The hard part of retirement isn't saving. It's spending.
In late July 2026, EY Canada published a short brief with an unglamorous title, "Canada's retirement evolution." Buried in it is a claim that deserves more attention than it will get. The country's aging population, EY argues, is forcing a rethink of retirement itself, and banks and policymakers will have to build flexible, transparent ways to turn a lifetime of savings into a lifetime of income. Put in plainer terms: the hard part of retirement is no longer getting money in. It is getting money out.
That distinction sounds like a technicality, but it is the whole game.
The arithmetic EY is responding to is worth examining. Canadians aged 65 and over now make up roughly one in five of the population, a share heading toward 21 to 23 per cent by 2030, according to Statistics Canada and World Bank figures. Baby boomers control close to half the nation's wealth, and most of it is not sitting in a diversified portfolio. It is a house. The net worth of Canadians nearing retirement nearly doubled between 1999 and 2023, and the bulk of that gain is bricks and a lawn, not something you can spend a slice of on a Tuesday. CPA Canada estimates about a trillion dollars will pass from boomers to their heirs by 2026. And nearly three in ten Canadians retiring this year or last still expect to be carrying a mortgage into retirement, a figure that has roughly doubled in a decade.
The part that gets glossed over is that Canada solved the accumulation problem a generation ago. For the most part. The state pension plan, Canada Pension Plan (CPP), is funded and professionally managed. Workplace plans shifted to defined contribution. Tax-advantaged accounts (e.g. Registered Retirement Savings Plans -- RRSPs, Tax-Free Savings Accounts -- TFSAs) gave savers a low-cost, tax-sheltered place to compound their retirement savings. The plumbing for getting money in works. The plumbing for getting money out barely exists. The average new CPP retiree collected about $925 a month in January 2026; the maximum at 65 is $1,507.65, and fewer than one in twenty people qualify for it. Add the average Old Age Security payment and the typical retiree draws around $1,677 a month against a combined maximum near $2,259. That is a floor. It is not a plan. The plan is the part where a 71-year-old has to decide how fast to spend, when to claim, whether to touch the house, and how to insure against the risk of living to 95. Nobody has built a default for that.
Which is what makes the European comparison so revealing. Europe is fighting, loudly and expensively, the battle Canada mostly won thirty years ago.
In March 2026, the German Bundestag passed a Pension Reform Act that replaces the discredited Riester system with the Altersvorsorgedepot, a capital-market retirement account due to launch on 1 January 2027. For the first time, German savers will be able to put state-subsidized contributions directly into equities and exchange-traded funds without wrapping them in an insurance product. The same law introduces the Frühstart-Rente, a plan to pay ten euros a month into an investment account for every child from age six, phased in from 2027. In 2027, Germany will finally let ordinary people do what Canadian and Swedish savers have done for years: own equities inside a subsidized retirement account. The reform is enacted, not merely proposed, and it is genuinely significant. It is also a country arriving, in 2027, at a starting line Canada crossed in the 1990s.
The Netherlands is running the same race from the opposite end. Its Future Pensions Act took effect in July 2023, and on 1 January 2026 roughly 9.5 million workers moved into the new framework, with every fund required to convert by 1 January 2028. The Dutch are dismantling what was widely considered the best defined-benefit system in the world and rebuilding it as collective defined contribution, where the eventual pension rises and falls with investment results rather than the promise of the state pension authority. This is a country deliberately moving toward the risk-bearing model Canada already runs, and doing it carefully, because the transition itself is the danger.
France went the other way entirely. In its 2026 social security budget, the National Assembly suspended the 2023 reform that would have lifted the retirement age from 62 to 64, freezing it until at least 2028. France is not reforming how people save at all; it is retreating from asking them to work longer inside a pay-as-you-go system that the demographics no longer support. The reform is only suspended, which tells you the fight has been postponed rather than settled.
Austria shows the same strain from a different angle, and its numbers make the point most cleanly. The Austrian public pension is among the most generous in Europe and among the most exposed. Public pension spending ran at 13.7 per cent of GDP in 2022 and is on track for 15 per cent by 2030, according to the OECD, as the retiree count climbs from about 2.5 million today toward 3.25 million by 2045. From January 2026, Austria began nudging its early-retirement age up from 62 to 63 and raising the required contribution years from 40 to 42, with a partial pension and a sustainability mechanism under debate. But the telling figure sits behind the state pillar. Austrian pension fund assets amount to roughly 6 to 7 per cent of GDP. In Sweden the comparable number is above 100 per cent, in Denmark above 200. That gap is the story of European retirement in a single statistic. A few countries built the funded machine decades ago. Most are still deciding whether to.
And then there is the European Union's own answer, the Pan-European Personal Pension Product. Launched in 2022 as a portable, low-cost personal pension anyone could carry across borders, it has, by the regulator's own account, gone almost nowhere. EIOPA's September 2024 staff paper found the product available in just three member states, Croatia, the Czech Republic and Slovakia, and noted that 76 per cent of Europeans have never heard of it. Fragmented national tax rules quietly strangled the cross-border promise. A good idea, defeated by the thing pensions always turn on: tax.
