37 Canadian Retirement Savings Statistics to Keep You Warm

Canadian retirement savings statistics show that the younger you are, the less you worry about meeting your expenses in the years down the road. Yet, the best moment to start planning is always now.

Without timely forethought and some useful retirement tips, Canada can be an expensive place to spend your golden years. That’s why many are considering working longer. 

That being said:

If you start preparing early, you won’t need to go out of your way to ensure a comfortable lifestyle as a retiree.

The thing is:

Due to more pressing financial emergencies, retirement planning took the backseat for many in 2020. Canadians can already see the possible consequences in their retirement funds. 

But there’s good news: 

The best time to contribute to the pension plans is when the market is down. 

The average Canadian retirement savings by age reveal that those currently saving for retirement the most are aged between 35 and 55. 

Curious to find out more? Just keep reading.

Astonishing Canadian Retirement Savings Statistics (Editor’s Choice)

  • 5.8 million Canadians collected CPP in 2018.
  • You need around $1 million to retire comfortably in Canada.
  • 69% of Canadians had an RRSP account in 2019.
  • Canadians retire at 63 and a half on average.
  • You need roughly 80% of your current spendings in retirement.
  • 58% of Canadians say they will rely on the government pension programs for their retirement income. 
  • 90% of Canadians don’t consider enough the lifestyle they want in retirement.
  • 32% of Canadians aged 45 to 64 say they have no retirement savings.
  • 43% of women over 55 don’t have a retirement plan.
  • 48% of Millennials would choose TFSA over RRSP.

Retirement Statistics for Canada: An Overview

1. The average combined OAS/CPP income is only $15,159 a year.

(Source: Investopedia, Totrov, Advisor Savvy)

When you reach the age for retirement in Canada, you can rely on the three main pillars of the retirement income system.

Here’s the deal:

The first one, Old Age Security (OAS), is a government-funded program that benefits Canadians over 65. You don’t contribute directly to it. Instead, you receive monthly payments, whose size depends on how long you have lived in the country after the age of 18. The Guaranteed Income Supplement (GIS) program also doesn’t require a contribution. It provides monthly non-taxable benefits to OAS pension recipients who have a low income.

The second level of public retirement income is the Canada Pension Plan (CPP), or if you are in Quebec — the Quebec Pension Plan (QPP). This is a basic level of lifelong income that you can start as early as 60, provided you have contributed to the system during your work years. The amount you contribute varies depending on your income and determines your pension’s size once you retire. 

The most you can receive annually from OAS and CPP combined is $20,770, but many won't qualify for the maximum. The average amount is around $15,159 a year. Click To Tweet

Now:

If you want to estimate your retirement income, you can use the Canadian Retirement Income Calculator. Additionally, you can seek expert advice from the Canada Retirement Information Centre.

2. The most you can receive from CPP is $1,154 a month.

(Source: Advisor Savvy)

The average Canadian retirement income coming from CPP alone is $8,303 a year. It means that in 2019, you would have had $723.89 a month –  37% less than those eligible for the highest amount.

Since this is below livable income, it becomes clear one must look for the best retirement investments Canada has to offer. This is where the third pillar, the Registered Retirement Savings Plan (RRSP), comes in as an option for supplementing your income.

3. Canadians need to set away $1 million for retirement.

(Source: Newswire, Money Sense) 

The general opinion about what’s enough for an average pension in Canada seems to be around $700,000. Yet, the views of financial advisors differ, leaning towards $1 million as a safe sum.

There are several things you should consider while preparing for retirement in Canada:

  • Choose the right time to start taking the CPP benefits. 
  • Don’t expect CPP will be enough.
  • Save in RRSPs.
  • Invest in classic savings or real estate.
  • Decide where you will retire and what lifestyle you want.
  • Withdraw money early from your RRSP to minimize the effect on OAS.

canadian retirement savings statistics

4. Around 5.9 million Canadians collected CPP in 2019.

(Source: Government of Canada)

This is 100,000 higher than the previous year. The total amount of CPP benefits also rose from  $34.6 billion to $46.5 billion.

5. 69% of Canadians had an RRSP account in 2019.

(Source: Newswire)

Canadian retirement savings statistics further show the average amount held in RRSP accounts was $111,922. This represented an increase from 2018 when that sum was $10,000 lower.

The good news is:

You can start contributing to your RRSP as soon as you begin earning income. Unlike Tax-Free Savings Accounts (TFSAs), used to save for anything, RRSPs are specifically for retirement funds.

6. The RRSP contribution limit in 2020 was 18% of the earned income.

(Source: TD Bank Group, Money Sense)

The RRSP contribution limit in 2020 was 18% of the earned income reported on your 2019 tax return or $27,230, whichever of the two is lower. 

