Retiring at 65 is a Dying Dream: Is 70 the New Normal?

1. The “Dream vs. Reality” Hook

Retire at 65?
That worked when houses were $80K and most people didn’t live past the age of 75.

But today? You could live 30+ years in retirement — and without the right plan, you might run out of money.

At Blueprint, we’re seeing more and more Canadians working past 65 — and the data backs it up. In this blog post, I’ll show you why that’s happening.

And at the end, I’ll break down a scenario of someone retiring at 65 using our planning software — so you can see what actually works, what falls short, and how small changes can make a big difference.

📈 2. Canadians Are Retiring Later

Let’s zoom out and look at the big picture. Back in the late ’90s, Canadians were retiring earlier than ever. In 1997, the average retirement age dipped to just 60.9 years old. But something started to shift. By 2010, it had crept back up to 62.5. By 2020, it reached 64.3. And now in 2024, the average retirement age has climbed to 65.3 — the highest it’s been in nearly half a century. That’s a full four-year jump in just one generation.

And it’s not just the average age going up — the median retirement age is now over 65 too. That means more than half of retirees leaving the workforce after 65, not before.

But here’s where it gets even more interesting. Over 1 in 5 Canadians are working past the age of 65.  In 2022, 21% of Canadians aged 65 to 74 were still employed. But not all for the same reasons. About 12% said they were working by choice — to stay active, connected, and fulfilled. Another 9% were working out of financial necessity. 

So not only are we retiring later — we’re also rethinking what retirement even looks like.

And if you break it down by the type of worker, the picture gets even clearer. Public sector employees still tend to retire a bit earlier — around age 63. Private sector workers? They’re holding out until about 65 and a half. But self-employed Canadians are pushing it the furthest, retiring on average at nearly 69 years old.

Which brings us to the real question: Why is this happening? Let’s get into the 6 biggest reasons more Canadians are working longer and retiring later.

We’re Living Longer Than in the Past 

Let’s talk about something that’s changing retirement as we know it:

We’re living longer than ever.

And here’s the thing — life expectancy doesn’t stay fixed. The older you get, the longer you’re expected to live. It’s a bit counterintuitive, but let me explain. If you’ve made it to 65, you’ve already outlived a bunch of life’s random risks — like getting hit by a scooter in your twenties or trying to impress your friends with a backflip after two beers.

So what does that actually look like?

Let’s break it down by age:

At 40, the average Canadian man can expect to live to 78, and women to 83.

At 50, men are projected to live to 79, and women to 84.

At 60, men are looking at about 80.5, and women 85.

At 65, men are expected to live to 81.7, and women 85.8.

At 70, men reach 83.2, and women 86.9.

At 75, men are still projected to hit 85.2, and women 88.2.

So if you’re healthy and make it to 65, odds are you’ve got two more decades ahead of you. That’s not just a long vacation — it’s a whole new chapter.

Retirement isn’t a 10-year plan anymore — it’s a 20 to 30-year lifestyle.
That means more years to fund, more health to manage, and more time to figure out what the heck you actually want to do with your life when work isn’t the centre of it anymore.

And that’s just one reason retirement is changing.
Let’s look at the others.

Pension coverage has changed.

For a long time, many Canadians could count on a defined benefit pension. That meant a predictable income for life, backed by your employer. Simple. Secure.

But that kind of pension? It’s becoming less common — especially in the private sector.

As of 2022, about 68% of pension plan members were still in defined benefit plans, according to Statistics Canada. That sounds decent — but it’s mostly thanks to public sector jobs like government, healthcare, and education.

If you’re in the private sector, you’re more likely to have a defined contribution plan, where the retirement income depends on how the investments perform. There’s no guaranteed monthly payout. You take on more risk — and more responsibility.

And here’s the bigger picture: only 37.5% of all paid workers in Canada are even covered by a workplace pension. That means the majority of Canadians are on the hook to figure it out on their own — through RRSPs, TFSAs, or other savings.

