15% of Canadians over 65 still working as ‘retirement plans fall apart’

When picturing the traditional idea of retirement, you may think of a lucky person blowing out the candles on a cake, getting a gold watch as a parting gift and heading off to the golf course.

Although, for many, that's not what retirement looks like — it's also not what a growing number of future retirees prefer.

Vanguard recently published an article titled "Retirement is changing – Are you prepared?" which addresses how people are changing their mindset about retirement (1). Vanguard's analysis points to a shift toward phased retirement. While the survey is British, Canadian trends are similar: more older adults are working for pay and retiring later.

So, what is the big change Vanguard is talking about? Retirees no longer want to quit working cold turkey. They want to retire gradually for a mix of financial and social reasons.

Unfortunately, while this may be the dream for many, it's not always the reality.

According to a 2024 study from Manulife, 47% of Canadian retirees ended their careers earlier than they had planned (2). Future workers must be prepared in case it turns out their ideal vision for retirement ends up being just an illusion. In 2023, 15% of those 65 or older were in the labour force — a record — showing rising later-life work, but not everyone can phase out on their terms.

Workers hope retirement will be a more gradual process

The Vanguard report revealed how a majority of future retirees are not interested in just completely stopping work on a set date, with only 24% intending to adopt the cliff-edge view of retirement, working one day and then being retired the next.

Instead, most professionals either plan to scale back hours slowly at their existing job (27%), "mostly" stop work on a set date (21%), or switch to a different job (14%). The reasons cited include: not feeling ready to completely retire, to top up their income and social reasons.

This finding is very similar to that reported by the Government of Canada’s Survey of Older Workers (3), which said that 47% of retirees would work part time during retirement if they’re able to. In 2023, Vanier Institute study, 15.0% of those 65 or older were in the labour force — a record — showing rising later-life work, but not everyone can phase out on their terms (4).

These plans for part-time work mean that life could look very different for tomorrow's seniors — but it's also worth noting that making your financial plans based around this dream could lead to problems.

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Retirees must be prepared: Just in case a phased-in retirement isn't a reality

Vanguard has an important warning for those who plan to retire gradually — it's not always going to happen.

It found that of those who had already retired, only 38% retired gradually, much lower than the 62% of non-retired people who plan to retire gradually. According to the Labour Force Survey of 2023, a record high 15% of adults aged 65 and older in Canada participated in the labour market (5).

This makes it very important to prepare for the reality that you may not be able to retire gradually as planned and be mindful of the following:

• Aim to be financially independent by 65 — earlier if you want options — since health or employment shocks can force an earlier exit.
• Considering your health status and job skills when deciding whether a phased-in retirement is likely to be possible.
• Ottawa highlights ‘age-friendly workplaces’ as key to keeping experienced workers (6). Ask about flexible hours, remote options and pension-with-pay policies.
• Taking good care of your health with exercise and regular preventative care to maximize the chances you'll be healthy enough to phase into retirement gradually
• Setting realistic expectations for your retirement, which likely means working until 70 is probably not in the cards

How to prepare

With the BoC at 2.50% as of September 2025, pre- and post-retirees need to contend with lower-than-expected savings rates. This means lower GIC and high-interest savings account (HISA) saving rates as interest rates drift lower from the recent highs of 2024. To keep up, be sure to revisit your cash-flow ladder and annuity timing. Most experts agree that these lower rates will require retirees to consider a one-to-three year cash (or GIC) buffer as a smooth way to ease into retirement.

Good options include higher paying HISA accounts. For instance, the Simplii Financial HISA account pays 4.5% for new deposits for the first five months. Open a no-fee Simplii Chequing account and you could easily transfer money and and from your HISA to your chequing to pay bills. New accountholders can get $300 cash back and a $50 Skip the Dishes gift card by opening an account before October 31, 2025. Terms and conditions apply.

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Plans vs reality

Surveys say Canadians plan to retire around 64, but the average actual retirement age is around 65 — and a sizeable minority exit earlier due to health or job loss. Still, retirement doesn't have to look like it once did — you can try to set yourself up for the gradual retirement so many dream of but find a way to pivot if those plans do not come into fruition.

Article sources

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

Vanguard: Retirement is changing – Are you prepared? By James Norton (1); Manulife: Manulife Retirement Report Highlights Generational Preparedness and Financial Resilience as Longevity Increases (2); Government of Canada: Age-friendly workplaces: Promoting older worker participation (3); The Vanier Insitute of the Family: Families Count (4); The Vanier Insitute of the Family: More older adults are working 25 for pay and retiring later (5); Government of Canada: Promoting the labour force participation of older Canadians (6)