Boomers are working longer — and it’s not only about money. Here’s what younger workers need to know

Retirement used to mean one thing: You stop working at a specific age, and then you kick back to enjoy your sunset years. But for a growing number of Canadian baby boomers, that script is being rewritten — and the reasons behind it are more complex than you might think.

Of course, money plays a role. Persistent inflation and rising costs can make even the strictest savers second-guess whether they’ve saved enough.

According to a 2025 BMO retirement survey, most Canadians believe they need about $1.54 million to comfortably retire (1). In contrast, the average Registered Retirement Savings Plan (RRSP) balance for those aged 55 to 64 is around $120,000 — a significant gap that’s pushing many baby boomers to keep working longer than they’d planned (2).

Additionally, a 2024 Manulife survey found that 64% of Canadian baby boomers expect to delay retirement to boost their savings (3).

But here’s what’s interesting: The financial picture doesn’t tell the whole story. A significant portion of boomers who are staying in the workforce aren’t doing it out of necessity — they’re doing it because they want to.

It turns out that purpose, identity and social connection matter just as much as a paycheque for many Canadians approaching retirement — and work provides all three.

Some boomers are choosing to stay in roles they find fulfilling, while others are using this stage of life to pivot into something new — a creative field, a passion project or an entirely different industry than the one where they spent decades. According to ADP Canada’s Happiness@Work Index, over 70% of boomers have ranked as the most joyful generation in the Canadian workforce for 13 consecutive months (4).

The social rewards of staying connected, contributing to something and feeling productive can be just as compelling as any financial incentive.

This trend is reflected in the data. According to Statistics Canada, the proportion of Canadians actively in the workforce who are aged 55 and over has nearly doubled — from 10.9% in 2001 to 22.4% in 2021 (5). And a 2025 estimate from RBC Economics projects that Canada will face its largest retirement wave yet as the remaining boomers hit 65 by 2030 — but many of them will keep working well past that milestone (6).

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Boomers choosing to stay in the workforce for longer doesn’t only affect personal finances — it has real implications for younger Canadians as well.

To start, Canada’s pension landscape is already shifting. With the Canada Pension Plan (CPP) and Old Age Security (OAS), the higher payment incentive increasingly favours delaying until 70 — CPP grows by 42% if you wait until then, while OAS increases by 36% (7) (8). As life expectancies rise and program sustainability comes under pressure from an aging population, there’s growing debate about whether future cohorts will face higher eligibility ages or adjusted benefits.

There’s also a labour market impact to consider. With boomers holding onto jobs longer and hiring practices remaining cautious, younger workers can find it harder to break into — or climb the ladder within — the workforce. The current environment of low hiring and low turnover means fewer opportunities for younger workers to move up, even as demand for skilled labour is expected to significantly tighten once the boomer retirement wave hits.

With all that in mind, the traditional “retire at 65” model may need to pivot — especially if you’re under 50. Working with a financial advisor to build a retirement vision that reflects your actual life can help you create a realistic plan, whether you see yourself stepping back in your 60s or working well into your 70s.

It can be difficult to picture what life at 65 looks like when you’re in your 30s or 40s. But planning for flexibility now — both financially and emotionally — could pay off later.

Data shows that working longer can improve both financial security, as well as physical and mental health outcomes (9). At the same time, not everyone reaches their late 60s in a position to continue working. Health, caregiving responsibilities and changing circumstances all factor in.

Here are a few things worth considering as you plan:

Your budget: Think about the life you want to live in retirement. A solid budget should account for the activities you want to pursue and your daily living costs while alsoo being realistic about what you can afford to contribute to your retirement savings in the present.
Debt going into retirement: If you’re carrying a mortgage or other debt you won’t have paid off by the time you want to retire, factor that in now. Retiring debt-free gives you more breathing room and less financial stress.
Health-care costs: CPP and OAS provide a baseline, but they’re rarely enough on their own — the maximum combined benefit is around $2,249 monthly at the time of writing. As you age, health-care expenses tend to climb, and if you plan to age in place, it’s worth factoring in potential costs for home care, accessibility renovations or support services.
Your sense of purpose: Many people retire without a clear plan for how to spend their time. The financial side of retirement is important, but so is having a vision for how you’ll stay active, connected, engaged and fulfilled. That planning matters just as much as the money.

Retirement isn’t the finish line it used to be — and for many Canadian boomers, that’s a deliberate choice rather than a compromise. Whether it’s financial necessity, a sense of purpose or simply loving what they do, more older Canadians are choosing to continue working, and reshaping what their sunset years will look like in the process.

For younger Canadians, the takeaway is clear: Don’t assume the retirement rules your parents followed will apply to you. CPP and OAS eligibility, housing costs, healthcare expenses and a continually shifting job market all mean that planning early — and for flexibility — is more important than ever.

Start by figuring out what you actually want retirement to look like. Then work backwards: What will it cost, what will you need to save and how much time you have to do so.

A fee-only financial advisor can help you stress-test the numbers and build a plan that holds up — whether you want to stop working at 60, or keep going well into your 70s. The goal isn’t just to afford retirement. It’s to actually enjoy it.

— with files from Melanie Huddart

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

BMO (1); Fidelity Canada (2); Manulife (3); Newswire (4); Statistics Canada (5); RBC (6); Government of Canada (7, 8); Alzheimer’s Association (9)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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