Retirement at 65 has long stood as a milestone in the minds of Canadian workers — a finish line after decades of hard work, and the gateway to relaxation, travel, and spending time with grandkids. But that horizon is shifting. More Canadians than ever are working into their late 60s, 70s, and beyond, adjusting not just their financial plans but their expectations of what later life looks like.
This change isn’t merely about passion projects or second careers. For many, it’s wrapped in an economic reality marked by rising living costs, extended life expectancy, and insufficient retirement savings. While the idea of retiring at 65 is still alive, its practical viability is under serious challenge. And the implications stretch far beyond individual households — they could shift government policy, affect intergenerational wealth, and reshape Canada’s workforce for years to come.
Why more Canadians are delaying retirement
| Factor | Impact on Retirement |
|---|---|
| Longer Life Expectancy | Need for increased savings and income |
| Inflation & Cost of Living | Retirees facing unexpected expenses |
| Insufficient Pension Coverage | More reliance on continued work |
| Shifting Economic Landscape | Changing job market and gig work options |
| High Housing Costs | Equity-rich, cash-poor homeowners continuing work |
What changed in recent years
In earlier generations, long-term employment often came with robust pension plans and predictable retirement timelines. But in today’s gig economy and freelance-driven environment, fewer Canadians have access to defined-benefit pension plans. Instead, individual responsibility for investing in RRSPs or TFSAs has become the norm—an approach that depends more heavily on personal financial literacy, market performance, and career stability over decades.
Compounding that is the rising cost of essentials. Canadians are paying more for groceries, healthcare, housing, and utilities. Inflation has outpaced many retirees’ fixed incomes, forcing some to return to work post-retirement or simply delay it altogether. Health improvements mean older adults are more capable of continuing work, but many would rather not, if financial conditions were more favourable.
The impact on Canadian workforce dynamics
The influx of older Canadians choosing to remain in the workforce affects employment demographics and workplace dynamics in profound ways. Employers are increasingly having to accommodate a multi-generational workforce, balancing technology-forward younger employees with experienced, but possibly less tech-savvy, older workers.
There are benefits to this shift. Skilled older workers offer institutional knowledge, mentorship potential, and reliability. On the flip side, concerns arise around succession planning, wage growth, and job availability for younger workers entering the employment market. The Canadian economy is also adjusting: with Boomers not exiting the workforce at anticipated speeds, the domino effect extends to housing availability, business succession, and national productivity.
Winners and losers from the retirement age shift
| Group | Impact |
|---|---|
| Older Canadians with strong skills | Benefitting from demand, flexible opportunities |
| Younger job seekers | Facing competition and fewer advancement opportunities |
| Employers adapting to multi-gen staff | Win from experience, challenged by training costs |
| Pension-dependent retirees | Struggling with fixed incomes amid inflation |
| Gig economy platforms | Winning with influx of older workers seeking part-time income |
Who chooses to delay retirement and why
Delayed retirement is not distributed evenly across the population. Canadians who are financially insecure, self-employed, or who started earning serious income later in life are more likely to push retirement beyond 65. Likewise, recent immigrants and those without access to employer pensions tend to work longer, relying on employment income as a buffer against economic volatility.
Gender also plays a role. Women, who often leave the workforce for caregiving, may retire later to compensate for gaps in contribution. Meanwhile, some professionals — such as consultants, educators, or healthcare specialists — remain engaged into old age by choice, driven by passion or purpose as much as financial incentives.
Policy implications for provinces and federal government
This national trend is poised to put strain on the infrastructure of Canadian retirement policy. Programs like the Canada Pension Plan (CPP) and Old Age Security (OAS) were designed with assumptions that few people would collect benefits beyond 20 years. As people live and work longer, critics argue that these systems may need recalibration.
There’s growing chatter around increasing contribution windows, shifting eligibility ages, and bolstering retirement literacy programs in schools and workplaces. Governments may also consider incentives for employers who hire or retain older workers, as well as tax breaks for phased retirements or part-time transitions.
“The legislation has not kept pace with demographic shifts. We’re living longer, but the system still thinks we’re done at 65.”
— Dr. Elisa Fontaine, Demographic Policy Expert
How to make retirement more financially realistic
Those nearing retirement age may need to rethink their approach to ensure long-term stability. Financial advisors often suggest people revise expectations of when they’ll stop working — and what ‘retirement’ actually means. Rather than a full exit, more are pursuing phased retirement strategies, where part-time work sustains income and engagement.
Maximizing CPP and OAS benefits, delaying withdrawals, downsizing housing, and budgeting for rising healthcare costs have all become central to new retirement planning. Many Canadians are also increasingly turning to financial advisors to find a sustainable balance between lifestyle, savings, and longevity projections.
“We counsel clients to think not about retirement age, but about retirement readiness. That’s a more accurate and helpful target.”
— Rachel Komarov, Certified Retirement Planner
The psychological shift toward working longer
Beyond economic necessity, there’s a behavioral and societal transformation underway. Many Canadians no longer associate age 65 with ‘the end’ of productivity. Working longer is becoming normalized — sometimes even celebrated. For some, continuing to work provides structure, social interaction, and a sense of purpose that can boost mental health and cognitive longevity.
But that doesn’t mean it’s equally welcomed by all. Fatigue, burnout, or lack of choice can take a toll. The challenge for policymakers, communities, and employers is ensuring that working longer feels like an option—not an obligation—for older Canadians.
“There’s dignity in choice. But for too many, continuing to work isn’t a real choice — it’s the only way to pay bills.”
— Harold Menon, Retired Steelworker & Advocate
Preparing younger generations for a new retirement reality
One undeniable outcome of delayed retirement is how it reshapes expectations for younger Canadians. Millennials and Gen Z are already skeptical about traditional retirement pathways. For them, the concept is less tied to a fixed age and more to financial freedom and flexibility. They are investing earlier, demanding workplace pensions, and treating financial independence as retirement’s new definition.
Educational programs emphasizing saving early, understanding compound interest, and managing debt may help future generations retire — even if much later or differently than their parents did. In essence, retirement is no longer a date on the calendar, but a financial condition one reaches when ready.
Frequently asked questions
What is the current average retirement age in Canada?
The average retirement age in Canada has risen to around 64.6, according to recent government data — and continues to climb.
Is working past 65 financially beneficial in Canada?
Yes. Delaying retirement can increase your Canada Pension Plan (CPP) and Old Age Security (OAS) payouts and reduce financial strain in late life.
Do most Canadians still have pensions?
No. A growing number of Canadians rely on RRSPs, TFSAs, or employer-matched contribution plans instead of traditional defined-benefit pensions.
Can I access CPP and still work in Canada?
Yes. You can start receiving CPP at age 60 and continue to work, although this could impact tax obligations and future benefits if not deferred.
Is it unhealthy to work into your 70s?
Not necessarily. Research shows that continued engagement in meaningful work can promote mental and cognitive health, though physical limitations must be considered.
How can I tell if I’m ready to retire?
Assess your financial readiness, physical health, and emotional preparedness. Consult a certified financial planner to model different retirement scenarios.
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