Why Some Canadians are Not Ready to Retire
Debt. Employment insecurity. Fear of getting it wrong. Not knowing how or where to start. We believe some Canadians are simply not ready to retire.
If that’s you or someone you know, this post will help!
Read on…
Why some Canadians are not ready to retire
According to an article we found as of 2025-2026…
“…roughly 59% of non-retired Canadians believe they will never be in a financial position to retire, and 66% expect to continue working in some capacity during their retirement years to support themselves.”
That’s quite the stat. (Source: https://www.hrreporter.com/)
Ideally, retirement should be a choice – a welcomed one. The ability to control your time and energy is something that we here at Cashflows & Portfolios have valued for many years now.
For us, Financial Independence, Retire Early (FIRE) was never the goal.
Financial Independence was.
Financial independence—having sufficient personal wealth to live from without being forced to work for income—provides several key benefits centered on control of time, freedom, and quite simply, reduced stress. For us, it means having enough reasonable income generated from the portfolio to cover all living expenses, indefinitely.
Financial independence offers so many benefits that we’re both seeing and feeling now:
- You have total control over your time – you choose how to spend your days without being constrained to work for someone or something.
- You have the freedom to choose work (or not) – you can work on your own terms, switch careers, start a business, or pursue passions without worrying about financial survival.
- You have less financial stress and better overall health – there is no more anxiety associated with debt, job insecurity, or emergency expenses required.
- You have the flexibility and freedom to live better – you can live a life aligned with your values, rather than being forced to make decisions based solely on cost.
- You have the opportunity to pursue passions – you can dedicate time to hobbies, family, friends, or projects that are personally fulfilling rather than financially lucrative.
Reaching financial independence is likely the goal of many, but it does come with drawbacks:
- You may need a budget.
- You may need to make some tough spending choices.
- You will need to keep saving and investing discipline intact for not just years, but likely decades.
Why aren’t many Canadians retirement ready?
Despite many personal finance rules of thumb at the fingertips of every adult Canadian, most Canadians are not retirement ready – even at retirement age.
There are many factors why Canadians are not retirement ready:
- Debt. Debt is both common and encouraged. It’s tough to fight the marketing machines.
- Employment insecurity. That seems to be ramping up these days, and with that, unfortunately, layoffs for many might follow.
- Not knowing where to start. You might not know what you don’t know. So, you can feel helpless in terms of knowing where or whom to turn to.
Building a retirement plan or retirement income plan can feel overwhelming to many – but it’s full of opportunities, too.
- To align your spending activities with your values, and
- To ensure you are giving yourself the best chance at financial independence success.
To help you overcome the reasons why you may not be retirement ready, we’ve offered some simple solutions in the table below.
Why you’re not retirement ready | Solutions / Guidance |
| 1. Financial Constraints and High Cost of Living· Rising costs for essentials like groceries, utilities, and housing can make it difficult to save. · Persistent debt (including mortgages and consumer debt) can be a barrier to retirement. | · Before you buy a house, a car, or make any major purchase – ensure you have a budget or debt repayment plan in place for what you can reasonably afford.· If you cannot come up with one on your own – seek help. |
| 2. Shifting Priorities· Rising costs, like insurance or property taxes, have occurred in recent years. Inflation is everywhere and will remain a headwind to fight. · Many families are experiencing shifting priorities – including supporting elderly parents (financially or otherwise) which can make saving and time for your own retirement planning, difficult. | · Plan for things to change – because they will. Carve out time in advance for you to plan your own needs and wants – months in advance. · Any retirement income plan or projections work must include at least 2.5% inflation as a baseline. · Any cashflow plan for your expenses should have at least a 10% buffer built-in, per year, every year.
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| 3. Lack of a plan· We’ve read various reports that mention almost 50% of adult Canadians do not have any retirement income plan – yikes! · Without a plan or set of projections – how do you know when the sum of your income sources including government benefits will come together to meet your needs and wants?? (Spoiler alert: you don’t!)
| · Get a plan or retirement income projections report completed – that includes reasonable assumptions for all your income sources in retirement, the timing of those sources, and any projections reports MUST include reasonable rates of return and inflation projections as well.Contact Us to get started for a low-cost! |
How do you Build a Comfortable Retirement Plan?
Start now.
We sincerely mean it.
The first step in any planning is acknowledging you need one.
The sooner you start your retirement income planning and projections work, the better off you will be.
And…retirement income planning is not a one-time deal. Far from it!
Retirement income plans or projections should be reviewed at least annually and even more frequently if one or more of the following apply in any given year, to re-evaluate your cash flow:
- A life event – marriage, a birth, a family death, or changes in health status.
- Taking on debt or removing all debt.
- If/when any emergency funds have been used or financial emergencies have occurred.
Managing money and the cash flow associated with it is a critical life skill. Do it well, like good diet and exercise habits, and you’ll likely be rewarded. Do it poorly, and consequences may happen.
Whether you are approaching retirement or already retired, having a well-structured income plan will make all the difference – knowing what you can spend, could spend or will spend versus not being ready at all.
Need Help with Mastering your Cashflow for Retirement Income Planning?
Everyone has different retirement income needs and wants.
We know.
We are both semi-retired here at Cashflows & Portfolios and we’ll retire earlier than most because of our knowledge, applied expertise, and services in this space!
And because we will retire early, we will need to rely on our portfolios to do some of the heavy work since we’re far too young to tap government benefits nor do we want to spend our TFSAs (Tax-Free Savings Accounts) in early retirement either.
For any retiree, especially early retirees like us, retirement drawdown questions and options can seem endless:
- What registered accounts do I draw down first? How fast can I spend the registered money?
- How much income will my investments generate? Is that enough to meet my needs?
- Do I have any idea how long this income might last?
- What amount of taxes will my withdrawals incur?
- When should I take my workplace pension, if I am lucky enough to have one?
- Is it more beneficial to draw down non-registered money before RRSPs?
- Can I avoid OAS clawbacks?
- And much, much more…
If you are interested in obtaining private projections for your financial scenario, please contact us here to get started.
Thanks for your ongoing readership and for sharing this site with others over the years – our site and work and services to DIY investors continue to grow. As an example, a big thanks to Rob Carrick for mentioning our site and services in The Globe and Mail a few times.
“TODAY’S FINANCIAL TOOL
Cashflow$ & Portfolios is the name of a website built to help people learn how to reach their long-term financial goals with budget and long-term investing. Brought to you by a pair of veteran personal finance bloggers.”
Yup, that’s us! We appreciate every comment, email, and every client interaction.
We hope you got some value out of this comprehensive post, and we’ll continue to add to it over time!
Contact us anytime to get started on your retirement projections. We’ll even give you a discount off your reports when you mention this post!
Mark & Joe.