So while pension coverage is still strong in some sectors, for most people, retirement has become more DIY than it used to be.

Rising cost of living.

Retiring on a fixed income used to be doable. Not anymore.

Today’s retirees are facing surging costs — with no matching boost in income.

Let’s break it down.

Shelter costs are exploding.

As of Feb 2024, shelter costs are up 6.2% year-over-year.
Mortgage interest rates alone have jumped over 26%.
Renters are getting squeezed. Homeowners renewing are shocked by rate hikes.

Groceries aren’t helping.

Food prices have jumped 20%+ since 2020, and they’re still rising.
On a fixed income, every grocery run cuts a little deeper.

Healthcare is a silent budget killer.

Public healthcare doesn’t cover everything.
Dental, glasses, physio, and prescriptions often come out-of-pocket — and those costs rise with age.

The bottom line?

If you’re living off CPP, OAS, and savings, it’s getting harder to make ends meet — especially if you’re still renting, carrying debt, or helping family.

Rising costs are tough enough — but taxes can quietly take a big bite too.

If you want to keep more of your money in retirement, grab our free guide with 5 proven tax-saving strategies.

📩 Grab your free copy—link is here:
https://blueprintfinancial.ca/retirement-tax-saving-guide

Work Has Gotten Less Physical

It used to be that by 65, your body told you it was time to retire. You worked a job that was physically demanding — construction, manufacturing, transportation. After four decades of hard labour, retirement felt like a well-earned rest.

But now? More Canadians are working in knowledge-based or service jobs. You’re sitting at a desk, taking calls, working on a computer — maybe even working from home. If your job isn’t hard on your body, and you’re still mentally sharp, why stop?

And it’s not just about capability — it’s about choice. Many people in their late 60s still feel energized by their work. It gives them a reason to get up in the morning, keeps their brain active, and offers financial rewards with fewer physical costs. If you like what you do and you’re still good at it — why not keep going?

Changing Views on Retirement

There’s a generational mindset shift happening around retirement.

For Boomers and Gen Xers, retirement isn’t always about escape or slowing down — it’s about freedom. And freedom doesn’t have to mean never working again. It could mean consulting part-time, teaching a course, picking up freelance gigs, or finally starting that dream business.

In fact, for a lot of people, retirement has become less of a cliff and more of a ramp. Instead of a hard stop at 65, it’s a slow transition into something more flexible and personally fulfilling.

The emotional side matters too. Work gives us structure, identity, and social connection — all things that people tend to miss after they retire. And many retirees find that endless free time isn’t all it’s cracked up to be. So rather than quitting work entirely, they reshape it to better fit their lifestyle.

Divorce and Late-Life Breakups

“Grey divorce” is quietly reshaping retirement timelines — and not in a good way.

The number of Canadians over 50 getting divorced has been rising for years. And when couples separate late in life, it often causes a major financial reset. The house might need to be sold, assets split, legal fees paid, and now you’re looking at supporting two households instead of one.

Even if you had a solid retirement plan as a couple, it may not be enough on your own.

And let’s not forget: starting over later in life often comes with new expenses — maybe even a new mortgage or rent, and fewer years to rebuild. That’s why many people going through late-life breakups delay retirement, downsize their lifestyle, or re-enter the workforce just to stay afloat.

Uncertainty Is the Real Retirement Killer

Even if you’ve saved enough on paper, uncertainty can still make you hesitate.

Markets are volatile.
Housing costs are unpredictable.
Inflation — while better than last year — is still higher than most retirees planned for.

Add in rising healthcare costs, geopolitical tension, and the general anxiety of “what’s coming next?”
And it’s no surprise that many Canadians are delaying retirement — not because they need to, but because they don’t feel safe.

They’re not waiting for a magic number.
They’re waiting for peace of mind.

