Most people expect to retire around age 60 to 65.
We see retirement as a milestone that comes after decades of work, saving and planning – on a timeline that feels predictable. But the reality is a little more complicated.
Nearly half of Canadians retire earlier than expected – often due to health challenges, caregiving responsibilities or unexpected job changes as industries evolve and roles shift.
Genus Portfolio Manager Jill Bester sees it regularly with her clients. “Some people plan to retire at 65, while others have the concept of freedom 55 in mind,” she says. “But realistically, one-third of early retirees point to personal health issues, illness or disability that required them to stop working early.” On top of that, caregiving responsibilities and unexpected layoffs can put a wrench in the best laid plans.
And yet, most financial plans are built around the assumption that income will continue, uninterrupted, until retirement. So what happens if it doesn’t?
In Bester’s experience, this is one of the most important – and underdeveloped – areas of financial planning. “We all have these rose-coloured glasses – that it’s not going to happen to me,” she says. “Until it does.”
Here are some ways to help make your financial and personal plans more flexible – and to plan for retirement when you don’t know exactly when that milestone will arrive.
The missing pieces in most retirement plans
Most financial plans focus on building wealth. Far fewer account for what could interrupt that process.
Leaving the workforce earlier than planned often means losing your highest earning years – right when your ability to save is strongest. It can also impact your government benefits like the Canada Pension Plan, which is tied to your earning history. Retiring even a few years early can reduce your lifetime income. At the same time, you may need to draw on your investments sooner – and for longer – which may place additional demands on your portfolio.
That’s why Bester says insurance can be an important component of a broader financial plan, often addressed in collaboration with licensed insurance professionals. For her, it isn’t theoretical. In her thirties, she faced a health crisis – an experience that brought the importance of early planning into sharp focus. Because she had insurance in place, she had financial support when she needed it. Just as importantly, she saw firsthand how quickly circumstances can change – and how difficult it can be to put protections in place after the fact. Today, she ensures insurance is part of the broader conversation – bringing in specialists where needed.
There’s also the question of scenario planning. Many people build their plans around a fixed retirement date without stress-testing what happens if that date shifts. “We take a look at what it would mean if you had to retire five or 10 years earlier,” Bester says. “How does that impact your income? Your savings? Your long-term plan?”
Without intentional planning, it’s easy to fall into what Bester describes as a “floundering financial plan” – doing the right things in isolation, but without a clear strategy or understanding of how it all fits together. “You might top up your RRSP once a year, but that’s not really planning,” she says.
A well-structured retirement plan shines a light on what you’re working toward, what risks you’re protecting against and how to adjust if circumstances change.
How to prepare for early retirement (without overcomplicating it)
Preparing for the unexpected doesn’t require a complete overhaul of your financial plan, just a few focused steps:
- Protecting your income early: Insurance isn’t always top of mind for a lot of people, but it can play an important role. Disability and critical illness coverage are often most accessible and affordable in your thirties and forties – before health changes affect insurability. It’s not just about cost; it’s about making sure coverage is there when you need it.
- Building a bigger safety net: An emergency fund is your first line of defence. While three months of expenses has long been the rule of thumb, Bester recommends closer to six, depending on individual circumstances – especially for those in industries facing disruption or income variability.
- Planning for flexibility, not perfection: Rather than anchoring everything to a single retirement date, it helps to run different scenarios. What if retirement happens at 60 instead of 65? How does that change your income, savings or spending? Small adjustments early can prevent bigger ones later.
- Using what’s available to you: Many people overlook the support systems already in place. Caregiving benefits, tax credits and CPP considerations can all play a role in bridging gaps – especially during unexpected transitions.
- Leveraging structural tools: Another overlooked strategy is access to credit. For example, some people may consider securing or expanding a line of credit tied to home equity while they’re still working.
None of this is about predicting exactly what will happen in the future. But it is about giving yourself options if things don’t go according to plan.
Consider the emotional impact of early retirement
The financial impact of early retirement is only part of the story. The emotional side can be just as significant – and often less expected.
For many people, work provides more than an income. It brings structure, identity and a sense of purpose. When that’s taken away earlier than planned, it can leave a gap that may not be fully addressed by financial security alone. Even those who are well-prepared financially can find the transition disorienting.
That’s where mental flexibility becomes as essential as financial flexibility – the ability to adapt, rethink your lifestyle and redefine what ‘retirement’ means to help the experience unfold smoothly.
Bester has seen some clients initially struggle with the loss of routine or professional identity, but she says many go on to find a renewed sense of purpose. “There can be a silver lining,” she adds, highlighting the possibility of part-time work, volunteering, mentoring or getting involved in community organizations – all ways of contributing that feel meaningful, without the same pressures of full-time employment.
In some cases, stepping away from work – especially if it wasn’t entirely by choice – can create the space to reassess priorities. The key is recognizing that retirement – even when it comes early – isn’t an ending, it’s a transition. And with the right mindset combined with a flexible financial plan, it can still be a purposeful one.
Interested in building a retirement income strategy that meets your unique needs? Speak with a Genus advisor today.
References:
The 40-year retirement — balancing dreams and dollars. (2025, November). Manulife. Retrieved May 5, 2026, from https://www.manulife.com/content/dam/manulife-com/ca/en/retirement/financial-stress/manulife-financial-resilience-and-longevity-canada-report-2025.pdf
This document is provided for general information purposes only and is not a substitute for professional advice. It does not constitute investment, legal, accounting, tax, or other advice or recommendations, nor should it be relied upon as the basis for any decision. Readers should seek specific professional guidance before making financial or investment decisions. Certain information herein is based on third-party sources believed to be reliable, but its accuracy and completeness are not guaranteed. Past performance is not a guarantee of future results.