RRSPs are tax-deductible, but that doesn’t mean that tax will not wait for you down the road. You might think that all the money in your RRSP belongs to you only to realize that instead of a million, you have around $700,000. That’s why financial experts advise using your tax returns to fund next year’s contribution instead of spending it.

7. The average RRSP return rate is around 19%.

(Source: Money Sense, Money Sense, TD Bank Group)

When the market was down by 10% or 20%, the average annual RRSP return was about 19%. While during the healthy market years, the annual return rate was only 11% on average.

That’s why advisors say you should make an effort to invest in your RRSP when the market is low. Some even recommend taking out a loan to put into your RRSP as the investment will pay off in the long term.

What’s more:

Many wonder if they need an RRSP, and the answer is no, not all people do. 

In fact, some find TFSAs to work better for them. When choosing between the two options, you need to take many factors into account. Depending on your financial literacy, you might want to consult an advisor.

8. When you turn 71, your RRSP becomes taxable.

(Source: CPA Canada)

You can continue making contributions to your RRSP until you are 71, regardless of whether you earn an income during your retirement. The contribution room determines the limit. 

You can do this until you’re 71, when the amount in your RRSP becomes taxable. Then, you can transfer the sum into an RRIF (Registered Retirement Income Fund) or use it for an annuity.

9. Ten pension funds made it to the top 100 global private equity investors in 2017.

(Source: Benefits Canada)

The Canada Pension Plan Investment Board ranked first, with $44.4 billion of allocation to private equity. The Ontario Teachers’ Pension Plan was sixth in the chart, with $21 billion. Caisse de dépôt et placement du Québec was seventh, with $20 billion.

10. Ontario had the highest total of registered pension plans in 2019.

(Source: Statistics Canada)

Canada recorded a total of just over 6.4 million registered pension plans in 2019. Click To Tweet

Let’s have a look at the numbers by province and territory:

  • Ontario 2,473,780
  • Quebec 1,577,919
  • British Columbia 722,530
  • Alberta 652,614
  • Saskatchewan 228,604
  • Manitoba 282,203
  • Nova Scotia 172,924
  • New Brunswick 138,785
  • Newfoundland and Labrador 102,241
  • Prince Edward Island 22,254
  • Northwest Territories 11,951
  • Outside Canada 9,332
  • Nunavut 7,863
  • Yukon 7,394

11. There were nearly 3.4 million public-sector pension plans in 2019.

(Source: Statistics Canada)

Public-sector pension plans in 2019 by province:

  • Ontario 1,168,988
  • Quebec 903,745
  • British Columbia 422,074
  • Alberta 314,665
  • Manitoba 154,609
  • Saskatchewan 139,786
  • Nova Scotia 103,982
  • New Brunswick, 83,381
  • Newfoundland and Labrador 61,050
  • Prince Edward Island 15,618
  • Northwest Territories 8,285
  • Yukon 5,823
  • Nunavut 5,207
  • Outside Canada 3,318

12. There were over three million private-sector pension plans in Canada in 2019.

(Source: Statistics Canada)

That’s how the picture looks by province:

  • Ontario 1,304,792
  • Quebec 674,174
  • Alberta 337,949
  • British Columbia 300,456
  • Manitoba 127,594
  • Saskatchewan 88,818
  • Nova Scotia 68,942
  • New Brunswick 55,404
  • Newfoundland and Labrador 41,191
  • Prince Edward Island 6,636
  • Northwest Territories 3,666
  • Nunavut 2,656
  • Yukon 1,571
  • Outside Canada 6,014

Retirement in Canada – Age and Demographics Stats

13. The average Canadian retirement age is 63 and a half.

(Source: Wealth Simple, Newswire, Newswire)

The expected and the actual retirement age are both rising at a steady pace.

Here’s the scoop:

Canadian federal employees usually retire around 61, while people in the private sector do so at 65. The average age of retirement in Canada for self-employed individuals is 68.

The average age a Canadian plans to retire varies even when coming from 62 to 64.

14. The standard age to start collecting your pension is 65.

(Source: Government of Canada)

When you choose to start collecting your pension and from which fund, is a decision that affects the sum you’ll be receiving. While this can happen anytime between your 60 and 70, your monthly income will be smaller the earlier you start. The most common time is around 65.

15. You’ll need up to 80% of your current spendings in retirement.

(Source: Newswire, Newswire)

Retirement advisors say you need to expect to be spending 70% to 80% of your current budget when you retire. That might be hard to gauge if you’re not in the habit of keeping an account. When planning for retirement, you’ll need to consider all your fixed costs and other expenses. 

