More Canadians are working longer — and rethinking how they'll fund retirement

Record numbers of older Canadians are staying in the workforce, with many approaching retirement saying they don’t feel financially prepared. And fewer than half of non-retired Canadians now have access to an employer-sponsored pension. As a result, retirement is becoming less about replacing a paycheque with a pension and more about piecing together a liveable income from a variety of sources.

Canadians are working longer than ever

One of the clearest signs of this shift comes from Statistics Canada’s latest analysis of older workers, which found that nearly 1.2 million Canadians aged 65 and older were participating in the labour force in 2025, pushing the participation rate for seniors to 15.2% — the highest since comparable records began in 1976.

Retirement is becoming more flexible, too. Statistics Canada found that 1 in 10 Canadians aged 55 and older who had retired had since returned to work, with financial considerations among the reasons for making the transition back into employment.

Rather than marking a clear finish line, retirement is increasingly becoming a gradual transition that blends part-time work, consulting or seasonal employment with traditional retirement income.

For many Canadians, that shift isn’t just about staying active — it’s also about financial necessity.

Financial confidence hasn’t kept pace

While retirement expectations are evolving, many Canadians aren’t convinced their finances are keeping up.

According to the 2026 Canadian Retirement Survey from the Healthcare of Ontario Pension Plan (HOOPP), 43% of Canadians believe they may never be able to retire because of their financial situation, while 50% expect they’ll continue working in some capacity during retirement.

The concern is particularly pronounced among Canadians approaching retirement age. Nearly two-thirds (63%) of adults aged 55 to 64 said they don’t feel financially prepared for retirement.

Part of the challenge is that today’s workers can’t rely on the same retirement framework previous generations enjoyed.

An annual retirement study from IG Wealth Management found that less than half (48%) of non-retired Canadians have access to an employer-sponsored pension, leaving many workers increasingly responsible for building their own retirement income.

The study also found that only one in three Canadians have a formal retirement plan, while just 11% know how much annual income they’ll actually need once they stop working.

As a result, many Canadians are looking beyond traditional pensions and registered savings to strengthen their retirement plans.

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Home equity is becoming part of the conversation

For homeowners, that increasingly includes the equity they’ve built in their homes over decades.

Research commissioned by HomeEquity Bank found that 90% of Canadians aged 45 and older hope to remain in their homes as they age, reflecting a strong preference to “age in place” rather than move into assisted living or downsize immediately after retirement.

But staying in the family home comes with ongoing costs, including property taxes, insurance, maintenance and, in many cases, renovations to make the home safer and more accessible.

That’s prompting more homeowners to consider how the equity they’ve built over decades could help support their retirement lifestyle.

Depending on their financial situation, that could mean downsizing to free up cash, using a home equity line of credit (HELOC) to cover short-term expenses, or exploring a reverse mortgage to access a portion of their home’s value without selling.

Financial planners generally stress that each option comes with trade-offs. Reverse mortgages, for example, can provide tax-free cash flow while allowing homeowners to remain in their homes, but they also reduce the equity available in the property over time. Downsizing may unlock significant capital but often means leaving a long-time family home and taking on the costs of moving.

Rather than viewing home equity as an all-or-nothing decision, experts increasingly see it as one component of a broader retirement strategy.

More broadly, financial planners say retirement is becoming less about relying on a single source of income and more about building flexibility.