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According to the Financial Post, as of September 2024, roughly 2 million Canadians are considered millionaires (1). If you’re one of them, you might have the extraordinary privilege of being able to retire whenever you want.
A 2025 BMO survey revealed that Canadians consider $1.54 million to be the “magic number” for retirement (2). So, if you have more than that amount, you could be ready to start enjoying your sunset years.
On the other hand, you may choose to keep working and growing your wealth. Many high-net-worth Canadians stay in their careers well past traditional retirement age — often because they enjoy the work and value the routine. Even legendary investor and entrepreneur Warren Buffett continued working into his 90s.
Still, working longer isn’t the right choice for everyone. If you’ve already hit your financial goals, stepping away earlier can offer benefits that go beyond money. Here are three reasons retiring around age 62 may be worth considering once you reach your financial milestones.
The 4% rule, developed by William Bengen in the 1990s, has long been a go-to guideline for retirement planning. His research showed that retirees could likely make their savings last about 30 years by withdrawing 4% of their portfolio in the first year of retirement, then adjusting that amount each subsequent year to keep up with inflation.
For many Canadians, the rule offers a useful starting point. It helps frame how much income a portfolio might safely generate without retirees outliving their savings. Once your savings reach a specific level, however, it can become more of a reference point than a hard limit.
With a $1.5 million portfolio, a 4% withdrawal would deliver about $60,000 income a year before taxes. Add income from government pensions like the Canada Pensions Plan (CPP) and Old Age Security (OAS), your total cash flow could be more than enough to support a comfortable lifestyle. If your investments perform better than long-term averages, you may even find yourself accumulating wealth rather than drawing it down.
Reaching this $1.5 million milestone gives you options. If work no longer brings you satisfaction, you may not need to continue with it just for the paycheque. Extra cash flow can be redirected to what matters most to you — whether that’s helping family, supporting charities or spending more time on pursuits that are meaningful to you.
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Retiring around age 62 with a $1.5-million portfolio often gives you the flexibility to delay government benefits — and that can be a smart tax move. In Canada, this usually means holding off on CPP and OAS while drawing income from personal savings instead.
CPP can be taken as early as 60, but delaying it increases your monthly payment by 0.7% for every month you wait after age 65, up to age 70. This gives you a boost of as much as 42% for life, according to the federal government (3).
OAS also grows if you delay it, rising 0.6% monthly after age 65 for a maximum increase of 36% at age 70.
Waiting to collect these benefits can lower your taxable income in your early retirement years, potentially keeping you in a lower tax bracket. That creates room for strategic tax planning — such as drawing down from your Registered Retirement Savings Plan (RRSP) — before your savings must be converted to a Registered Retirement Income Fund (RRIF) by age 71, when minimum withdrawals become mandatory.
The lower-income window can also be used to shift money into a Tax-Free Savings Account (TFSA), realize capital gains gradually, or smooth income over time to avoid higher marginal tax rates later. If you have a seven-digit portfolio, managing taxes often becomes a bigger concern than running out of money. Retiring earlier can give you time and flexibility to plan those moves carefully, and keep more of what you’ve saved.
Canadians are living longer than ever, but longevity doesn’t always equal good health. According to Statistics Canada, the average life expectancy is 81.9 years — 79.9 years for men, and 84 years for women (4).
However, the more important question is: How many of those years are likely to be spent in good health? The World Health Organization (WHO) tracks something called health-adjusted life expectancy (HALE), which estimates how many years people live without major illness or disability. In Canada, HALE is about 71 years — meaning the average Canadian spends roughly a decade dealing with health limitations later in life (5).
Retiring earlier may mean drawing from a smaller portfolio, but it can buy you something money can’t replace: healthy, active time to enjoy your sunset years. If you’ve already met your financial goals, consider whether working longer truly improves your life, or simply grows a balance you may never get to enjoy. For many Canadians, stepping away from work sooner can be the more rewarding choice.
—With files from Melanie Huddart
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Financial Post (1); BMO (2); Government of Canada (3, (4); World Health Organization (5);
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.