Are Canadians Delaying Retirement?

There’s no denying that the past few years have witnessed situations that none of us could have anticipated. Between a global pandemic and record-high inflation, it’s no wonder some Canadians are choosing to delay retirement.

Since the pandemic, numerous surveys have been conducted to gauge how comfortable Canadians feel about retiring. Over half of Canadians over 60 feel they need to keep working, according to a Labour Force Survey by Statistics Canada. Many workers have already delayed their retirement.¹

Almost one-fifth of working Canadians have delayed or are planning to delay their retirement, but what led to this decision? According to a 2022 survey, 62% of participants who have delayed or plan to delay their retirement do so because they don’t have enough savings or investments. Similarly, 71% of older Canadians are worried about running out of money in retirement.²

While running out of money in retirement has always been a stressor and one of the biggest obstacles to retirement planning, the issue is exacerbated in today’s economy due to record-high inflation rates and the increased cost of living. For example, $1 million in retirement savings won’t stretch as far as it used to. In fact, 54% of the participants surveyed say they are delaying their retirement because of rising inflation/costs of living this year.³

Every retirement will look a little different, but no one could have predicted the economic struggles we are facing now when they were planning their retirement 10–15 years ago. Still, there are some tactics you can remember as you prepare for retirement through these ups and downs.

Below are just a few:

• Have a diversified plan to help protect yourself against market fluctuations. Working with a financial advisor effectively aligns your portfolio with your risk tolerances and timeline.
  
  
• Set a budget and stick to it. Especially with such high inflation rates, it’s essential to watch your spending so you don’t take on high-interest credit card debt, especially right before you want to retire.
  
  
• Implement a phased retirement. The Center for Longevity and Retirement has a flexible retirement schedule that shares how this adjustment can help extend your working life while still enjoying retirement.

Some Canadians are choosing to delay their retirement, primarily due to the rising costs of living and not having enough retirement savings to last. Working through a detailed retirement plan can help you structure your retirement correctly and navigate these economic times.

^{1. CBC, June 8, 2023
2. hrreporter.com, June 17, 2022 
3. globenewswire.com, June 16, 2022}