Early retirement forces Canadian workers to make hard choices before they leave work
Plan members are spending nearly six hours monthly managing personal finances at work, and employees absent due to financial stress miss an average of six days every six months.
This workplace disruption takes a concrete toll on productivity.
According to Manulife's 2025 Financial Resilience and Longevity Report, the root cause goes beyond money management.
Workers lack confidence that their retirement strategies will sustain them through potentially four decades away from the labour force.
The findings reveal an urgent gap between where Canadian workers are and where they need to be.
Half report feeling behind schedule on retirement savings—a jump from 2020—while 44 percent retire earlier than expected, often forced out by illness, caregiving obligations, or job loss.
This unplanned exit creates cascading financial consequences. Among early retirees, 62 percent make lifestyle adjustments to cut costs, compared to 43 percent who leave work as planned.
Plan sponsors should pay particular attention to Gen X, reported by Manulife.
Roughly one-third of Canadians aged 44 to 58 have less than $50,000 saved for retirement.
Julie Seberras, head of wealth planning and practice management at Manulife Wealth, highlighted the urgency of the situation.
She said, "Some of these are really on that cusp of retirement, and close to that age where we were seeing that people were retiring early."
Seberras noted that individuals with less than $50,000 saved are probably not on track for retirement.
This generation faces a particular squeeze.
According to Manulife's findings, 63 percent of Gen X manage not only their own households but also provide financial support for parents or children—the "sandwich generation" reality that strains retirement contributions.
Workers forced into early retirement encounter limited options to recover.
As Seberras noted, "You can't push it out, and you can't save more at that point in time," leaving only the choice to reduce retirement income goals.
While retirement planning becomes the top priority as workers age, adoption rates vary dramatically.
Forty-nine percent of Baby Boomers maintain a formal retirement plan, but only 26 percent of Millennials do.
Gen Z reports the highest financial strain, with 48 percent describing their finances as fair or poor and prioritizing day-to-day expenses over retirement savings.
Across all generations, inflation anxiety persists.
At least 50 percent of each cohort worries about inflation and rising living costs, as reported by Manulife.
Baby Boomers, despite rising home equity, express surprising debt concerns—40 percent prioritize becoming debt free before or during retirement.
Manulife recommends plan sponsors use several evidence-based strategies.
Interactive activities help younger members visualize retirement outcomes and understand how early decisions compound over time.
Age-targeted small group meetings prove more effective than general sessions, as people engage more readily with peers facing similar challenges and feel comfortable asking questions in smaller settings.
Personal stories carry particular weight.
Video testimonials featuring members discussing challenges they overcame create connection and relatability—especially valuable for helping workers understand that retirement planning extends beyond dollars.
As one retiree observed, retirement requires more than financial preparation: "I have seen people unable to cope with retirement. The issue isn't financial. It is about maintaining a purpose in one's life."
According to Manulife, 57 percent of employees say their employer influences financial decision-making, with 67 percent expressing interest in help forecasting retirement income and 65 percent wanting recommendations on government benefits like OAS/CPP/QPP.
BNN Bloomberg reports that individuals who retired as planned or later experience less financial stress in retirement, with only 19 percent feeling more stress than during their working years—compared to 32 percent of early retirees.
Julie Seberras emphasizes the importance of stress testing retirement plans.
She asks questions such as, "What if inflation is higher? What if there's an impact to my health or mobility? What if I can no longer live in my home? What if expenses rise?"
Seberras says these scenarios need to be considered when stress testing a plan.
With typical working lives spanning 35 to 40 years, many Canadians now face equally lengthy retirements.
