The Retirement Crisis in Canada

Canada is facing a growing retirement crisis—and most people don’t even realize it. Here’s a stat that shocked me: Almost 4 out of every 10 Canadians nearing retirement have less than $5,000 saved. 

This isn’t just a personal finance issue—it’s a national trend that will affect millions of retirees.

In this blog post, I’ll break down why retirement has become so uncertain for so many Canadians. And at the end, I’ll show you what other top countries for retirees are doing—like Denmark and the Netherlands—and how you can learn from them to improve your own retirement plan.

What can be done about it? Financial planning can help. 

Retirement readiness gap

Canada is facing a significant retirement readiness gap, with many citizens unprepared for the financial demands of retirement. 

The numbers are pretty bleak. As mentioned earlier, According to the 2024 Canadian Retirement Survey by the Healthcare of Ontario Pension Plan (HOOPP), 39% of Canadians aged 55 to 64 have less than $5,000 in total savings. Even more worrying: 17% of people in that age group have no savings at all.

But it gets worse when you break it down by gender. Among women aged 55 to 64, a staggering 36% have no savings whatsoever, compared to 22% of men. In total, more than half of women in this age group have less than $5,000 saved.

That means a lot of people will be counting on CPP, OAS, and GIS to get by in retirement—and as I showed in a previous article: Key Pension Updates for 2025, that’s incredibly difficult to do.

CPP/OAS are like training wheels – They’re not designed to carry you the whole way—just to keep you from falling.

Deloitte Canada’s “Running out of time” report reveals that 55% of near-retiree households must make lifestyle compromises to avoid outliving their savings, and this figure could rise to 73% when accounting for unexpected expenses like healthcare and long-term care.

The financial strain is further highlighted by the Bank of Montreal’s 15th annual Retirement Survey, which found that 76% of Canadians worry they won’t have enough money for retirement due to rising prices. On average, Canadians believe they need $1.54 million to retire comfortably. While that number overshoots what many people actually need, it reflects the growing anxiety Canadians feel about maintaining their standard of living in retirement.

The Silent Crisis: Canada’s Middle-Class Squeeze

Canada’s retirement crisis isn’t just hitting low-income households, it’s hitting the middle class as well.

These are people who followed the rules: worked hard, bought homes, saved diligently. But retirement is no longer guaranteed. The system was built for a different era, with lower costs, shorter lives, and secure pensions.

Today, many retirees are house-rich but cash-poor. They face high living costs, uncertain investment returns, limited access to GIS, and potential OAS clawbacks. If long-term care is needed, they often have to drain their assets to qualify for support.

You can own a million-dollar home and still feel broke.

For single retirees, it’s even tougher.
No shared expenses. No second CPP. No tax-efficient income splitting. And no partner to lean on for care or emotional support. They face higher costs, fewer benefits, and more risk — alone.

These Canadians are too “wealthy” for help, yet too stretched to feel secure.
It’s not poverty driving the stress. It’s uncertainty.
And it’s reshaping retirement as we know it.

The “Unretirement” Trend 

The concept of “unretirement” is increasingly prevalent in Canada, driven largely by economic necessity rather than personal choice. A recent 2024 Fidelity survey found that over two in five (43%) Canadians plan to delay retirement due to financial concerns .Business WireHRD America

Statistics Canada reports that the average retirement age has increased from 60.9 years in 1998 to 65.3 years in 2023 . The labour force participation rate for individuals aged 65 and older reached a record high of 15% in 2023, more than double the rate in the mid-1990s . For those aged 55 and older, nearly 37% were active in the labour force in 2023, up from just 25% in 1998.

Some seniors keep working because they love what they do. But for many others, it’s not a choice — it’s a necessity. And that’s where things get complicated.

On a personal level, working later in life isn’t always easy. Health issues can get in the way, ageism is still very real, and learning new technologies can be overwhelming.

But there’s a bigger picture too. Older workers bring experience, help fill labour gaps, and contribute in meaningful ways. Still, their growing numbers raise an uncomfortable question: are our retirement systems really built for the world we live in today?

More and more, we need flexible work options and better policies that support aging Canadians — not just financially, but with dignity and respect.

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Why is this happening?

So, why are more Canadians working longer or heading back to work after retiring? Well, retirement is not what it used to be.  And for many Canadians, it starts with a major life shift that few saw coming.

