If you are young and only recently entered the working life, saving for your retirement might be the last thing on your mind. But the longer you work and the closer to retirement you get, the more the thoughts of retirement will crop up.
As will the question: do I have enough money to retire comfortably?
In this article, you will find statistics on how much money Canadians need to retire comfortably, saving in different age groups, as well as many other statistics on retirement savings in Canada.
Retirement Savings Statistics for Canadians
- Canadians receive a combined OAS/CPP pension income of $15,159 per year on average.
- In 2019, 5-9 million Canadians received CPP payments.
- 69% of Canadians use RRSP accounts to save for their retirement.
- RRSP accounts become taxable when you turn 71.
- Canadians should save between $700,000 and $1 million for their retirement.
- In 2019, there were over 6.4 million registered pension plans, nearly 3.4 million public sector pension plans, and nearly three million private sector retirement plans in Canada.
- The average retirement age in Canada is 63.5.
- You will need about 80%, as a minimum, of your current spending to maintain your current lifestyle once retired.
- Almost a third of Canadians have not saved or thought about retirement.
- People living alone find saving for retirement harder than the average.
- 62% of Canadians under 35 are saving for their retirement, but only one fifth think they are on the right path to meet their goals.
- Only 12% of Generation X Canadians feel confident they will achieve their retirement saving goals.
What is the average combined OAS/CPP income in Canada?
Retirees in Canada will receive monthly payments under the Old Age Security (OAS), a government-funded program benefiting Canadians over 65. This is a non-contributory program and the payments depend on how long you have lived in the country after your 18th birthday.
The second part of benefits for people who retire in Canada comes from the Guaranteed Income Supplement (GIS) program. Like the OAS, GIS does not require contributions from the individual either. It provides monthly non-taxable benefits to anyone receiving an OAS pension with a low income.
Canadian retirees also receive a public retirement income from the Canada Pension Plan (CPP). You can start receiving this basic level of lifelong income from the age of sixty as long as you have contributed to the system while you were working. The size of your contribution depends on your income and will determine the size of your pension when you retire.
The maximum you can receive from combined OAS and CPP is $20,770. However, most Canadian retirees will not qualify for the top payment. The average is $15,159 per year.
The most anyone can receive in CPP payments per month is $1,154. The average CPP payments from CPP are $723.89 per month. That is 37% less than the maximum. The average payment is below the livable income in Canada, which means it is important to make personal arrangements for additional pension income.
Anyone interested in working out their retirement income can use the Canadian Retirement Income Calculator.
How many Canadians receive a CPP income?
In 2019, there were approximately 5.9 million Canadians collecting CPP, which was 100,000 higher than in the previous year. The total amount of CPP benefits increased from $34.6 billion to $46.5 billion.
How many Canadians have RRSP accounts?
69% of Canadians had a Registered Retirement Savings Plan (RRSP) account in 2019. The average amount saved was $111,922, which was around $10,000 more than in 2018. Canadians can start paying into a RRSP as soon as they begin to work.
In 2020, the contribution limit for RRSP was 18% of the earned income as reported in the 2019 tax return or $27,230, depending on which was lower.
The average annual return from RRSP can vary. When the market was down by 10-20%, the average annual return was about 19%. However, during healthier market years, the average return was only 11%.
Anyone with an RRSP account should note that you can make contributions to your RRSP until you turn 71 and the account becomes taxable. It becomes taxable regardless of whether you are earning an income during your retirement. When you turn 71, you can transfer money from your RRSP into a Registered Retirement Income Fund (RRIF).
How much should Canadians save for their retirement?
The opinion on how much you should save for your environment varies. The average amount is around $700,000. However, some financial advisors would say $1 million is needed to retire comfortably in Canada. Of course, the amount you will need depends on where in Canada you plan to retire.
To ensure you can maintain your current lifestyle after you have retired, you will need up to 80% of your current spending according to retirement advisors. When calculating how much you will need, you need to consider all fixed costs as well as other expenses. 59% of Canadians cannot estimate how much they would need to retire comfortably, while 50% hope they will have cleared all their household debt by the time they retire.
A way to calculate how much you need is to take 70% of your salary and multiply it by 25. The 25 represents living for 25 years after retirement. Using this formula, a person on a $60,000 yearly salary will need to save $1.05 million (70% of $60,000 is $42,000, that multiplied by 25 equals $1.05 million).
