Freedom

One of the most memorable retirement campaigns of the late 80’s was Freedom 55.  Today, a handful of entrepreneurs, savers extraordinaire or those on the receiving end of a large inheritance might manage it.  However, for the vast majority this has been out-of-reach for some time.
Why?  Contributing factors include longevity, the evolving workforce, the cost of living and inflation.
With a more health conscious grey population, leaps in medical care diagnosis, treatment and medication we have a much longer life expectancy.  The dramatic decline in the smoking population may be the biggest single factor.
Observation #1.  It’s one thing to retire at 55 when life expectancy was early 70’s.  An entirely different matter when it is 90 and beyond.
Statistically, those with higher education earn more money.  Higher education via university is 4 years to a degree.  In many cases, this degree is now the pre-requisite to taking even more education to be able to emerge with the skills required to enter the workforce.  Tuition and living expenses have risen.
Observation #2.  Less years in the workforce before 55 and a longer time required to retire student loans.
The average Canadian used to pay about 25% of their take home pay towards shelter.  Today, that number has risen substantially.   Factor in a host of appliances, furniture and electronics that are designed to be replaced every 3-5 years.
Observation #3.   Most, have less money to save after shelter and household expenses.
Government administered programs like CPP and OAS have evolved to make them slightly less attractive to take earlier and slightly more attractive at a later date.  They are indexed to inflation but one needn’t a career in financial planning to figure out that costs for hydro, cable, insurance and taxes are rising faster.
Observation #4.   If you don’t have capital to grow in retirement you are at the mercy of inflation risk.
There are other factors.  Wages losing pace with inflation, yesterday’s wants are now today’s needs, the costs of raising a family and declining savings rates.  Once the complaining ends we still have to “put on our work boots.”
Freedom 55 still exists and as a brand, is iconic in its’ identity.   We all need targets to strive for whether they are 55, 60 or what was once considered the “normal” retirement age of 65.
As London Life, creator of Freedom 55 now asks, “what does your freedom look like?”