Jul 29, 2025
For many in Canada, the magic number for retirement is $1.54 million according to a BMO survey, and the standard retirement age in Canada is 65.
In other words, most people are trying to get into the seven-figure club by the time they reach their 60s. But you could be on track to retire earlier than that, perhaps with less money than you initially anticipated.
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Here are the top five signs that you’re on track to afford to retire earlier than you think.
No mortgage or consumer debt
Retiring or approaching retirement with a debt burden is surprisingly common. According to Statistics Canada, Canadians ages 55 to 64 have an average of $80,600 in debt.
As you can imagine, this isn’t a comfortable way to retire. You can’t enjoy your golden years in peace if you’re up at night thinking about interest rates and the global economy.
This is why paying off all your debt — including your mortgage — puts you in a better position than the majority of seniors and could allow you to retire sooner than you expect.
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Diversified streams of cash flow
Most retirement plans hinge on typical sources of income such as interest, dividends or pension benefits.
However, if you have a plan that incorporates more sources, perhaps rental income from properties or passive income from a side venture, your finances are much more robust than the average retiree.
If you’re trying to retire before you turn 65, finding new sources of passive income could be essential.
Relatively high savings rate
As of the first quarter of 2025, the average personal savings rate in Canada is 5.7%.If you and your family are saving more than that, it could be a green signal that you’re approaching retirement faster than most of your peers.
Firstly, a higher savings rate can get you to your goal quicker. For example, someone who only saves 4.5% of their $100,000 income and invests it in an asset that delivers 10% annual growth can reach $1.7 million within 46 years. If this person can double their savings rate to 9%, they can get to $1.7 million in less than 34 years.
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Not only does a higher-than-average savings rate help you achieve your goals faster, it also indicates a more stable retirement. It’s a sign that you have the willpower and discipline to live below your means and stick to a budget, which are essential skills for retirees on a fixed income.
Read more: The ultra-rich are bailing on volatile stocks right now — these 4 shockproof assets are their new safe havens
Empty nest with no financial assistance
Having dependents reshapes your financial situation and could be the deciding factor for whether or not you can retire. This is why many parents have to wait until their children are adults and have their own sources of income to consider retiring.
Unfortunately, the housing and cost-of-living crisis has pushed many adults to rely on their parents for support.
According to a TD survey from 2024, 57% of Canadian parents expect to financially support their children after they become adults.
If you’re part of the remaining 43% — with independent children or none at all — you’re in a better position to retire earlier.
Good health
Healthcare costs, especially ones not covered by the country's universal healthcare system, can make or break your retirement, especially once you are no longer eligible for employer-sponsored health insurance. A serious medical issue or the need long-term care can ultimately derail your financial plan.
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However, if you have managed to take better care of yourself, perhaps by quitting smoking, limiting alcohol or regularly exercising, you could qualify for lower health insurance premiums while also being less exposed to risk.
Simply put, good health is a key ingredient for a cheaper, earlier and more enjoyable retirement.
How you can meet your (early) retirement goals
If you’d like to avoid working right up to the afternoon of your funeral, there are ways you can maximize your nest egg to help you enjoy an earlier retirement. Here are some tips on how the dream of early retirement can be a reality.
- Adjust your plan: Your money plan might need changes as you get older or as life happens. Check it often and be ready to make small changes.
- Consistent and early saving: Save money regularly as soon as possible and wherever you can. Even small amounts can significantly grow over time. The more time your money has to grow, the better, thanks to something called “compound interest” — money earning money on money.
- Diversify investments: Rather than putting all your money in one type of investment, spread it out into different kinds of investments. This helps protect your money if one type doesn’t do well.
- Maximize tax-advantaged accounts: Use special savings accounts like RRSPs and TFSAs. These accounts help your money grow faster because you might pay less tax on it, letting you keep more of what you earn.
- Sustainable withdrawal plan: Figure out how much money you can take out of your savings each year once you retire so that your money lasts you longer.
- Understand your needs: Think about what you’ll need money for when you retire. What will your daily costs be? How much will fun activities or travel cost? Knowing these answers helps you set a realistic goal.
*With files from Melanie Huddart
Sources
1. BMO: BMO Retirement Survey: Over Three Quarters of Canadians Worry They Will Not Have Enough Retirement Savings Amid Inflation (Feb 12, 2025)
2. Statistics Canada: Assets and debts held by economic family type, by age group, Canada, provinces and selected census metropolitan areas, Survey of Financial Security
3. Statistics Canada: Current and capital accounts - Households, Canada, quarterly
4. TD Stories: Nearly 3 in 5 Canadian parents expect to financially support their children after they become adults, but most aren't confident in their ability to do so, new TD survey
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Vishesh Raisinghani is a financial journalist covering personal finance, investing and the global economy. He is the founder of Sharpe Ascension Inc., a content marketing agency focused on investment firms His work has appeared in Money.ca, Moneywise, Yahoo Finance!, Motley Fool, Seeking Alpha, Mergers & Acquisitions Magazine, National Post, Financial Post and Piggybank. He frequently covers subjects ranging from retirement planning and stock market strategy to private credit and real estate, blending data-driven insights with practical advice for individuals and families.