Average retirement income statistics reveal that up to 59% of Canadians can’t give an estimate on how much they need to retire comfortably. Some 50% hope they’ll be free of household debt and have enough when they stop working.

16. Half of Canadians have not visited a retirement advisor in a year.

(Source: Newswire)

Some 39% of the survey respondents don’t think they have enough money for a professional advisor to be interested in helping them. 

Also, around 65% of Canadians think their retirement fund needs to be under $1 million – the threshold financial professionals suggest for a safe and secure retirement.

17. 58% of Canadians believe their retirement income will come from the government pension program.

(Source: Newswire)

When it comes to other retirement income sources, 47% of Canadians count on RRSP savings, 37% on non-RRSP savings (TFSA and similar), and 34% on employer-sponsored pension plans.

Next:

18. Up to 43% of Canadians rely on cash saved for retirement.

(Source: Benefits Canada)

The Canadian retirement planning survey shows that the 55-75 age group uses various ways to save for their retirement: 

  • 45% of Canadians in this age group have a registered retirement savings plan
  • 43% rely on cash savings
  • 39% have tax-free savings accounts
  • 12% use annuities or plan to do so

19. The vast majority of Canadians don’t consider the lifestyle they want to have after they retire.

(Source: Benefits Canada)

Canadian retirement savings statistics reveal that 90% of Canadians overlook the importance of setting post-retirement lifestyle goals. Accurate and realistic expectations help in the planning process, as future spending requires additional savings today.

The report also shows that 45% of those who have considered their desired post-retirement lifestyle are not confident in achieving it.

20. Over 60% of Canadians worry they will outlive their retirement savings.

(Source: Benefits Canada)

Living longer than there’s money in your savings account is a concern for many Canadians. A separate survey focused on solo retirees suggests that 47% of single, widowed, divorced, separated or never married respondents are worried they will outlive their retirement savings. 

They pointed out the following concerns: 

  • Increasing daily living expenses (63%)
  • Not having enough for necessities (41%) 
  • Rising costs of health-care for (39%)

22. Almost half of Canadians living alone struggle to save for retirement.

(Source: Benefits Canada)

Covering current daily expenses alone prevents 47% of respondents from saving for retirement. The Canadian retirement planning stats further show that around 39% of people who plan to live on their own post-retirement feel at a disadvantage compared to couples. 

23. Around 32% of Canadians aged 45 to 64 say they have no retirement savings.

(Source: Benefits Canada)

The sum of the average Canadian retirement savings in 2018 was roughly around $184,000.

Some 19% of respondents had less than $50,000, and 30% had no retirement savings.

In the age group approaching retirement (45-64), 32% had nothing put aside. This cohort’s average savings were $345,000, while 49% had less than $250,000 in their accounts.

24. Up to 43% of women over 55 don’t have a retirement plan.

(Source: Benefits Canada, Newswire)

And those women who have a plan in place saved 25% less than the men preparing for retirement.

Average retirement income statistics for Canada indicate that women think they need less money to retire than men. Click To Tweet

Whereas men believe they would need $1.4 million, women consider $1.2 as an optimal amount.

25. One in five Millennials feel they are on the path to reaching their retirement goals.

(Source: Newswire)

The average Millennial has their retirement goals set at $704,000. The group, aged 18 to 34, expects to retire at about 62

The 2020 study also found that around 62% of Canadians under 35 are already saving for their post-work life. Unlike the older generations, Millennials prioritize travel and social activities rather than potential health issues.

26. Around 48% of Millennials would choose TFSA over RRSP.

(Source: Benefits Canada)

Examining the average Canadian retirement savings by age, the Royal Bank of Canada found that almost half of Millennials would choose a tax-free savings account over an RRSP.

27.Only 12% of Generation X is confident they’ll achieve their retirement goals.

(Source: Newswire)

Some 74% of those between 35 and 55 are saving for retirement. This age group expects they will need around $768,000 on average to have the lifestyle they want in retirement. They plan to stop working at approximately 64.

The cohort’s desired post-retirement lifestyle also includes travelling. Yet, less than 12% are confident they are on the path to achieving those goals.

28. One in four Boomers think they’re on track with their retirement plans.

(Source: Newswire)

Baby Boomers expect to need around $572,000 to retire comfortably. 

It’s unclear whether this age group has lower expectations regarding how they want to spend their retirement or lack the financial knowledge and understanding of how time and inflation will affect their funds. 

 Some 64% of Canadians in this age group are currently saving for retirement. Baby Boomers prioritize health and health-related finances over lifestyle or travel. On average, they plan to retire at 66.

29. 39% of Canadians will postpone retirement to help their children buy a home.

