Thinking about Retirement? Keep Active Retirement in Mind
By C. Naseer Ahmad
Washington, DC
The thought of retirement conjures up images of enjoyment in the later phases of life but it also brings forward fears if the social safety net seems to wither away by the competing demands on the national, state and local budgets not to mention the peddling of ideas, by politicians and special interest groups, that prove to be too good to be true. Equally frightening is the situation when not enough has been provisioned in the nest egg by individuals for the needs of tomorrows.
Type in the word “retirement” in any search engine and you will find ideas, though a number of which might be sales pitches, to achieve a whole bunch of goals. But there are real places in Canada, US and other places around the world where retirement is the culmination of many dreams.
Victoria, British Columbia was ranked in 2017 as the Number 1 place to retire in Canada by Money Sense citing key statistics like 3.3 doctor per a thousand people and average property tax of 0.82%. Sarasota, Florida (Number 1) and Washington, DC (Number 10) were ranked among the top 10 places in the US to retire by the US News and World Report in October 2017. However, “If you’re thinking of spending your golden years abroad, Switzerland might be the right choice for you,” according to InsiderMoneky. Ranking at the top the blog lists Canton of Appenzell Ausserrhoden, which lies at Switzerland’s northeast. Its combination of great health care, low crime rates and cheap cost of living grant it the first place on our list of best places to retire in Switzerland.
Professional service providers across the US, Canada and elsewhere are likely to have testimonials that they are trying their best to live up to the promises made to retirees. However, that is just one side of the equation.
As Shana Freeman wrote in the Top 10 tips to Adjusting to Retirement, “Not everybody retires by choice. Sometimes people are forced to do so due to illness or physical problems that prevent them from continuing in their careers, or financial considerations such as layoffs. Sometimes these forced or early retirements result in a big financial burden.” A bigger nest egg of financial resources will obviously help alleviate the financial burden in later years, whether the retirement is by choice or forced by unexpected circumstances.
Writing for Investopdia, Arthur Pinkasovitch, explained “What's the Difference Between Retiring In Canada And America.” Pinkasovitch’s article compares the Canadian Registered Retirement Savings Plans (RRSP) with the US Traditional IRA plans. He also compares the after tax plans in the two countries - Canada's Tax-Free Savings Account (TFSA) which is fairly similar to Roth IRAs available in the US. In his comprehensive article, Pinkasovitch also compares Canada’s Old Age Security vs. Social Security in the US. While it is easy to get lost in the weeds of different plans, Pinkasovitch’s overview is a useful guide in understanding the offerings and the limitations in the plans of both countries.
Across the Atlantic Ocean, European Union (EU) countries which hitherto provided cradle-to-grave care are facing their own challenges even though they might offer a bit more generous plans.
There is recognition of the challenges ahead by governments across North America and in Europe. For instance, on its website the German Federal of Labor and Social Affairs states: “Demographic developments in Germany are raising enormous challenges for the country's pension system. Fewer children are being born. At the same time, the life expectancy of pensioners is on the rise. As a result, a declining number of workers will have to finance a growing number of pensioners in the future through their pension insurance contributions. Statutory pension insurance is and will continue to be a fundamental component in retirement provisions. It ensures that insured individuals will also be able to enjoy financial security in their old age.”
Recognition of the increases in life expectancies as well as the declining number of supporting workers to fund the social safety nets is felt broadly across EU as well as in North America. New York Times columnist David Leonhardt, in his April 22, 2018 opinion piece, asserted that this is a “Time for Big Economic Ideas.” Various ideas explored in his article are relevant to the retiring population as well as those who will shoulder the burden in the future.
“Incentives for an active retirement,” is a very informative publication from the Swiss Government which asks the important question, “Who is likely to be interested and what are the challenges?” which must be “viewed from the perspective of the employees, the employees and the national economy as a whole.” Addressing the employees, the paper states that “there is a need for action especially among the less well qualified. This group in particular will face the biggest problems in the coming years, as they will have to make do with just their pensions and savings.” The paper also calls for investment in education for those who aspire to realize their dreams via “active retirement,” because it can help boost the income potential.
With active retirement, instead of someone planning your day, you could choose to enjoy Rooh Afza on the porch, counting the apples on the tree in the front yard, go downtown to listen to Fareed Ayaz and Abu Muhammad Qawwal, take a trip to Interlaken in Switzerland to watch people parachuting in the park or simply take a continuing education class at one of local universities.
Discussing the idea of active retirement, which will perhaps require changes in the legal framework as well, Swiss Ambassador Martin Dahinden said: “Education will help solve many problems” that retirees might face. Ambassador Dahinden’s words do carry some weight on this issue as he is Board Member, World Demographic and Ageing Forum. Sometimes being graceful, people say “age before beauty.” But, by heeding Ambassador Dahinden’s advice, prospective active retirees can find a lot of beauty with age in these changing times.
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