Once again this week, I have been forcefully reminded that early “retirement” is not a choice for many Canadians. It’s something that happens to them, not something they select. Basically, your boss walks into your office one morning and says, “Sorry but we don’t want you any more. You can take this ‘bridging’ package and retire early. Or you can be fired. Your choice.”

That’s more or less what’s happening to up to 45 employees of RBC.

For those who have been busy trying to cling on to the storm-swept rock that is their own job, here’s what’s happened.

The Royal Bank of Canada has chosen to outsource and offshore some jobs. That’s not particularly surprising although it’s always unpleasant. The brouhaha has developed because of how they handled the transition.

RBC hired a company, iGATE Corp., to do the work in future in India. However, that company has brought the new workers to Canada to be trained by the current Canadian RBC staff. In fact, they may be here being “trained” for as long as two years, according to some news stories, although it appears 3 months is more likely, according to other reports.

The RBC staff have been told they are welcome to apply for any internal vacancies, but unless they find a job by the end of April, they will be out of work. (That was according to an early CBC news report.) Most of the affected staff, according to the CBC report, are in their fifties or older and are very gloomy about their prospects of finding a job if they are pushed out the door.

Forced Early Retirement Can be a Financial Disaster

Many workers in their early fifties are just paying off their mortgage. In fact, a study released this week by CIBC says most Canadians expect to be 57 before they pay off the mortgage. These workers are often counting on paying off their home and then using the extra cash flow to boost their pension and possibly help their children with education expenses. Usually the last 10-15 years of your working life are when you finally start to be able to accumulate cash, money that will be very welcome if not essential during retirement.

Being forced out at, say 55, can be devastating. It’s very unlikely an older worker will walk out one door and straight in another. Months or even years of lost salary loom. And anecdotally most older workers I’ve seen end up working in a different lower-paying field for the rest of their career. Many end up starting small businesses which, while they can be emotionally rewarding, are rarely as financially beneficial as employment income at the top of a salary grid with dental and health benefits.

Don’t Be Complacent: Save Early and Save Lots

If a company decides to layoff and restructure, or outsource or offshore, there’s little an older worker can do to stop them. The best I can suggest is that people try to keep their skills current and flexible. If you’ve been working 20 years in one company, do you even have a résumé? It may be worth taking a bit of time to draft one. If you see weaknesses (Does your company still use Win95? What professional organizations do you belong to? Did you somehow shift around within the company without ever getting hands-on managerial experience?) try to address them within your current job or through a continuing education course or two.

For those just starting your careers, don’t think you’ll have lots of time to save for retirement later. Build an emergency fund first, then start socking away money against the unforeseen. Or at the very least, continually invest in yourself by upgrading your skills and adding to your education either through formal courses or informal mentoring. Perhaps plan on how a hobby could become a career if needs must.

Related Reading

• Why I Won’t Bother With Granite Countertops
• Retirement Planning: Don’t Invest Your Pension Primarily in Stock in This
• Retirement Roundup or Why I Won’t be Free at 55 Unless It’s for Lunch on Friday
• RBC chief denies use of foreign worker replacements
• Ottawa admits it approved request for foreign workers to replace RBC employees
• RBC defends plan to replace 45 Canadians, outsource their jobs
• McMaster student leads online charge against RBC hiring practice

Join In
Have you or a friend been forced into early retirement? What advice do you have for the rest of us? Please share your experiences with a comment.