And let’s be real — the idea of living on a fixed income feels riskier than it used to.
When you’re relying on CPP, OAS, and your savings, one bad surprise — a market dip, a medical emergency, or a rent hike — can throw your entire plan off course.

So what do people do?
They work a few more years.
Delay tapping into their savings.
Build a bigger buffer — not out of necessity, but for the comfort of knowing they’re covered.

But here’s the tradeoff:
Time is your most valuable asset in retirement — and it gets more valuable the less you have.
That’s why I’m a big believer in retiring as early as you safely can.
To buy back your time. To enjoy more healthy years. To live, not just survive.

🎬 Scenario Walkthrough: Can He Retire at 65?

Let’s walk through a retirement scenario — using my financial planning software to show how small tweaks can make a huge difference.

Meet our retiree: Keanu 

🧓 Keanu is 65, single, and wants to see when he can retire, he thinks it will be around age 70.

• His goal? A modest lifestyle, spending $50,000 per year.
  
• He made $90,000 annually before retiring.
  
• He has $400,000 in his RRSP and $100,000 in his TFSA.
  
• His home is paid off, but has no corporate pension.
  
• CPP and OAS are assumed at standard eligibility, starting at 65 unless otherwise noted.
  

❌ Screenshot 1: Retire at 65? He’s Out of Money at 83

If Keanu retires cold turkey this year at 65, starts collecting CPP and OAS right away, and lives off his savings — he runs out of money by age 83.

His RRSP gets depleted fast, and his TFSA can’t cover the rest. By his mid-80s, he’s dipping into negative net worth — and that’s assuming no big surprises in health or inflation.

Lesson: $500K in savings sounds like a lot… but over 25+ years of retirement? It might not be enough without a plan.

🛠️ Screenshot 2: Work 3 More Years — Now We’re Getting There

Okay, let’s tweak the scenario.

Keanu works three more years, earning $90K a year and continuing to save. He still takes CPP and OAS at 65.

Now? His money lasts through age 90, and he finishes with a net estate of over $400K.

It’s a big improvement. Just 3 extra years of work buys him over a decade of financial breathing room in retirement.

But what if he doesn’t want to work that long?

🤔 Screenshot 3: What If He Works Just 2 Years… But Delays CPP to 70?

This version: Keanu only works two more years, but instead of starting CPP at 65, he waits until 70, locking in a much higher monthly benefit.

Sounds clever, right?

But… we still get a shortfall. He’s dipping into his RRSP aggressively between 67 and 69 to fill the gap, and it drains too fast. He’s got less left in his later years, even though his CPP is stronger.

Lesson: Delaying CPP is powerful, but without a smart withdrawal strategy, it can backfire.

🧠 Screenshot 4: The Sweet Spot — Smart RRSP Draws While Waiting for CPP

Now let’s try something strategic.

Keanu still retires at 67 and delays CPP to 70… but this time, he draws gradually from his RRSP between ages 67 and 69, just enough to cover his needs while keeping taxes low.

Now we’re in business.

He ends up with:

• Steady income through retirement
  
• Lower lifetime tax bill
  
• A sizable estate remaining — over $500K by age 90
  

💡 This combo — working 2 years, delaying CPP, and drawing smartly from RRSPs — gets him the balance he needs.

🧮 Final Takeaway

This is a super simplified version of what real retirement planning here at Blueprint looks like.

In reality, there are a lot more moving parts — taxes, OAS clawback, drawdown strategies, inflation, health costs, estate planning, and more. But even this simple example shows how powerful the right sequence can be.

Keanu didn’t have to double his savings or work until 70. Just by tweaking a few levers — like timing CPP, drawing down smartly, and working a bit longer — he built a plan that actually works.

At Blueprint Financial, we help you figure out when you can retire, how much you can spend, and how to make the most of what you’ve saved. Whether you’re planning a few years out or already in retirement, our goal is to help you find your version of the retirement sweet spot.

👉 Explore our financial planning services to see how we can support your goals and unlock more financial freedom.

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