Why Many Canadians May Return to Work After Retirement

The idea of “unretirement”—delaying retirement or returning to work after retiring—is resurfacing as many Canadians face growing economic pressure. Long before recent tariff headlines, seniors and those nearing retirement were already feeling squeezed by persistent uncertainty and rising living costs. As a result, an increasing number of Canadians approaching retirement are postponing their exit from the workforce.

A recent Canadian retirement study by the Healthcare of Ontario Pension Plan (HOOPP) found that 28% of working Canadians aged 55 to 64 expect to continue working during retirement to support themselves financially. HOOPP’s definition of “unretirement” covers people who are neither fully retired nor semi-retired—those who may still be employed, working part-time, or not retired for other reasons. Regardless of the exact definition, the survey—conducted in spring 2024 with 2,000 respondents aged 18 and older—highlights how high interest rates and elevated living costs are undermining Canadians’ ability to save and manage daily expenses, threatening retirement preparedness.

Other research points to similar trends. Toronto-based Bloom Finance Co. Ltd., which focuses on reverse mortgages and products that let homeowners access home equity, found in partnership with Angus Reid that 46% of Canadians are considering part-time work in retirement. A 2024 Fidelity survey likewise reported that half of Canadians plan to delay retirement. Bloom’s March 2024 report showed 67% of homeowners over 55 worry their savings won’t sustain their retirement lifestyle; only 29% were considering downsizing or alternative living arrangements to access home equity earlier, while 59% agreed that accessing small amounts of their home’s equity would help them maintain their desired standard of living.

Inflation is the retirement killer

Inflation has hit seniors hard. According to Bloom’s founder Ben McCabe, many older Canadians never had sufficient disposable income during their working years to build sizable, inflation-hedging investment portfolios—even if they managed to pay off their mortgages. Bloom’s average client is 71, and the company focuses on helping that demographic tap home equity as a source of income.

BMO’s 15th annual retirement survey, released in early 2025, found that 76% of Canadians worry rising prices will leave them short in retirement. The November survey of 1,500 adults found the average perceived nest egg needed for retirement fell to $1.54 million from $1.67 million the prior year. Statistics Canada data referenced in industry reporting suggests less than half of Canadians have workplace pensions, and many seniors generate modest annual income; roughly 59% of seniors receive less than $35,000 per year, leaving two-thirds feeling their savings are insufficient for retirement and fewer than one in five able to withstand financial shocks like the need for home care.

Bloom’s small survey of younger seniors aged 60 to 64 found that 61% of respondents felt they needed at least $20,000 in buffer funds this year to feel financially secure. McCabe emphasizes that tapping home equity is not about withdrawing lumps from a large-value property, but about boosting monthly income efficiently—moving a safe withdrawal rate from 4% to 5% or 6%, which can translate into materially more income, some of it tax-free. He points out that roughly 75% of Canadian seniors live in their own homes while only about 14% to 16% carry mortgage debt, so many own their homes outright and could consider equity-based options.

Bloom offers Canada’s only non-bank reverse mortgage product and a Home Equity Prepaid Mastercard that allows homeowners to access up to $2,000 a month in home equity, with an interest rate aligned with the reverse mortgage product (reported at 6.69%). The card is positioned as a payment tool to access small increments of home equity rather than as a traditional credit card.

Women tend to be less financially prepared for retirement

HOOPP’s research highlights that women and those closest to retirement are particularly vulnerable, reporting lower savings and higher financial stress. Nearly half of Canadian women (49%) have less than $5,000 in savings, and 28% have no savings at all—compared with 33% and 17% of men, respectively. Among those who are not yet retired, 53% of women did not set aside any retirement savings in the past year, versus 45% of men. Women are more likely to prioritize covering day-to-day living costs (57% versus 49% of men), while men rank saving for retirement slightly higher (51% versus 46% of women).

These financial pressures translate into stronger negative emotions: 51% of women reported feeling anxious about their finances compared with 39% of men; 50% felt fearful (versus 37% of men); 50% felt frustrated (versus 42%); and 46% felt sad (versus 36%). Bloom’s client base is evenly split between single households and couples, with an average household income around $36,000. Typical government retirement benefits land in the mid-$30,000s for couples and the low $20,000s for singles, underscoring why many women—who statistically earn less and live longer—face a double challenge when planning for retirement.

Many find retirement saving “prohibitively expensive”

HOOPP notes that workers with employer-sponsored pensions are generally better positioned to manage retirement challenges. The survey reports 70% of working Canadians now consider saving for retirement “prohibitively expensive,” up from 66% the previous year, and 57% say they feel unprepared. Alarmingly, 13% of respondents think they will never retire.

The survey also asked Canadians about anticipated sources of retirement income. The Canada Pension Plan/Quebec Pension Plan was cited most often (53%), followed by Old Age Security (49%), RRSPs (45%), TFSAs (37%), earnings from continued work (26%), and workplace pensions (24%). The Guaranteed Income Supplement was identified by 19% as a source, and 11% cited cryptocurrency—an unexpected choice for long-term retirement planning.

Among those without workplace pensions, 48% have under $5,000 in savings; for those with employer pensions, that figure drops to 29%. Unretired Canadians with workplace pensions are far more likely to feel prepared for retirement (59%) than those without (34%). Disaggregated by gender, 49% of unretired women with workplace pensions feel prepared versus 29% without; among men, 66% with a workplace pension feel prepared versus 40% without.

Working Canadians willing to pay for employer pensions

One clear takeaway is that many employees appreciate the structure workplace pensions provide. HOOPP found 70% of respondents would accept a slightly lower salary in exchange for a pension (or a better one) rather than a higher salary without a pension. Likewise, 73% believe a retirement income crisis is emerging. Traditional defined-benefit plans—once common—are increasingly rare outside the public sector and unionized industries, replaced mostly by defined-contribution plans that shift market risk to employees and lack lifetime guaranteed income.

Housing affordability remains a major worry. Among renters, 85% fear rising rents. Many homeowners plan to tap home equity in retirement: 42% of homeowners surveyed overall plan to do so, and 40% of those aged 55 to 64 report the same intention—another reason home-equity solutions have gained attention among older households.

What near-retirees can do about all this

Financial advisors stress that the retirement landscape has shifted dramatically in recent decades. Jobs with lifetime defined-benefit pensions are rare, housing is less accessible, and economic shocks—pandemic, rapid interest-rate rises, and inflation—have compounded uncertainty. With limited alternative resources, many Canadians find continuing to work their only realistic option.

That said, there are practical steps near-retirees can take to improve their prospects. The earlier you start, the easier it is to change course: small adjustments compounded over time matter. Begin with a clear budget to understand income and expenses, identify discretionary spending to trim, and look for ways to increase earnings. Move toward a forced-savings approach by automatically directing a portion of each paycheck into savings or registered accounts.

Registered accounts can be particularly useful. Tax-Free Savings Accounts (TFSAs) are valuable for lower-income Canadians as well as higher earners, because withdrawals in retirement are tax-free and generally do not affect income-tested benefits. For many, maximizing TFSA contributions and participating in workplace pension plans where available are practical, high-impact steps to shore up future income.

So, what can aspiring but anxious would-be retirees do?