Manulife reveals Canadians must rethink savings as retirements stretch to 40 years
Canadians are facing the prospect of a 40-year retirement—longer than ever before—yet many are still struggling to align their financial plans with this new reality, according to Manulife’s latest Financial Resilience and Longevity Report.
Retirement is coming faster than expected for many.
Nearly half of retirees surveyed by Manulife left the workforce sooner than planned, with early retirees exiting at an average age of 56.
The reasons are often beyond their control: personal or family illness was the leading cause for early retirement, and the financial impact is significant.
Early retirees are more likely to feel financially stressed, wish they had saved more, and make lifestyle adjustments to cut costs compared to those who retired as planned or later.
The cost of retirement is surprising many Canadians.
As reported by Manulife, retirees consistently cite the rising cost of living and unexpected expenses as the biggest surprises in retirement.
One respondent noted, “The biggest surprise is how much and how quickly the cost of living changes.”
Another shared, “I was surprised that my spending level was about the same, just spending on different things.”
Generational differences are shaping the future of retirement planning.
While saving for retirement is a top priority for Gen X and Baby Boomers, Gen Z is more focused on day-to-day expenses and saving for a home.
Millennials, now the largest group in the workforce, are further behind on retirement savings than Gen Zers and are the least likely to rate their financial situation highly.
Across all generations, inflation and the cost of living remain persistent worries.
Financial stress is impacting productivity.
According to the report, employees are spending an average of 5.5 hours each month managing their finances at work, and financial stress has led to an average of one missed workday in six months.
Over 40 percent of respondents believe they would be more productive without their current financial worries.
Advice from retirees is clear: plan ahead, save early, seek professional advice, and prepare for both the financial and personal aspects of retirement.
As one retiree put it, “Plan ahead. It’s here before you know it.” Another urged, “Pay for professional advice. It is well worth it.”
Employers have a role to play.
Manulife’s findings indicate that 57 percent of workers say their employer influences their financial decision-making.
Tailored education, interactive planning tools, and sharing real-life stories can help spark the “aha moments” that motivate action and build resilience for a longer retirement.
