Young Canadians are fundamentally redrawing the map of their working lives and retirement plans. That shift creates significant impacts for life, health, group benefits and wealth providers, according to a new survey from Co-operators.
The research, focused on Canadians under 35, found that two‑thirds (65%) expect retirement to look different for their generation than it did for their parents. That sentiment is emerging in a labor market where hiring of workers under 25 has fallen about 30% since 2019, making early‑career stability harder to achieve and weakening the foundation for traditional retirement saving.
Nearly half (49%) of young Canadians now believe it will be financially necessary to work longer and retire later than their parents, and a third (33%) don’t think they will ever be able to fully retire. For insurers, that points to demand for more flexible products and advice that assume later, non‑linear retirement rather than a clean break at 65.
Rather than simply pushing retirement out, under‑35s are reimagining the shape of their working lives. Half said their ideal job offers a flexible schedule (50%) and a similar share (48%) prioritize strong work‑life balance. Around four in 10 (38%) want to “live their lives now,” and 40% say the idea of “micro‑retirements” – short, intermittent breaks from full‑time work – is appealing.
Those preferences cut across core insurance lines. Long‑term disability, critical illness and income protection products have traditionally been designed around relatively steady careers and binary “on claim/off claim” states. If more clients pursue stop‑start careers, gig work or planned career breaks, insurers may need to revisit how they define eligibility, waiting periods and return‑to‑work support – particularly as mental health becomes a larger component of claims.
“This generation is adapting to reality, and financial planning needs to adapt with it,” said Jess Baker, EVP and chief retail sales officer at Co‑operators. “They expect to work later in life and it naturally follows that mental wellbeing, work-life balance and flexibility would become an increased priority.”
The survey underlined that many young Canadians are not just philosophically rethinking retirement; they are also struggling with immediate affordability.
Fewer than half (44%) said they can cover basic expenses and still set aside money for savings. Only 38% reported regularly saving for retirement, compared to 54% of Canadians aged 35 to 44. That gap is material for insurers selling long‑term savings, annuities and permanent life: products that rely on steady contributions could be harder to sustain in this cohort without more flexible premium and contribution options.
High household leverage adds to the pressure. With Canadian household debt sitting well above disposable income, younger households have limited room to absorb shocks or increase RRSP, TFSA or group plan contributions. This heightens lapse risk in individual life and health products when budgets tighten, and increases the value of premium‑waiver features and bundled emergency‑savings tools.
At the same time, nearly three‑quarters (72%) of respondents are either saving, or want to save, specifically to improve their work‑life balance – for example, to fund time off or career changes. Yet fewer than half believe their current investing habits will deliver genuine financial stability. That mismatch suggests an opportunity for insurers and advisors to position protection and savings solutions explicitly as enablers of flexibility and resilience, not just distant retirement income.
Furthermore, the Co‑operators findings on stress, burnout and interest in micro‑retirements dovetail with broader claims trends. Across the Canadian market, mental health now accounts for a growing share of long‑term disability claims among younger workers, especially in white‑collar and knowledge‑based roles. For carriers, that puts a premium on preventative benefits – digital therapy, employee assistance programs, resilience training – and on claims models that support partial work and rehabilitation rather than long stretches fully off work.
If more under‑35s expect to work into older age, sustained mental and physical health will be central to protecting both human capital and insurers’ own loss ratios.
Co‑operators’ survey also pointed to a clear advice gap that insurers and MGAs can address. Young Canadians whose investments are managed by a financial advisor are more likely to feel positive about their financial situation than those without one (54% versus 39%).
“The increasing financial stress this generation is experiencing is compounding an already difficult path to financial security. They’re trying to prioritize the right things but face barriers at every turn,” Baker said. “In this new era of financial planning, advice must be about more than long-term goals and retirement.”
