 and 64 – only 8% have at least $1 million in retirement savings. Because the vast majority of Canadians (seven in ten) have no private pension plan at all, you can see the scope of the problem.

So here we are. About 70% of Canadians will not have enough to live on after they stop working. And yet our homeownership rate is 68%. People in this country have bet bigly on real estate saving their butts later in life when they convert it into the funds needed for groceries and dog food.

But that’s a gamble. Just ask a house-rich, cash-starved retiree trying to flog their home in this sad market.

You know, like a Boomer.

About the picture: “While travelling the north coast of Taiwan, we were thrilled to see a Jack Russell terrier zooming past us on a skateboard,” write Heather and Fred from South Surrey. “He really seemed to be enjoying himself, as were we. Thanks for producing your thoughtful, informative, free daily blog to educate the masses.”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2025/11/21/the-100-year-life/