The Two Versions of Retiring at 68

Hello All,

When I was putting together last week's webinar, there was one stat that I came across that I found particularly interesting: the average retirement age for self-employed Canadians is 68 compared to 64 for the average Canadian worker.

My first reaction was to assume that self-employed Canadians were saving less for retirement. But, while this might be part of the picture, I think there is also another reason.

Self-employed people might find more gratification in their work than employees (who are often counting down the days to retirement). A lot of us genuinely don't want to stop working, even if we could.

But I did still want to highlight this number, since there's a version of retiring at 68 that's a choice and a version that isn't.

The part that's worth paying attention to

A more troublesome stat is that 53% of Canadians without a workplace pension plan have less than $5,000 saved for retirement.

This includes self-employed people, who don't have a workplace pension plan. Nor is there an employer matching your RRSP contributions. So whatever gets built, you build it yourself.

Which means for a lot of self-employed people, the business is the plan. Sell it one day, or just keep generating income from it as long as possible. And sometimes that works out. But it's a fragile strategy, because it assumes the business will either be sellable, or something you're able to run, indefinitely.

Working at 68 because you love what you do is great. Working at 68 because you don't have another option is less so.

The question worth asking

The goal of building wealth when you're self-employed isn't necessarily to retire early. For most people I know who are self-employed, early retirement isn't even the dream. The dream is to keep doing work they find meaningful, on their own terms, for as long as they want to.

But that dream requires the same thing early retirement does: enough built up outside the business that work becomes optional.

It's also worth saying that most self-employed people aren't avoiding this stuff because they're irresponsible. Another interesting stat that came up was that 20% of Canadians don't have a retirement plan because they don't know where to begin. And even if you want to start and you begin to seek out resources, the standard financial advice assumes a salaried employee profile. When that doesn't apply to you, it becomes even easier to put it off.

If you want to see where you actually stand

👉 Check out the Self-Employed Wealth Calculator

It only requires a few inputs and gives you a quick snapshot of your current wealth-building position, and how much you need to save to hit your target.

I'd love to hear from you: What are your specific challenges with saving money as a business owner? Reply and let me know.

Have a great weekend!

Ronika