In my early days

as an adviser

, I worked with a client who had spent more than four decades in a demanding professional role, often working long weeks. His financial plan worked exactly as expected when he finally retired, but what surprised him was everything else.

Without meetings, deadlines or colleagues, his days suddenly felt unstructured and disorienting. Within a year, he was consulting part time again, not because he needed the income, but because work had always provided something more than a paycheque.

Stories such as these help explain

why retirement is changing

. For decades, retirement was seen as a reward for years of hard work. But for many Canadians today, the idea of stopping work at 65 is becoming less common.

The share of Canadians aged 65 and older participating in the workforce has nearly doubled over the past few decades, reaching roughly 15 per cent in 2023, according to Statistics Canada’s Labour Force Survey. The trend reflects a clear shift in how Canadians are approaching retirement.

Retirement no longer follows a predictable path that begins at 65 and settles into decades of leisure. The more relevant question in 2026 isn’t when to retire, but how to step away from work without undermining your finances, health or sense of self.

Behind the curtain

Retirement once followed a clear script: work, stop,

draw on pensions and savings

. That script has become far less predictable.

Inflation has reshaped household budgets, and more Canadians are entering retirement with mortgages or other forms of debt. Some have never completed a financial plan for retirement and simply don’t know whether their savings are enough to step away with confidence.

At the same time, housing affordability and education costs are prompting many parents to remain in the workforce longer to help adult children with down payments, private school tuition or child care for grandchildren.

For others, the decision to keep working has little to do with money. Work can offer structure, routine and social connection. For professionals whose identities have long been tied to their careers, stepping away can feel disorienting. In that sense, retirement is not only a financial shift, but a change in identity and lifestyle.

The challenge is that most people don’t actually know whether they need to keep working until someone runs the numbers. A formal retirement plan can clarify that quickly.

Using conservative assumptions that account for inflation, taxes, pensions and future health-care costs while building in a buffer for unexpected expenses allows people to make decisions with greater confidence and align their retirement with the lifestyle they want.

Retirement or “rewirement”

If retirement is no longer tied to a fixed age, it also shouldn’t have to be a hard stop. Stepping away from full-time work is often better approached as a gradual transition. Instead of retirement, think of it as “rewirement.”

Immediately ending a structured 40-hour workweek after 45 years in the workforce can feel abrupt and disorienting. Many people are better served by scaling back responsibilities over time. That might mean consulting, contract work, board service or volunteer roles.

For some, the income from this work is less about necessity and more like a “playcheque” than a paycheque, providing extra money for travel, dining out, or discretionary spending.

Just as important as the income is the structure work provides, and adjustments can be harder than expected when that structure disappears overnight. Work often shapes identity and daily routines, particularly for professionals whose careers have defined much of their lives. It can affect relationships, social networks and overall well-being when those routines suddenly change.

Retirement is not a single event but a transition, and approaching it gradually often leads to a smoother landing.

Hidden costs of working longer

Continuing to work can strengthen a retirement plan, but it can also complicate one.

Layering employment income on top of

Canada Pension Plan

(CPP) benefits,

Old Age Security

and mandatory

registered retirement income fund

(RRIF) withdrawals can quietly push a retiree into a higher tax bracket or trigger benefit clawbacks.

What feels like extra income may be less efficient than it appears once marginal tax rates and income-tested benefits are factored in.

The mechanics matter when it comes to

retirement planning

. Decisions around when to begin CPP become more nuanced when employment income continues, since CPP benefits are taxable and may be taxed at a higher marginal rate if someone is still earning a salary.

Similarly, after age 71, RRIF withdrawals become mandatory whether the funds are needed or not. If someone is still earning employment income at that point, those withdrawals are added on top of their income, possibly pushing them into higher tax brackets or reducing government benefit eligibility. Without careful coordination, multiple income streams can reduce flexibility rather than enhance it.

Working longer can still be advantageous, but only when it is part of a clear strategy that accounts for taxes, government benefits and required withdrawals. Without planning, additional income can dilute the very advantage it was meant to provide.

These are decisions best considered years before retirement begins, not improvised once it is underway.

Retirement is no longer a finish line. It is a multi-year transition that deserves as much thought and planning as the career that comes before it.

That transition goes beyond spreadsheets. It requires clarity around identity, health, purpose and relationships.

A well-constructed portfolio matters

, but so does building a life that remains balanced as work begins to change shape. The goal is not to stop working at the “right” age, but rather to build a life that continues to function, financially and personally, as work begins to change shape.

Alexandra Horwood is a senior portfolio manager and senior investment adviser at Richardson Wealth.

  • Are GICs enough to keep Silvia’s nest egg going?
  • Garry Marr: Bad news, gen Z — The Freedom 55 guy is still working in his 60s and you will be, too