Distribution of RRSP across provinces and territories in Canada
In 2019, there were over 6.4 million registered pension plans in Canada, according to Statistics Canada. Ontario, with the largest population had the highest number of RRSP accounts with 2,473,780 accounts. Ontario also has the highest number of public and private sector pension plans, with 1,168,988 out of the nearly 3.4 million public sector pension plans in Canada in 2019 and 1,304,792 of the nearly three million private sector plans.
The number of RRSP accounts, public sector and private sector pension plans in the other provinces and territories were:
Province / Territory
Public Sector Pension
Private Sector Pension
Newfoundland and Labrador
Prince Edward Island
What is the common age to retire in Canada?
The average retirement age in Canada is 63 and ½ years. People working for the federal government retire at a younger age, with the average being 61 years, while those in the private sector retire at 65. Self-employed people are the most likely to retire later, with an average retirement age of 68. The average age Canadians plan to retire at is 62-64.
While the average retirement age is 63.5, the standard age to start collecting a pension is 65. You can start collecting after you turn 60. However, the earlier you start, the smaller the monthly income will be.
Most Canadians fail to consider the lifestyle they want when they retire
90% of Canadians do not consider the lifestyle factor when thinking about their retirement. It is important to be realistic and accurate with lifestyle expectations in retirement, as it may require you to make additional savings.
Almost a third of Canadians have not saved for retirement
Retirement statistics for Canada show that 30% of Canadians haven’t either thought about retirement yet, or haven’t been able to save for it yet. In 2018, the average amount Canadians had in retirement savings was around $184,000. 19% had saved less than $50,000.
Worryingly, in the age group 45-64, 32% of survey respondents had put nothing aside for their retirement. The average retirement savings for the age group were $345,000. Almost half (49%) had saved around $250,000 for their retirement. Within the age group, women over 55 were more likely than average to have no retirement plan at 43%. Women who had planned for retirement had saved on average 25% less than men.
53% of Canadians are not sure if they are saving enough, while 60% worry they will outlive their retirement savings. 63% of the people saving for their retirement worried about the impact of raising living costs on their retirement fund. 41% said they were concerned if they would have enough for necessities and 39% had concerns over the rising costs of healthcare.
People living alone find it harder than average to save for retirement
46% of people living alone say they are struggling to save for retirement because of the amount of money needed to cover daily expenses. In addition, 39% of Canadians who plan to live on their own after they have retired feel they are at a disadvantage compared to couples.
Millennial retirement saving
The average retirement goal among millennials is $704,000 and they expect to retire at 62. Only one in five millennials feels they will reach their retirement goals. A study from 2020 found that 62% of millennial Canadians are already saving for their retirement. When planning for their post-work life, millennials are more likely to prioritise having the money to travel and being social rather than thinking about potential health issues.
When saving for their retirement, 48% of millennials would choose a tax-free savings account rather than an RRSP account.
Generation X retirement saving
People from Generation X are less optimistic than the millennials about reaching their retirement goals. Only 12% of Generation X Canadians are confident that they will achieve their target savings.
On average, people in this age group think they will need around $768,000 to achieve their desired lifestyle when they retire. The plan for the majority of generation Xers is to retire at 64.
Boomers retirement saving
Canadians in this generation expect to need around $572,000 to retire comfortably and 25% think they are on track with their retirement savings. Their expectation of what they need for a comfortable lifestyle is significantly lower than in other age groups.
This may be because their plans involve less traveling and socialising and they are more likely to prioritise health expenses. The average age boomers plan to retire is 66.
Almost six in ten Canadians worry about losing their financial independence
59% of Canadians are concerned they will lose their financial independence when they retire, while 53% of them worry they will have to continue working to some extent after retirement age. Men are more likely to feel optimistic about their financial futures with 62% of men saying they are optimistic compared to 48% of women.
6% of Canadians have no plan to retire at all for various reasons, including lack of savings.
While all Canadians will receive OAS and CPP payments when they retire, this income alone is not enough to provide a comfortable lifestyle. How much you need to have saved for your retirement depends on your plans, including where you will be living.
On average, Canadians should save between $700,000 and $1 million for their retirement. There are worryingly many Canadians who have not saved at all for their retirement and many of those who have, haven’t saved enough. Many Canadians worry about how the rising cost of living will affect their retirement fund.
Frequently Asked Questions
The experts recommend that you have between $700,000 and $1 million put aside for your retirement. However, you might need less or more depending on which part of Canada you plan to retire in.
There are different ways to save, including tax-free savings accounts, RRSP accounts, and private and public sector pension plans.
You can work out how much you need to maintain your current lifestyle by calculating 70% of your yearly salary and multiplying it by 25.