Canadians are retiring earlier—but many aren’t financially ready for a 40-year retirement
Canadian retirees are leaving the workforce sooner than planned, with nearly half stepping away early—often for reasons beyond their control—according to Manulife’s 2025 Financial Resilience and Longevity Report.
As Canadians face the prospect of living well into their 90s or beyond, the industry is struggling with how to help workers prepare for retirements that now routinely stretch four decades.
Aimee DeCamillo, global head of retirement and wealth at Manulife Wealth & Asset Management, said, “Longevity is rewriting the rules of retirement, and as it increases, we’re seeing more plan members questioning whether their saving and investment strategies will sustain them throughout retirement."
Early exits, lasting impact
The report found that 46% of retirees left the workforce earlier than planned, most commonly due to personal health or caregiving needs. Only 15% retired because they felt financially prepared.
“Canadians can and should be excited by the prospect of longer lives with more time in retirement, allowing them to spend more quality time with their families and communities,” Brett Marchand, head of Canada retirement at Manulife, said.
“Our latest findings give us a clear view of where individuals and plan sponsors need the most support.”
Early retirees are feeling the pinch. Sixty-two percent of those who retired ahead of schedule reported making lifestyle adjustments to cut costs, compared to 43% of those who retired as planned or later.
Generational gaps and persistent stress
While Baby Boomers and Gen Xers prioritize retirement savings, Gen Z is more focused on immediate expenses and homeownership. For many young Canadians, the dream of homeownership has become a source of mounting anxiety rather than optimism, according to a TD survey.
Millennials (40%), now the largest workforce cohort, are further behind on retirement savings than Gen Z (48%) and are least likely to rate their financial situation highly.
Across all generations, inflation and the cost of living remain top concerns. Canada’s annual inflation rate eased to 2.2% in October, according to Statistics Canada, as falling gasoline and slower-rising grocery prices helped cool consumer costs.
Make sure to get all the latest news to your inbox on Canada’s mortgage and housing markets by signing up for our free daily newsletter here.
