Research summary - Factors associated with leaving the workforce in Canada

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Why this study

A number of issues surrounding retirement in Canada were explored. The issue of the connection between private pension income and retirement age remains a grey area. It is an important one, given the role of private savings in retirement income.

Canada's retirement income system is based on a three-pillar model:

• the first pillar is a universal pension called Old Age Security (OAS). This can be augmented by the Guaranteed Income Supplement (GIS) for low-income individuals aged 65 and over
• the second pillar consists of the Canada Pension Plan (CPP) and the Quebec Pension Plan (QPP), contributions being mandatory for workers, and
• the third pillar is private savings. These consist of pension plans offered by employers as well as personal retirement savings plans. They include registered retirement savings plans and tax-free savings accounts

What we did

Data from the 2019 Survey of Financial Security was used.

We conducted gender-based differentiated analyses. These provided the opportunity to explore the relationship between retirement age and the availability of financial resources based on the following events:

• having received an inheritance of at least $20,000 before age 50 or after age 49
• having a second property
• contributing to a private pension plan, and
• contributing to an individual registered retirement savings plan (RRSP)

We started by describing the population using frequency distributions. A multivariate analysis was then conducted to estimate the impact of financial resources on retirement age. The following socio-demographic characteristics were included in the analyses:

• marital status
• immigration status
• the presence of children in the home, and
• educational attainment

What we found

Our analyses found that:

• receiving an inheritance after age 49 is linked to earlier retirement for both women and men
• access to a private pension plan is the variable most strongly associated with earlier retirement, particularly among men
• contribution to an RRSP appears to be linked to later retirement
• people living with children under the age of 25 are more likely to stay in the workforce longer, and
• women are less likely to be able to retire if they have been through:
  • a separation
  • a divorce, or
  • the death of a spouse

This is not a significant factor for men.

What it means

Our findings are consistent with those of previous studies. They highlight the important role of private pension plans and family responsibilities in determining the age at which men and women retire.

Gender-differentiated analysis enabled us to highlight similarities and differences between people with comparable life and work experiences in these two groups. Although our findings show that the impact of several variables is similar for women and men, access to a private pension plan has a much larger impact among men. In addition, the fact of no longer being in a relationship significantly affects only women. This underscores the importance of implementing public policies that take into account a given population's different subgroups.

Contact us

Strategic and Service Policy Branch, Social Policy Directorate, Social Research Division

Email: esdc.nc.sspb.research-recherche.dgpss.cn.edsc@hrsdc-rhdcc.gc.ca