Canadians need more money to retire, while a minority say they are unlikely to reach that target
Canadians now say they need $1.7m to retire comfortably, but more than one-third do not think they will reach that goal, according to BMO's Annual Retirement Survey.
The survey finds that on average, Canadians believe they need $1.7m to retire comfortably, up from $1.54m last year, while 36 percent say they are unlikely to reach that target, up from 29 percent a year earlier.
Terri Szego, senior portfolio manager and senior wealth advisor at BMO Nesbitt Burns, said setting savings goals is important, but “turning those goals into reality is where the real work begins.”
She said her team helps clients “refine their objectives and build clear, actionable plans,” using tools to show what it takes to reach long-term goals and breaking “big numbers” into smaller steps.
The amount Canadians believe they need for retirement increased by $160,000 year-over-year to $1,706,000 in 2025.
Previous survey results show targets of:
|
Year |
Target amount |
|---|---|
|
2024 |
$1,541,000 |
|
2023 |
$1,671,000 |
|
2022 |
$1,743,000 |
|
2021 |
$1,638,000 |
|
2020 |
$1,437,000 |
|
2019 |
$1,349,000 |
Targets also differ by region:
|
Region |
Target amount |
|---|---|
|
B.C. |
$2,201,000 |
|
Ontario |
$1,923,000 |
|
Alberta |
$1,658,000 |
|
Saskatchewan & Manitoba |
$1,278,000 |
|
Quebec |
$1,237,000 |
|
Atlantic Provinces |
$928,000 |
The survey reports what Canadians are setting aside for retirement as a share of income and in dollars.
In percentage terms, 28 percent save less than 5 percent of income, 38 percent save 5 percent–10 percent and 21 percent save more than 10 percent.
In monthly dollar terms, 10 percent save less than $100, 23 percent save $100–$499, 10 percent save $500–$999 and 12 percent save over $1,000.
Margaret Leong, senior investment counsellor and portfolio manager at BMO Private Wealth, said deciding how much to save for retirement is personal, but “thinking in percentage terms can help with long term planning,” and that for someone in their 20s, “contributing 10 per cent a month to an RRSP can be a great start.”
She added that as earnings rise in a person’s prime working years, “so should their savings,” so they can benefit from compound growth, and that “every extra dollar saved” brings people closer to retirement.
Some respondents say they do not plan to retire at all.
Of those who are not retired, 14 percent say they do not plan to stop working.
While many of the Boomers surveyed indicate they are already retired, 27 percent of those who have not retired say they do not plan to stop working.
The survey also finds that 20 percent of Gen X, 18 percent of Millennials and 15 percent of Gen Z say they do not plan to retire.
Catherine Laurin, senior portfolio manager at BMO Nesbitt Burns, said an “increasing number of people say they plan to never retire,” which often means they do not plan to stop working entirely.
She said many now see retirement as including “part-time work, freelancing, or passion projects,” and she works with clients to factor this income into their plans, including its impact on taxes and government benefits.
The survey also examines how investors view financial advice.
Nearly nine in ten (89 percent) investors say their advisor helps them meet their financial goals, with 44 percent agreeing strongly.
Respondents point to sound strategies and advice, customized plans and strong personal relationships as the main reasons they value their advisor.