(Source: Advisor)

Having children can increase the later retirement chances, as almost half of the parents with children under 18 plan to postpone their retirement to support their youngsters financially. 

What’s more:

Up to 48% of parents plan to help their kids buy a home, a 5% increase from 2017 when the figure stood at 43%. Additionally, 30% of parents say they’ll use their retirement savings to help their children.

Around 24% of those with children over 18 say they’ve already helped their children buy a home. Click To Tweet

The highest number of parents doing so is in Atlantic Canada, Manitoba, and Saskatchewan, where 32% of parents paid for their children’s house.

30. Around 35% of Canadian parents are helping their children with the rent.

(Source: Advisor)

36% of parents with children younger than 18 say they will help out with rent, and 35% of those with children over 18 say they have already done so.

However:

Those living in Atlantic Canada and Alberta reported higher percentages, 48% and 41%, respectively.

31. 59% of Canadians are concerned they might lose their financial independence after retiring.

(Source: Newswire)

Statistics further reveal that 53% of Canadians worry they’ll have to work after retiring.

Some 6% of people never plan to retire, citing various reasons. In addition to that, 45% report being worried about their parents’ health and how it will affect their finances.


The COVID-19 Impact on Canadian Retirement Savings

32. About 59% of Canadians worry about the pandemic’s effect on their retirement savings.

(Source: Benefits Canada) 

Around 70% of Canadians were confident in the way they were managing their finances during the pandemic. However, a good portion reported being worried about the pandemic’s consequences on their retirement plans and saving ability. 

The concern is most prominent among Gen-Zers, with 73% feeling uneasy about the situation, compared to only 52% of Baby Boomers and 67% of Millennials.

33. One-quarter of Canadians reduced or stopped retirement contributions due to the pandemic.

(Source: Benefits Canada) 

Around 25% of Canadians say they had to reduce or stop contributing to their retirement or savings plans in 2020 due to the pandemic costs, according to average Canadian retirement income 2020 stats. 

And that’s not all:

11% had to cut or freeze contributions to the retirement funds, and 13% reduced or stopped savings for travel, clothes, or just short-term savings. 

Another 11% minimized long-term savings for buying homes, renovation, weddings, education, or vehicles. 

Lastly, 11% said they weren’t able to save during COVID-19.

34. 32% of Canadians believe they will have to postpone retirement due to the consequences of the 2020 pandemic.

(Source: Benefits Canada) 

28% of respondents believe they won’t be able to pay off the debt before they retire. Meanwhile, 47% decided to contribute to a TFSA in 2021.

35. 62% of Canadian men are optimistic about their financial future.

(Source: Canada) 

Men are more positive than women regarding the health of their future financial state. Only 48% of surveyed females were optimistic.

Younger individuals also state higher confidence. 68% of those aged 18-34 were optimistic about their financial future.

36. 68% of men believe they can manage their finances well in retirement.

(Source: Benefits Canada)

For comparison, only 57% of women are confident in their money management skills. However, only 25% of women said they would look for retirement advice. 

What’s more:

Almost one-quarter of respondents said the pandemic had shown them they can live with less. Click To Tweet

In fact, many plan to keep some of their newly acquired spending habits

Another 20% of Canadians realized just how important keeping an eye on finances is, and 19% recognized the importance of pension savings. 

37. 45% of Canadians think they will still be working in some way when they retire.

(Source: Benefits Canada)

One of the most significant changes and retirement news at the end of 2020 was that a large portion of Canadians now plans to continue working in some capacity after their retirement. Currently, just 9% of retirees remain occupied.

Up to 30% of Canadians fear they won’t recover from the financial crisis brought on by the pandemic, and the percentage is even higher among those aged 45 to 54 – 36%.

What’s worse:

As many as 41% are worse off than they were in 2019, and 42% reported they would not be able to pull through the second wave financially.


The Bottom Line

Canadian retirement savings statistics point out the importance of a timely retirement plan. Financial experts advise people to start early and take advantage of market downtrends. 

So, in case you’ve managed to close 2020 with no heavy losses, the time is right to increase your pension fund contribution.

FAQ

How much does the average Canadian have in their RRSP?

An average Canadian had around $112,000 in their RRSP in 2019. This is far less than the estimated threshold for a comfortable retirement.

How much does the average Canadian have in savings?

The average net saving for Canadian households was $852 in 2018. The top 20% earners saved $41,393 per household during the same year.

How much money do I need to retire in Canada?

There is no one-size-fits-all saving strategy or a universal target amount. Canadian retirement savings statistics are full of estimates, ranging from $500,000 to over $2 million. Most experts, however, set the bar at around $1 million.

 

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