In 1970, the average Canadian was expected to live to be 72. In 2023, that number rose to 81 years old.
This means that if you retired in 1970 at 65, you’re planning – on average – for about 7 years of retirement.
But, if you’re the average person retiring today, you’re potentially looking at an additional 9 years of retirement to plan ... and pay for.
And because our health can decline as we get older, you may also need to plan for a different kind of retirement – one where your medical costs might outpace your savings.
Here are some ideas and strategies to consider.
What is longevity risk in retirement?
The longer you live, the more money you will need in retirement – and the greater the chance that you could outlive your financial plan.
This is called “longevity risk” in retirement.
It’s a real concern. A recent survey by the Canada Pension Plan Investments found that 61 percent of Canadians worry about running out of money in their retirement.
And even if your plan is to still work part-time in retirement, there’s also the risk that your “healthspan,” or years of good health, might not be the same as your lifespan.
This “health gap” can be significant. For example, you could live into your 80s, but your health costs may start increasing when you’re in your 70s. It’s something that’s important to account to help ensure you can have the retirement you want.
The health gap and its financial impact
A longer lifespan also doesn’t always translate into a longer “healthspan.”
According to the National Initiative for Care of the Elderly, this is when you’re “in good health, free from chronic diseases and aging-related disabilities.”
As you get older, your chance of poor health increases. For example, Statistics Canada says that 73% of Canadians over 65 have at least 1 chronic condition.
Declining health often also means higher expenses. You may need to pay for an assisted living facility or in-home nursing, for example, or invest in mobility aids.
And even routine medical needs, like vision care or dental work, may not be covered fully by government healthcare. This is why you might consider private health insurance, like Freedom to Choose ™ health and dental insurance, to help cover rising out-of-pocket expenses as you age.
How to plan for a longer, healthier retirement
Many Canadians feel underprepared for their retirement.
In 2025, Toronto Metropolitan University found that 39% of Canadians over 50 feel like they aren’t in a financial position to retire. Even more starkly, 50% of the people over 80 who are still working say they aren’t able to retire as they had planned.
The reason? According to the TMU study, for 70% of people, it was inflation and the rising cost of living. A recent CPP Investments survey found that Canadians had increased their goal retirement savings 30% in just the last 2 years, moving the goal post from $700,000 to $900,000.
A decline in workplace benefits like pensions, which have helped other generations shoulder the cost of their retirement, may also be a contributing to this stress. For example, a 2023 study by the Canadian Centre For Policy Alternatives found that 77% of employed Canadians were not part of a registered pension plan.
And while the numbers might be intimidating, there are things you can do to help yourself retire healthier – and wealthier.
For example, you could:
- Start saving and investing in your TFSA and RRSP as early and as often as possible, harnessing the power of time and compounding growth.
- Consider segregated funds , which have guarantees to help protect your investments and offer diversification, as part of your retirement portfolio.
- Look into mutual funds, which allow you to pool your money with other investors and spread your money more wisely than investing on your own.
- If you have one, maximize your contributions to your workplace savings plan. Check to see if your employer offers matching for your contributions too.
- If you have a workplace benefits plan through Canada Life, head to My Canada Life At Work to check your balances and stay on top of your progress towards your retirement goal. If you’re not already contributing, consider starting, or increasing your contributions if possible.
- Not sure if you’re on track for retirement? Use this Retirement Savings Calculator to get a sense of what you might need for the retirement you want.
Prioritize prevention
While some things are out of our control, there are ways you can proactively work to extend your healthspan.
This can start many years before retirement, and doesn’t need to cost very much at all: Eat well, get enough sleep, stay active and take advantage of opportunities for early detection, like cancer screenings and regular checkups.
While you’re still working, if you have workplace benefits, you could take full advantage of your benefits – looking after your teeth, getting massages to help prevent injury, working with a professional to care for your mental health – to help set yourself up for success in your senior years.
If you don’t have workplace benefits, you could look into private health insurance to help ensure you have access to those same preventative services without the out-of-pocket burden. Freedom to Choose health and dental insurance, which offers a variety of plans to choose from, can be a great option for retirees who may have lost their workplace benefits or seen their coverage reduced with retirement. These plans can cover common health needs like visits to the dentist, prescription drugs, glasses and contacts, and hearing aids or home health aides.
And, as you head into retirement, do things to keep yourself active and healthy, whether that’s staying involved in your community, keeping your hand in professionally to stay stimulated and connected, or taking small daily steps to increase your healthspan like exercise and eating well.