Late-life divorce is becoming more common.
“Grey divorce” is on the rise, with more people over 50 choosing to separate. The financial impact can be massive. Assets get split, legal fees add up, and suddenly you’re supporting two households instead of one. Even if you had a solid retirement plan as a couple, it might not work on your own. Some people delay retirement, downsize their lifestyle, or rejoin the workforce just to make it work.

Retirement isn’t about quitting anymore.
More Canadians are easing into retirement, not jumping off a cliff. For some, it’s about freedom and flexibility, not sitting still. Consulting, part-time work, freelancing, or starting a dream project are all on the table. Work provides structure, identity, and connection. When those disappear, many retirees feel lost. Instead of walking away completely, they reshape work to better fit their lifestyle.

We are living longer than ever before.
That changes everything. And here’s something most people don’t realize: the older you are, the longer you’re expected to live. If you’ve made it to 65, you’ve already outlived many of life’s random risks. At 65, the average Canadian man is expected to live to 81.7, and the average woman to 85.8. At 70, those numbers rise to 83.2 and 86.9. At 75, men are projected to reach 85.2, and women 88.2. That’s not just a few extra years. That’s a whole new chapter to plan for.

Pensions are not as secure as they used to be.
Defined benefit pensions were once the gold standard. They offered a predictable monthly income for life, backed by employers. Today, most private sector workers have defined contribution plans instead. These depend on investment performance, which means more uncertainty and more responsibility. Only about 37.5 percent of Canadian workers even have a workplace pension. Most are left to figure things out using RRSPs, TFSAs, and personal savings.

Without strong savings and pensions, it’s like trying to build a house on sand. It’s much more likely to collapse. 

The cost of living is putting pressure on retirees.
Rising expenses are making retirement more expensive. Shelter costs were up over 6 percent as of early 2024. Mortgage interest jumped more than 26 percent. Food prices have climbed more than 20 percent since 2020. Out-of-pocket healthcare costs are another challenge, especially for dental, vision, and prescriptions. If you are living on CPP, OAS, and some savings, it can be hard to keep up.

🌍 What Can Canada Learn From Countries That Do Retirement Better?

Canada’s retirement system isn’t broken—but it’s falling behind.

We used to rank 12th globally in the Mercer CFA Global Pension Index. Now we’re down to 17th out of 48. That drop matters. It shows that other countries are modernizing their systems while Canadians are being asked to figure things out on their own.

So what are these top countries doing differently?

🇳🇱 Netherlands – Built-In Security

Workers in the Netherlands don’t have to think about it. They get a public pension like our OAS and are automatically enrolled in a workplace pension.
Result? Two dependable income streams by default.

In Canada, it’s hit or miss. Unless you work in government or a unionized role, you probably won’t get a pension. That leaves many Canadians relying on CPP, OAS, and their own savings—or nothing.

🇮🇸 Iceland – Simple and Strong

Iceland offers a basic public pension plus mandatory contributions to workplace plans. Everyone contributes, and the funds are strong.

Canada’s RRSPs and TFSAs are powerful, but they’re voluntary. To make them work, you need to plan, invest wisely, and stay disciplined for decades.

🇩🇰 Denmark – Clarity and Confidence

Denmark’s system is clean: a universal public pension plus required employer contributions to a national plan. Retirees know exactly what to expect.

In Canada, we have all the tools—CPP, OAS, RRSPs, TFSAs—but it’s a confusing patchwork. And unless you know how to navigate it, it’s easy to feel overwhelmed or fall behind.

🧠 What You Can Learn—and How to Use It

Here’s the lesson:
Countries like Denmark and the Netherlands don’t just hope people retire well. They build the structure for it.

In Canada, you have to be the structure. But you can do it—with the right strategy:

✅ Use your TFSA and RRSP like a DIY pension
✅ Automate contributions so it’s not guesswork
✅ Invest for long-term growth—not short-term safety
✅ Learn how to withdraw tax-efficiently in retirement
✅ Don’t just rely on CPP and OAS—they’re not enough on their own

If you don’t have a pension at work, you are your own pension manager. But with the right plan, you can still retire securely—just like retirees in top-ranked countries.

At Blueprint Financial, we believe retirement isn’t just about savings—it’s about security, dignity, and having real choices. We help Canadians build smarter, more practical retirement plans that work in the real world.

If this resonates with you, we’ve only scratched the surface.
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