The average Canadian household is worth more than $1 million, but many families are making costly money mistakes. Here’s how to protect your wealth

It also marks the 11th consecutive quarter (3) that household net worth increased in Canada.

While much of the quarterly growth comes from financial assets such as investments, real estate is arguably the financial backbone of many Canadian households, making up more than 40% (4) of total assets on average.

Despite the current slowdown (5) in real estate markets, home values have soared in major cities, and even mid-sized markets, over the past decade. As a result, many homeowners became net-worth millionaires without trying — they simply stayed in place (6).

But there’s a catch.

A seven-figure net worth doesn’t automatically mean you’re financially set for retirement. And as you get nearer to retirement, you might not even feel all that wealthy — because in practical terms, you may not be.

Here’s why a high net worth doesn’t guarantee your financial security in retirement.

The ‘hidden millionaire’ phenomenon

When it comes to funding their retirement, Canadians agree that they need a lot for their golden years. In fact, the 2026 BMO Annual Retirement Survey found that the average Canadian believes they’ll need $1.7 million (7) to retire comfortably.

That’s already a lofty goal, but if your net worth includes a home valued around $900,000 and only $100,000 in savings, you could very well be short of what you need in order to finance a long retirement — and that’s before the impact of other factors, like inflation.

This problem is more common than you think. There’s even a name for it. Financial publications have started using the term “hidden millionaire (8)” to describe people who built most of their wealth through home equity and retirement savings, but don’t think of themselves as investors or high-net-worth individuals.

They didn’t pick the right stocks or build an investment portfolio. They paid their mortgage, contributed to their Registered Retirement Savings Plan (RRSP) and watched their home value appreciate.

Now, they’re sitting on a million dollars — and have no idea what to do with it.

Why hidden millionaires may be putting themselves at risk

If you’ve crossed the seven-figure threshold without consciously managing your wealth, there’s a chance your money isn’t working as hard as it could for you, or it’s slowly eroding. There are a few things you might want to consider.

Lifestyle creep is a slow leak: The biggest threat to any millionaire’s wealth isn’t a market crash — it’s gradually spending more as your income rises. Retirement savings that look impressive today can shrink faster than expected if your spending isn’t kept in check. The principle of living below your means doesn’t disappear once you hit a million dollars. If anything, it arguably becomes more important.

For instance, there are also some expenses that might seem like fixed costs, but there’s actually more ‘wiggle room’ than you might think. One of these expenses is car insurance, which has soared in recent years. In fact, premiums climbed 18.9% (9) in the five years between October 2020 and October 2025.

If you were auto-renewing your policy during those years, you might have overpayed without realizing it. However, by using a comparison platform like Rates.ca, you could get 20+ quotes from top-rated auto insurance providers and save more than $500 in as little as three minutes.

Here’s how it works: Just answer a few basic questions, and Rates.ca will show you the most affordable deals in your area. That’s it. Not only is the process 100% free, but you could also save as much as 20% by bundling your auto and home insurance together.

Concentrated wealth is a vulnerability: Many hidden millionaires have most of their net worth tied up in one or two places — typically a home and a single employer’s pension or stock plan. That concentration can create risk. If property values in your area decline, or if a company’s shares drop sharply, a large portion of your wealth can evaporate.

As a matter of fact, a study (10) published in 2025 found that broad diversification across asset classes reduces risk and improves returns compared to putting everything all in one place, even through major market shocks.

Cash sitting idle is money left behind: A common mistake when rolling over or transferring registered accounts is failing to reinvest funds. After all, money that sits as cash inside a Tax-Free Savings Account (TFSA) or Registered Retirement Income Fund (RRIF) isn’t growing. Putting investments into those accounts could yield significantly better returns.

However, many Canadians, especially the younger ones, haven’t heard the news. A 2025 survey (11) by TD Bank found that about 4 in 10 Gen Z and millennial Canadians keep most of their TFSA balances as cash — missing out on tax-free compounding, which is the account’s primary advantage.

A simple way to take advantage of it would be through investing in broad-based exchange-traded funds (ETFs), which are investment securities that hold multiple assets, including stocks, bonds and commodities, and traded on stock exchanges like individual stocks. The beauty of investing in ETFs is that they can represent different sectors of the market, rather than just a single stock, giving you diversification.

Better yet, you can start investing with CIBC Investor’s Edge, where you can trade ETFs and stocks, explore bonds and options, and more. You can even get unlimited commission-free trades on over 200 select ETFs and, for a limited time, commission-free fractional trading. Terms and conditions apply.

Finally, to kickstart your investing journey, you get 100 free trades when you use promo code EDGE2627. Plus, get $150 or more cash back.† Conditions apply. Offer ends March 31, 2027.

How hidden millionaires can make their wealth last

The good news is that none of these scenarios need you to start over from scratch. A few intentional shifts in how you manage your money can make a significant difference over the long run.

Get professional guidance: One of the most consistent habits among wealthy Canadians is working with a qualified professional. A financial advisor or certified financial planner can help you assess your readiness for retirement, identify gaps and build a strategy that fits your specific situation. If you want to search for one, FP Canada keeps a national directory (12) of certified planners.

Some working Canadians may also qualify for profession-specific banking perks that can give them access to a financial advisor while reducing everyday banking costs.

For example, National Bank offers specialized banking packages for professionals in fields like healthcare, engineering, IT, finance, law, teaching, public service, administration, architecture, agriculture and more. Depending on eligibility, the offer can include the following:

• Up to three bank accounts with no fixed monthly fees, with an eligible Mastercard rewards credit card (certain fees apply)
• Personal and home equity lines of credit with preferred terms and conditions
• Preferred value-added services like legal assistance and identity theft protection
• Access to a financial advisor
• An eligible Mastercard rewards credit card (certain fees apply)

According to National Bank, eligible professionals can unlock up to approximately $1,313 in annual savings with higher savings available for select professions such as healthcare and IT.

The special offer covers more than 150 professions, including a wide range of professionals and specialists — and eligible individuals can enjoy even more savings when you combine specific banking products and services. Find out if you work in an eligible profession and explore your options.

Diversify beyond your home: Home equity is wealth — but it’s concentrated into a single, illiquid asset. Consider working with an advisor to convert some of that equity into a diversified portfolio inside your TFSA, RRSP or other non-registered account. Broad-based ETFs, bonds and other assets classes can help spread risk and generate income in retirement.

If you’re looking for ways to access that home equity using a reverse mortgage, online brokers like Homewise can help you find your best rate in minutes. Homewise does the shopping for you, giving you access to rates from 30+ lenders with one simple application.

Plus, it’s easy to get started: All you have to do is provide a few details, and Homewise will connect you with nearby providers to get you started. Even better, there’s no credit check required, so you can start finding the best mortgage for you right away.