Retirement is more expensive than your client thinks

For decades, retirement planning has centred on asset allocation, withdrawal strategies and market risk. But as Canadians live longer than any previous generation — and face sharply rising health care and long‑term care (LTC) costs — wealth professionals are confronting a new reality. Longevity risk is now inseparable from health risk.

Life expectancy at birth in Canada continues to climb, reaching 83.1 years in 2026. More importantly, survival probability tables show that older Canadians have a meaningful chance of reaching advanced ages.

According to the Canadian Institute of Actuaries, a 70‑year‑old man today has about a 45% chance of reaching age 90 and around a 20% chance of reaching 95. Meanwhile, a 75‑year‑old woman has a 50% chance of reaching age 92 and a 30% chance of reaching 95.

For the wealth industry, that means portfolios must support not only longer lives, but the heightened probability of encountering multiple, expensive health events. The biggest financial threat to retirement security today may not be a market crash — it’s a financial shock brought on by a health diagnosis.

Three of the most financially consequential health risks in Canada are cancer, cardiovascular disease  and dementia. Their probabilities, costs and long‑term implications have a direct impact on wealth longevity.

Cancer — a near 50% lifetime likelihood

Cancer remains one of the most predictable and significant health risks facing retirees. The lifetime probability of developing cancer in Canada is 44.3%. Men face a 44% conditional probability at age 60, a rate that persists into older age. In real terms, nearly half of Canadians will develop cancer during their lifetime, according to the Canadian Cancer Society.

Canada’s public health-care system covers hospital‑based treatments such as chemotherapy and radiation. But the total average lifetime personal cost burden averages $33,000 per cancer patient, nationally. That’s driven by noncovered drugs, travel, parking, meals, accommodations, lost income, caregiver time and private support services. Peak years of treatment can easily cost $10,000–$25,000 out of pocket, depending on therapy type and proximity to treatment centres.

For high‑net‑worth households, these numbers may not be catastrophic. But for long retirements, they represent an unplanned drain on liquid capital, especially when multiple health events stack up.

Cardiovascular disease — a massive burden

Cardiovascular disease is Canada’s second leading cause of death, responsible for 17.7% of all deaths in 2023. The burden is massive. According to a 2026 report from the Heart and Stroke Foundation of Canada, approximately six million Canadians are living with heart disease or stroke.

Many medical services are publicly insured, but households still face ongoing expenses for medications not fully covered, travel to specialist care, cardiac‑friendly nutrition and rehabilitation add‑ons and equipment.

The Canada Revenue Agency has an eligible medical expense guide for patients and their caregivers.

For those who need assisted living or LTC due to cardiofrailty, current Ontario LTC co‑payment rates (effective July 1, 2025) are $2,085 per month (basic), $2,514 per month (semi‑private, newer bed) and $2,979 per month (private, newer bed). Similar subsidized structures exist across the provinces.

Late‑life care trajectory with cardio‑metabolic disease often converges with functional decline after age 85, increasing the likelihood of home care, assisted living or LTC needs.

Dementia — expensive and under-planned

Unlike cancer, dementia typically unfolds slowly, lasts many years and demands progressively intensive care. It is the single most financially destructive health condition later in life.

Dementia prevalence in Canada doubles every five years after age 65, according to the Canadian Institute for Health Information. By age 85, one in three Canadians suffers from some form of dementia (Alzheimer’s being the most common). In LTC, 75% of residents exhibit moderate to severe cognitive impairment.

With the population aged 85-plus set to surge sharply, exposure to dementia risk is rising every year.

Dementia typically requires escalating support:

• Home care (early to mid-stages): In Ontario, private personal support/home care is $25–$45 per hour; nursing is $50–$85 per hour. The numbers are similar in other provinces.
• Assisted living/retirement with memory care: Private‑pay often ranges from the mid‑$3,000s to well above $6,000 per month, depending on province, suite type and care package.
• Late-stage publicly funded LTC: The Ontario benchmark as of July 1, 2025 is $2,085 per month (basic) to $2,979 per month (private) co‑pay. Low‑income rate‑reduction programs apply to basic accommodation.

In the early to mid-stages — 18 months of private home care, averaging four hours per day at $35 an hour means about $76,000 (overnight and holidays cost more per hour). A potential three- to five-year moderate to late‑stage LTC stay at Ontario’s private room rate of $2,979 per month is  $107,000 to $178,740 before incidentals.

We managed to get my mom into a memory suite at a retirement home after she was diagnosed with rapid onset dementia. It cost $9,600 per month.

Model multi‑year care episodes (five to eight or more years) with step‑up costs from home supports to facility‑based care. Also consider caregiver respite, travel and non‑drug therapies within the cash‑flow plan.

Integrating health risk and longevity risk

Across all three scenarios — cancer, dementia and cardiovascular disease — three patterns are clear: longevity significantly increases the probability of major illnesses; major health events carry substantial out‑of‑pocket cost exposure; and care inflation is structurally higher than the general inflation rate.

Labour‑intensive services — home care, assisted living, LTC — face chronic labour shortages and rising wages, outpacing traditional inflation assumptions.

For wealth professionals, longevity risk must now be reframed as health‑event risk multiplied over an extended lifespan. Traditional retirement models that ended projections at age 90 are increasingly inadequate for clients with even average health profiles.

The new standard for wealth resilience requires:

• Planning horizons to age 95–100.
• Dedicated reserves for multi‑year care scenarios.
• Health‑adjusted inflation assumptions.
• Liquidity planning for rapid transitions into home care, assisted living or LTC.
• Stress‑testing portfolios against health shocks.

Longevity is arguably the great advance of our era, But without integrating these health-event scenarios into wealth planning, it may also be the most underestimated financial threat of our time.