Retirement Isn't An Age, It's A Phase

For generations, retirement was thought of as an age, and sixty-five seemed to be the magic number. Both government and employer pensions were anchored to this age, and personal and financial plans were built around it. Retirement was considered the finish line, which marked the end of work.

From Age To Stage

But today’s retirees and pre-retirees are redefining what it means to retire, with a focus on living in retirement, not just getting to it. According to The Four Pillars of the New Retirement study¹ commissioned by Edward Jones Canada, the majority of Canadians define retirement as “a new chapter in life”. The focus has shifted from the end of work to the experience ahead.

The Four Pillars: A New Framework For Living Well

The study also found that Canadians who live well in retirement do so across four interconnected pillars: health, family, purpose, and finances. Health enables independence and the ability to enjoy this next chapter. Family provides emotional support and a sense of belonging. Purpose fuels meaning, growth, and daily motivation. Finances enable living well, with those that matter, and with purpose.

But an evolving definition of retirement means how we plan for it financially must change, too. A follow-up study by Edward Jones Canada² uncovered additional themes that are shaping how Canadians must plan for this chapter, including living longer, retiring without employer-sponsored pension plans and the fact that many Canadians want to keep working in retirement. These factors introduce a new set of planning considerations that might make you rethink or adjust your retirement income plans. Let’s review some of the strategies you may want to reflect on for each theme.

Longevity

More than half of Canadians say they want to live to age 100. Further, Canadians tend to live about 25 years longer today than they did a century ago. And while today’s retirees are living longer, the average age of retirement hasn’t changed. Today, Canadians spend about 27 years in retirement. For many, this is almost as long as their working years. When planning for a longer retirement, it’s important that you:

Ensure your planning time horizon reflects your current life expectancy. As you get older, your statistical life expectancy increases. Therefore, as you enter retirement, adjust your planning horizon to at least as long as you think you’ll live. Life expectancy is based on age and gender. (Women typically live a little longer).
Determine the cost of your desired retirement. Consider what it will cost to stay healthy, spend time with family, and live your purpose. Rather than basing this on a rule of thumb, such as a percent of pre-retirement income, prepare a retirement budget for your new chapter. In many cases, the new retirement will be more expensive than the traditional one, especially a new retirement that lasts almost three decades.
Consider balancing growth and income investments. Traditional retirement planning may have suggested moving retirement assets to income-producing assets as soon as you retire. A longer time horizon may be needed to balance income with higher returns, ensuring your money lasts as long as your retirement. Make sure this is based on your personal goals and risk tolerance.

The Shift From Pensions To Personal Responsibility

Fewer Canadians today have employer-sponsored pension plans than in the past, meaning they don’t have income predictability in retirement. In addition, they are forced to save more on their own to make up for that lost pension. If you’re planning for a retirement without a defined benefit or defined contribution pension plan:

Determine how much you’ll need to save for retirement as early as possible. This will give you sufficient time to map out a retirement income strategy and save accordingly.
Determine which accounts are best suited for your retirement plan. Without a pension plan, you’ll probably have more RRSP room. Evaluate the value of different types of accounts that will help you get to your goal.
Consider engaging a financial advisor. Pension assets are managed by professional managers, and income streams are designed to support you in retirement. Hire an advisor to help you develop a retirement income plan and to manage your assets during the accumulation years.
Develop a retirement income plan. Focus not only on money going into your retirement accounts, but model what that will look like when you withdraw from these accounts for suitability, tax efficiency and estate planning optimization.
Consider the impact of your retirement income on income-tested benefits. Withdrawals from registered plans can reduce your eligibility for certain programs like Old Age Security (OAS), if applicable.
Avoid the risk of outliving your savings. Develop a retirement income plan for your lifespan that will support your reality, and review and recalibrate this plan regularly as life changes.

Working In Retirement

While the concept of working in retirement may sound like an oxymoron, one of the most notable findings from the study was that the new definition of retirement often includes work. The definition of work may include full-time work, contract work, consulting, or seasonal work. It may even include volunteering. For those working for pay, this could be out of necessity—to fund a longer, more expensive retirement, or to stay physically and mentally healthy, to remain connected to colleagues or to live out your purpose. Continuing to work comes with a series of financial planning considerations, too, including:

Deciding when to begin collecting Canada Pension Plan (CPP): While the standard age is 65, you can begin collecting as early as 60, at a reduced rate, or as late as 70, at an increased rate, or anytime between 60 and 70. Continuing to work in retirement, or returning to work after retiring, could impact your decision. The best time for you to start collecting is personal. The best way to decide is to be part of a retirement income plan.
Evaluating whether to pay into the CPP Post Retirement Benefit (PRB): If you are collecting CPP and working, you either must contribute (between 60 and 65 years old) or must decide whether to contribute (65 to 70) to the PRB. Contributions lead to a higher CPP benefit later. Considerations include cash flow while working, how long you think you will live, and whether you think you could invest the contributions on your own for a higher or more tax-efficient return.
Considering the impact of decisions on income-tested benefits, such as OAS. Delaying CPP collection may help you qualify for OAS upfront, but the higher CPP later may result in claw back, especially if you’re still earning employment income. Every dollar you earn above $90,997 in 2026 will result in an OAS claw back.

The best way to make these decisions is to map out your expected income over the course of your retirement as part of your retirement income plan which considers your goals, and any relevant tax, estate planning and income testing considerations.

Retirement Readiness Across All Four Pillars

Longevity, the absence of defined pension plans, and working through a new chapter in life have shifted how Canadians retire and how they plan for it. Retirement is no longer the end of the road; it’s the beginning of what’s next, and your retirement needs a plan that reflects your journey.

The study is a reminder that financial decisions directly affect, and are affected by, health, family, and purpose. Financial planning is not just about numbers; it’s about enabling a fulfilling life. Retirement-readiness no longer means hitting a specific age or savings milestone. It means having a financial strategy that can support a longer, evolving next chapter.

Instead of asking, “Do I have enough to retire at 65?” Canadians are increasingly asking, “How do I fund the next 30 years?” And the answer is not a single number, but a strategy that reflects the reality that retirement is no longer an age; it’s a phase.

Julie Petrera, MBA, CFP, CIM is a certified financial planner. X (Twitter): @petrerajulie

1 https://www.edwardjones.ca/sites/default/files/acquiadam/2021-02/Edward-Jones-4-Pillars-CA-report.pdf

2 https://www.edwardjones.ca/ca-en/market-news-insights/retirement/four-pillars