Rising mortgage balances and higher interest rates are making it difficult for many Canadians to retire as planned, according to recent data from Statistics Canada. The report reveals that in 2023,13.1% of the population, aged 55 to 64 are nearing retirement. However, growing financial pressures may force many to delay this milestone. 
The Impact of Rising Mortgage Debt
Mortgage liabilities for Canadians aged 55 to 64 jumped to $315.7 billion in the first quarter of 2024. Up from $244.2 billion in 2020. For those aged 65 and older, mortgage debt surged from $97.2 billion to $141.2 billion over the same period. This increase is primarily due to interest rate hikes by the Bank of Canada, between 2022 and 2024. This pushed accommodation prices up by 25.3% and mortgage interest costs by a staggering 46.2%. These rising expenses are squeezing household budgets and causing many to rethink their retirement plans.
Financial Stress Delaying Retirement
A Labour Force Survey supplement from June 2023, found that more than one in five Canadians aged 55 to 59 are either partially or fully retired. However, financial constraints are delaying retirement for others. Over a third of men (35%) and nearly 28.2% of women in this age group, cited financial reasons for postponing retirement. In fact, more than one in five seniors aged 65 to 74, were still working in 2022. Many of them full-time!
Looking Ahead
As mortgage debt and living costs rise, many Canadians will likely remain in the workforce longer, delaying their retirement plans. Statistics Canada projects that by 2041, 23.1% of the labour force, will be aged 55 and older. Highlighting the growing financial strain on aging Canadians.
