Retirement should be a time to relax, but for many Canadians, it’s becoming a growing financial crisis.
Retiree incomes are falling, inflation is rising, and many are left wondering: Will I have enough to get by?
In this blog post, we’ll break down the real numbers behind retiree income in Canada and whether a comfortable retirement is still possible.
- The Reality of Retiree Income in Canada
The average retiree income in Canada is lower than you might expect.
For Canadians aged 65 and older, the median after-tax income as of 2022:
- Couples: $74,200 per year ($6,183 per month)
- Single seniors: $30,820 per year ($2,568 per month)
For context, the median income across all age groups in Canada is $95,700 for couples and $33,360 for single individuals. This means many retirees are living on significantly less than the working population.
So, can you actually retire comfortably on this? With rising costs—especially for housing, food, and healthcare—how far does that income really go? That’s what we’re going to explore.
- The Alarming Decline of Retiree Income Amid Surging Inflation
Retirement income isn’t just stagnating, it’s actively losing purchasing power. Between 2020 and 2022:
- Senior couples saw their median after-tax income drop from $76,860 to $74,200, a 1.4% decline.
- Single retirees experienced a decrease from $32,720 to $30,820, a 1.2% decline.
At the same time, inflation surged by about 10%, increasing the cost of essential goods like groceries, gas, and housing.
Even if retiree incomes appear stable, inflation acts like a silent tax, chipping away at financial security.
Inflation = A Leaky Bucket – Imagine having a bucket of water with a hole in the bottom. No matter how much you pour in, it keeps leaking out. That’s what inflation does to your retirement savings—it erodes your purchasing power over time.
Why is this happening?
Several key factors are working against retirees:
- Weaker pensions – Fewer employers offer guaranteed pensions, shifting financial risk onto retirees.
- Savings shortfalls – Wages haven’t kept up with inflation, making it harder to accumulate enough for retirement.
- Years of low interest rates – Bonds and savings accounts, once reliable income sources, offered minimal returns, forcing retirees to take on more risk or withdraw more than planned.
- Longer retirements – Canadians are living longer, meaning their savings need to last for decades.
Why Smart Planning Matters
Retirement isn’t just about saving—it’s about protecting what you’ve worked so hard for. Proper planning helps retirees navigate these challenges, ensuring they don’t outlive their savings.
- Where Do You Fall? Comparing Retiree Incomes
Not all retirees are in the same financial situation. Some are living comfortably, while others are struggling to make ends meet. So where do you fall?
If you’re a senior couple, earning above $74,200 per year means you’re in the top 50% of retiree households. If you’re earning less than that, you’re in the lower half.
For single seniors, earning above $30,820 per year puts you in the upper half, while earning below that places you in the lower 50%.
But here’s the challenge—single retirees face a much tougher financial situation than couples. Even though they need less overall, their costs don’t scale down nearly as much as you might think.
- Housing costs: Whether you’re single or part of a couple, rent or home maintenance costs are often the same.
- Food and utilities: While a couple can share grocery expenses and split bills, a single retiree is covering everything on their own.
- Healthcare expenses: Certain medical and insurance costs are fixed, no matter your household size.
This is why financial planning for retirement is so critical. If you’re a single retiree, you’ll need to be even more strategic to stretch your income.
Pro tip: Budget in Phases – Most retirees spend more in their first 10-15 years—travelling, hobbies, home renovations—so structure your retirement plan to account for this ‘active’ phase.
Before going to our next section, if you want to save more on taxes in retirement, check out our free guide with 5 proven strategies to keep more of your money.
📩 Grab your free copy—link is here:
https://blueprintfinancial.ca/retirement-tax-saving-guide
SECTION 4: Why Many Seniors Keep Working (5:30 – 7:30)
Retirement doesn’t always mean leaving work completely. In fact, a surprising number of seniors continue working well into their later years.
In 2022, over 1.9 million Canadians aged 65 and older reported employment income, contributing to a combined $58.8 billion in earnings.
Why are so many seniors still working?
- Financial necessity: Some retirees simply don’t have enough savings to cover all their expenses.
- Inflation pressure: Rising costs make it harder to rely solely on pensions and savings.
- Personal fulfillment: Many retirees enjoy staying active in the workforce, whether it’s through part-time jobs, consulting, or even starting small businesses.
However, while continuing to work can be a great way to supplement income, it’s not the only strategy. With smart planning, many retirees can create a sustainable financial future without relying on employment.
SECTION 5: Retirement Planning Session with Simon Wong
See the video above, it goes over a retirement planning session with Simon Wong.
This walkthrough was a condensed version of a process that typically spans multiple meetings—evaluating finances, understanding goals, and crafting a personalized strategy. Even in this short session, I hope you saw how a well-structured plan reduces uncertainty, provides options, and helps retirees feel more secure about their future.
However, this example assumes the person has assets to work with. If you’re relying solely on the average income with no assets or homeownership, financial planning becomes even more crucial. The earlier you start, the more control you’ll have over your financial future, making it easier to build security over time.
Retirement is a critical phase of life, and it’s too important to leave to chance. If you want to secure a solid financial future, Blueprint Financial is here to help. Our expert team will work with you to craft a personalized financial plan that ensures you don’t just survive, but thrive in retirement.
To stay ahead of the game and receive expert tips and strategies, be sure to join our free financial newsletter. It’s a great way to stay informed and make empowered decisions for your financial future.
If you’re ready to take the next step in securing your financial future, explore our financial planning services—we’re here to guide you every step of the way!
