Jul 29, 2026
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Add us on GoogleThe plan was supposed to work in one direction. Boomers would spend their working years saving, then eventually pass wealth down to their kids. However, for a growing number of Canadian families, the money is actually moving in the opposite direction, especially when it comes to caregiving later in life.
And the numbers suggest this isn’t just a handful of unlucky families. It’s a structural problem with how an entire generation approached retirement.
Why so many boomers are short on cash
Nearly 3 out of 10 Canadians (29%) planning to retire in 2025 or 2026 expect to still be making mortgage payments after they leave the workforce, according to a survey of retirement-age Canadians conducted for real estate brokerage Royal LePage. A decade earlier, only about half as many senior households carried a mortgage.
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Mortgage balances among Canadians aged 55 to 64, the group closest to retirement, grew about 6% in the past year alone, as many homeowners tap home equity to cover bills or fund investments.
Add in non-mortgage debt, credit cards, car loans and lines of credit, and the picture gets tighter. The average Canadian carries $22,377 in non-mortgage debt, according to credit bureau Equifax Canada, and insolvency filings have climbed to levels not seen since 2009.
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Unfortunately, retirement income for many boomers doesn’t stretch far enough to absorb that debt. The average Canada Pension Plan (CPP) payment for new beneficiaries was $877.01 a month as of April 2026, and the maximum Old Age Security (OAS) payment for those between 65 and 74 was $751.97 a month, according to the Government of Canada. If you don’t receive any income from a workplace pension on top of these government pensions — and 52% of Canadian workers currently don’t — that leaves many with little cushion for a major home repair, a health scare or the rising cost of care.
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The bank of mom and dad, in reverse
For decades, money in Canadian families tended to flow from parent to child: down payments, tuition, the occasional bailout, also known as the “bank of mom and dad effect.”
Statistics Canada estimates 1.8 million Canadians, or 13% of unpaid caregivers, were part of the “sandwich generation” in 2022, supporting both children and an adult with a long-term condition or disability at the same time. Among this group, 86% said the responsibility hurt at least one part of their health or wellbeing, and 2 out of 3 said it affected their job.
The toll is real, and newer research suggests it’s getting worse, not better. The nonprofit Canadian Centre for Caregiving Excellence (CCCE) found that 49% of caregivers have experienced financial strain because of their duties, and 41% describe it as outright financial hardship. One in 5 respondents spends at least $12,000 a year of their own money on care-related costs, and 22% have had to stop saving altogether.
“If I did the math of taking care of three people at home, I saved the healthcare system at least $60,000 a year over more than a decade,” Pamela, a Nova Scotia caregiver who left her career at 49 to care for her parents and, later, her husband, told the CCCE. “We say we want people to age at home, and that’s fine. But how are we going to do that without supporting the caregiver?”
Bhavini Patel, a Greater Toronto Area caregiver who left a director-level hospitality career to care for her father, describes a similar trade-off: years out of the workforce that cost her income, pension contributions and long-term economic security, on top of the emotional weight of the role itself. Caregivers who reduce their hours or step away from their careers often pay for it twice, first in lost income, then in a smaller CPP payment later on, since fewer years of contributions mean a lower lifetime benefit.
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What long-term care actually costs
For families weighing whether a parent can remain at home or seek more support, the cost can be a shock. Private assisted living runs anywhere from about $1,800 a month in Manitoba to $6,500 a month or more in British Columbia, depending on the province and the level of care required.
Faced with those costs, some adult children move a parent in with them, cover part of a rent cheque, or simply stop saving for their own retirement to keep them afloat. A survey of Canadian sandwich-generation caregivers by HomeEquity Bank and Ipsos found that 70% are worried about the economic burden of supporting both parents and kids at once, and 71% said they would need professional planning advice to manage it all.
If you’re the one covering the gap
There’s no single fix for a shortfall this widespread, but a few concrete steps can ease the pressure for Canadian families navigating it right now.
- Get the real numbers first: compare your monthly spending since a parent started relying on you against the same months a year ago. This allows any conversation about financial hardship to start with facts, not guesses.
- Check the Canada Caregiver Credit: for the 2025 tax year, eligible Canadians can claim up to $8,601 for an infirm dependant aged 18 or older, including a parent, through the Canada Revenue Agency (CRA).
- Have the household budget conversation early: many parents receiving CPP and OAS can contribute a modest amount toward groceries, utilities or rent once the numbers are on the table.
- Set up powers of attorney before a crisis forces the issue: without a valid power of attorney, a family member seeking to manage a parent’s finances or care decisions may have to apply to the courts, a process the Government of Canada notes is both slow and costly.
- Protect your own RRSP and TFSA contributions where possible: pausing your own retirement savings to cover a parent’s shortfall can quietly recreate the same gap for your own retirement one day.
- Loop in a fee-only financial planner: if the situation is ongoing rather than a one-time expense, a professional can help create a plan that accounts for both generations. This tends to hold up better than an ad hoc arrangement.
None of this erases the underlying problem: a generation of Canadians reaching retirement with more debt and thinner pensions than the one before it. But a clearer picture of the numbers, and of what support is actually available, gives families a real starting point instead of a running tally of unspoken resentment.
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Laura Boast is an Associate Editor with Moneywise.com and a lifelong content creator who has reached international audiences at Discovery, CBC, Blue Ant Media, Bond Brand Loyalty and more.
