New BMO survey showed rising prices forcing tradeoffs between housing costs and retirement security
Inflation has already been squeezing Canadian households. Now it appeared to be rewriting how many of them thought about retirement and increasingly, their mortgages.
The latest BMO Retirement Survey found that nearly three quarters of Canadians said rising prices increased their worries about having enough saved for retirement, while about two thirds said inflation already affected their ability to save and invest for their later years.
The online survey of 1,500 adults, conducted by Pollara Strategic Insights between November 4 and 10, 2025, carried a margin of error of plus or minus 2.5 percentage points, 19 times out of 20.
Inflation squeeze reaches retirement math
For those who said inflation hurt their finances, almost half reported spending an extra $100 to $300 a month on necessities, while roughly one third said their monthly costs have risen by more than $300. That strain is feeding directly into retirement planning: 31% are contributing less to retirement savings, 27% are cutting back on spending to keep contributions steady, and 17% postponed saving altogether.
Previously, RBC’s latest Financial Flexibility Poll revealed that everyday expenses remained the dominant barrier, with 79% of Canadians citing rising day‑to‑day costs as their biggest obstacle to achieving financial goals, ahead of housing costs (66%), debt (51%) and their own financial habits (51%).
“Inflation is a threat to retirement savings, but it doesn’t have to derail our clients’ plans,” Brent Joyce, chief investment strategist at BMO Private Wealth, said.
“The key is to stay invested and take a proactive approach... With disciplined investing and expert guidance, clients can ensure their money grows faster than inflation and supports the lifestyle they’ve envisioned.”
Canada’s headline inflation rate edged down to 2.3% in January. Statistics Canada said the annual pace of consumer price growth slipped from 2.4% in December as gasoline prices fell sharply and earlier base effects worked through the data.
When asked how long their savings would last in retirement, 30% of respondents said they simply did not know. Among those who ventured a guess, 22% expected their nest egg to last 10 to 19 years, while only 13% believed it would stretch beyond 30 years.
“Comprehensive financial and wealth planning is essential to providing clarity - especially when navigating complex and ever changing variables like inflation,” Paul Lalonde, head of wealth planning at BMO Private Wealth Canada, said.
“By modelling a range of possible futures and tailoring strategies to each client’s circumstances, we help transform uncertainty into confidence. In the end, thoughtful planning provides the peace of mind Canadians need as they look ahead to retirement.”
Mortgage debt follows Canadians into retirement
The BMO survey came as more Canadians carried mortgage debt into retirement. A Royal LePage poll in 2025 found that nearly 29% of Canadians planning to retire in 2025 or 2026 were expected to keep making mortgage payments after leaving the workforce. Just a decade earlier, only about half as many senior households had mortgage debt, underscoring how later entry into homeownership and rising prices reshaped the retirement landscape.
HOOPP–Abacus Canadian Retirement Survey highlighted that 44% of homeowners planned to rely on selling their homes to fund retirement, while one third expected to remortgage for additional funds, and 65% of unretired homeowners worried they would not have their mortgages paid off in time. Those findings pointed to a growing role for home equity strategies, including reverse mortgages, downsizing and refinancing, in late-stage financial planning.
Retirement abroad and broker opportunities
BMO’s poll also suggested that geography has become part of the retirement strategy. Fifteen percent of Canadians planned to retire outside the country, with a majority of those expecting lower living costs abroad and roughly one third anticipating significantly lower expenses.
Ontarians were the most likely to imagine spending their retirement in another country, while Quebec residents were the least likely, according to the survey.
For brokers and lenders, retirement risk, housing debt and inflation are no longer separate conversations. As more clients arrive at renewal still carrying large balances and uncertain timelines, the advisory opportunity lies in tying mortgage decisions to long-range retirement planning – not just the next five-year term.
Tracy Valko, founder and CVO at Valko Financial, recommended 'right-sizing.'
“They’ve got too much debt. Could they manage it? Potentially, but I think they’re exhausted from having debt and managing it every day that they have to sell – and don’t want to sell,” she told Canadian Mortgage Professional. “I call it right-sizing to what your financial position is right now instead of downsizing.
“It’s a mindset for people who are already stressed: ‘Let’s talk about right-sizing to where you’re at right now with your income. Let’s alleviate all this debt by paying it off when you sell your home and then start again with a minimum downpayment – just a smaller home.’”
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