Addendum: As I am about to retire from my government post, this older article seems a bit off, for me. It does fit for the next generation, will retirement still be a thing? I have been very lucky, but will those chances be available in the future?
When the baby boomers retire, will it cause the financial markets to crash? They might withdraw their money to live on.
That's a good question, but here is a better question, are we actually going to retire?
The Baby Boomers and the generation before it may well be the only two generations to retire. My Dad retired. Before that, most people died before they reached retirement age. (Two world wars do put a damper on planning for the future). All these baby boomers have all this money put away (or do they? we'll only know in a few more years) and think they will retire.
I am a little more pragmatic, will I retire? I have dreams of retiring now. I want to enjoy things while I can. Will I have enough money to retire at 65? Will CPP exist then? Will my pension from my employer still be solvent? (remember I wrote this while I still worked at Nortel) Will my debts be low enough that I can retire? Will I be doing something by then that I want to STOP doing? All very good questions to think about.
Will You Ever Retire?
Retirement—a phase traditionally seen as a well-earned reward after decades of work—is now more uncertain for many of us. With rising costs, shifting economic conditions, and a growing sense of financial dread, the question “Will I actually retire?” is no longer rhetorical—it’s real. The answer depends on a few key factors: the future of pensions, personal debt, and how prepared you are financially.
Canada Pension Plan (CPP): Sustainable—but for How Long?
The Canada Pension Plan (CPP) remains a cornerstone of retirement income in Canada. The 31st Actuarial Report from the Office of the Chief Actuary indicates CPP's sustainability. It is expected to last until at least 2090. Assets are expected to grow from $544 billion in 2021 to over $2.2 trillion by 2050, with investment income making up a significant share of future revenues.
But while these numbers seem promising, they rely heavily on assumptions: steady economic growth, stable employment, and healthy investment returns. For many, relying on CPP alone won't be enough—especially if retirement lasts 20–30 years or more.
Debt in Retirement: A Growing Concern
A troubling trend in Canadian retirement planning is the rising level of debt among seniors. A 2016 Statistics Canada report found that 42% of senior families were carrying debt—up significantly from 27% in 1999. Median debt among these families jumped from $9,000 to $25,000, with increases in both mortgage and consumer debt.
This suggests many Canadians are entering retirement still financially burdened. This situation either delays their ability to retire or reduces their financial flexibility during retirement.
Retirement Readiness: A Tale of Two Households
Not all Canadians are equally prepared for retirement. According to the 2023 Survey of Financial Security, the median net worth of families where the main income earner was aged 55–64 varied drastically:
- $1.4 million for those who owned a home and had a workplace pension.
- Just $11,900 for those who rented and had no employer pension plan.
That’s not a gap—it’s a chasm. Homeownership and employer pensions remain two of the strongest predictors of retirement success in Canada.
Planning Tools & Advice: Don’t Leave It to Chance
With so many uncertainties, personal financial planning is no longer optional—it’s essential. The Financial Consumer Agency of Canada (FCAC) offers many tools and resources. These help Canadians plan for retirement. They can also reduce debt and manage savings.
Collaborating with a financial advisor is crucial. Maxing out TFSAs and RRSPs is essential. Understanding how CPP and OAS fit into your overall income strategy is necessary. These are vital steps in building a stable retirement plan.
Final Thoughts: A New Kind of Retirement
Will you ever retire? It’s no longer a guarantee, but a goal you have to work towards. For many Canadians, retirement might not mean stopping work altogether. It could mean downsizing, shifting to part-time work, or semi-retiring. But with realistic planning and early action, it can still be a meaningful and secure phase of life.
Retirement is a concept that has only really been around for 75 years. Before that you simply got sick and died on the job, or plowing the fields. Will the Millenials ever retire? I doubt it, but they will live a lot longer too, which will make for an interesting financial equation.
Whether you retire or not, you want to have a choice. I will never retire or at least not in the traditional way. When I achieved financial independence, I went out and started businesses because I enjoyed what I was doing. When I “retire” again I expect to do a variety of things to keep me busy.
But are you sure your retirement is going to be as long as you hoped ? Will you be mobile and able to enjoy it? What happens when things start to break down ?
I guess I’ve always had a slightly skewed perspective based on my parents and my inlaw parents: I’ve always assumed that retirement was something that was DONE to you. Both Dads and two GrandDads were forcibly early retired. Basically your boss and HR walk into your office and say “You’ve got two choices: take this lousy early retirement package, or get fired.” What choice is that? My Mom and one GrandDad had “mandatory retirement.” For those young uns reading this, yes, the government used to force you to stop working at 65 whether you could afford it or not. (Unless of course you were a politician or a senator.)
What I learned from all of them is (a) save like the Dickens (b) be prepared to invent yourself a new career at any time. All but one of the ones forced out the door went on to continue working in totally different ways. (Pottery, fine woodworking, carpentry, investing, antique re-selling, etc. etc.) The good thing about these forced choices was they found a great deal of personal satisfaction in their later years and still do.
Will I be financially ready to retire when the time comes? Who knows. Do I know it could happen anytime whether I want it to or not? Yes. I already have some creative career possibilities in mind!