It would be unfair to say Europe hasn't figured out funded saving. Parts of it figured it out before Canada did. Sweden's premium pension routes 2.5 per cent of income into funds with a well-designed default, and more than 90 per cent of new entrants happily stay in it. Denmark's ATP is statutory, fully funded, and covers nearly every worker in the country. The Nordic model is exactly the low-cost, automatic, defaulted machine the rest of Europe is now legislating toward. So the full picture is not a simple race between a lagging Europe and a leading Canada. Both continents, and every developed economy, are converging on the same funded, individual-account design for getting money in.
The question worth sitting with is which problem is actually harder. Accumulation has known answers. Enroll people by default. Keep costs low. Add a tax incentive. Give it time. Every reform above is a variation on that settled theme. But, decumulation, getting money out efficiently in retirement, still has no settled answers. There is no default that tells a retiree how to spend a portfolio and monetize a paid-off house across an unknown number of years, through markets that don't cooperate and a body that ages unevenly. Europe is racing to solve the problem Canada solved. Canada has walked past that finish line and straight into the problem Europe has not yet reached: what happens after the saving is done.
For anyone running a wealth business, that is where the opening sits, and it differs by market. In Germany and the Netherlands, the near-term prize is on the accumulation side. Millions of savers are about to hold investment risk they have never held before, at the exact moment a system switches under them. They will need product built for people who were never equity investors, and advice at the point of transition, when a default choice made badly follows someone for forty years. In Canada, the prize is decumulation, and it is the harder, more advice-intensive business by far. Firms have spent three decades competing to gather assets. The next three decades will reward the ones who can reliably turn assets, including the equity locked in a home, into income a client does not outlive. Most wealth firms are not built for that. They are built to accumulate.
The coming wealth transfer is usually told as an inheritance story. It is really a decumulation story with a deadline attached. The boomer generation is about to spend down, pass on, or mismanage the largest pool of private wealth either continent has ever produced, and the industry that serves them is optimized for the half of the problem that is already solved. EY is pointing at the other half. Whoever answers it first, in Toronto or Frankfurt or Amsterdam, will define what this business looks like for the next generation.
If you are working through the decumulation question inside a firm, in Canada or Europe, it is the kind of problem I help wealth management leaders think through.
Sources
● EY Canada, "Canada's retirement evolution" (published late July 2026): https://www.ey.com/en_ca/insights/financial-services/canadas-retirement-evolution
● Statistics Canada / World Bank, share of population aged 65+ (2026, ~20%): https://tradingeconomics.com/canada/population-ages-65-and-above-percent-of-total-wb-data.html
● CPA Canada estimate, ~$1 trillion boomer wealth transfer by 2026 (as reported): https://money.ca/managing-money/retirement/canada-boomers-retirement-savings-adult-children-costs
● Near-retirees still carrying a mortgage (~29%): https://money.ca/managing-money/retirement/oas-cpp-payments-q3-2026-retirees-savings-gap
● CPP 2026 average vs maximum benefit: https://lifemoney.ca/blog/canada-pension-plan-explained-2026
● Germany Pension Reform Act, Altersvorsorgedepot and Frühstart-Rente (Bundestag approved 27 March 2026; launch 1 Jan 2027): https://actuview.com/news/11680 and https://www.newsworm.de/news/what-is-germanys-early-start-pension
● Netherlands Future Pensions Act (Wet toekomst pensioenen), ~9.5M workers moved 1 Jan 2026, deadline 1 Jan 2028: https://leglobal.law/2026/02/02/netherlands-transition-to-a-new-pension-system-future-pensions-act/ and https://www.dnb.nl/en/current-economic-issues/pensions/our-new-pension-system/
● France 2026 budget suspends 2023 pension-age reform until 2028: https://www.france24.com/en/live-news/20251216-french-lawmakers-adopt-social-security-budget-suspend-macron-s-flagship-pension-reform
● Austria pension spending 13.7% of GDP (2022) rising to 15% by 2030 (OECD): https://www.europeanpensions.net/ep/Austria-pension-expenditure-to-rise-by-around-1.3pc-by-2030.php
● Austria 2026 reform, corridor early-retirement age 62 to 63, contribution years 40 to 42: https://www.theinternational.at/government-plans-pension-reform-63-is-new-early-retirement-age/
● Austria second-pillar pension assets ~6-7% of GDP vs Sweden 100%+, Denmark 200%+: https://viennabriefing.substack.com/p/austria-government-pension-reform-vorsorgekasse-provision-fund
● EIOPA Staff Paper on the future of PEPP (Sept 2024); limited uptake, 76% unaware, available in 3 states: https://www.eiopa.europa.eu/publications/eiopa-staff-paper-future-pan-european-pension-product-pepp_en
● Sweden premium pension (2.5%, AP7 default, 90%+ stay default): https://www.ftn.se/english/en/the-swedish-premium-pension-system.html
● Denmark ATP (statutory, fully funded, near-universal): https://www.oresunddirekt.se/en/working-in-denmark/pensions/atp-arbejdsmarkedets-tillaegspension-in-denmark/
