What Is the Average Canadian Retirement Savings in 2025?
40% of pre-retiires have under $5,000 saved while experts say $1.54 million is needed for comfortable retirement in Canada.
Canadian retirement savings in 2025 show significant age-based disparities, with individuals under 35 averaging $40,100, those aged 45-54 accumulating $290,900, and Canadians between 55-64 maintaining $377,300 in dedicated retirement funds. Despite these numbers, nearly 40% of pre-retirees hold less than $5,000 in savings, while the estimated comfortable retirement amount has risen to $1.54 million. Understanding these benchmarks and targeted strategies can help bridge the substantial gap between current savings and retirement goals.
Nearly two-thirds of Canadians are grappling with serious concerns about running out of money during retirement, a anxiety that has intensified given that inflation and rising living costs have pushed the estimated amount needed for a comfortable retirement from $1.21 million to $1.54 million in just six years. This substantial increase of over $300,000 since 2019 reflects the harsh reality that maintaining roughly 80% of pre-retirement spending has become much more expensive, particularly as inflation averaged 3.4% between 2020 and 2021.
Inflation has driven retirement savings targets up $330,000 in six years, leaving two-thirds of Canadians worried about financial security.
Current retirement savings data reveals significant disparities across age groups, with Canadians aged 55-64 holding average retirement savings of approximately $377,300, while those 65 and older maintain close to $272,100. Younger Canadians face the steepest climb, as individuals under 35 have accumulated only about $40,100 on average, despite 62% actively saving for retirement. The middle-aged cohort between 45-54 years shows progress with average savings reaching $290,900, though this remains well below the revised targets.
The financial landscape becomes more manageable when considering total net worth, which includes real estate and other assets minus liabilities such as mortgages and debt. Economic families aged 55-64 report average net worth of approximately $1.4 million, while singles in this demographic hold about $545,000. However, almost 40% of Canadians nearing retirement have accumulated less than $5,000 in dedicated retirement savings, highlighting the critical importance of thorough financial planning. Many financial advisors recommend the 70% rule, which suggests retirees need approximately 70% of their pre-retirement income annually to maintain their standard of living over a 25-year retirement period.
Government benefits provide essential foundation support, with average combined Old Age Security and Canada Pension Plan income totaling about $15,159 annually. Monthly CPP payments average $899.67 in 2025, reaching a maximum of $1,433.00 for qualifying recipients. Nearly 69% of Canadians utilize RRSP accounts as their primary retirement savings vehicle, though these become taxable starting at age 71. Successful retirement planning requires diversifying investment portfolios to protect against market volatility and optimize long-term growth potential. Many Canadians follow a 4% withdrawal strategy, which advises withdrawing 4% of their investment portfolio annually to ensure their retirement funds last for 30 years.
The retirement preparedness challenge is compounded by low confidence levels, particularly among Generation X, where only 12% feel assured about achieving their savings goals. About 26% of Canadians plan to work during retirement to supplement income, while keeping portions of portfolios invested in growth assets remains recommended to counteract inflation erosion of retirement funds.
Frequently Asked Questions
What Happens to My Retirement Savings if I Move Outside Canada?
Canadian retirement savings remain accessible when individuals relocate abroad, though account management requires coordination with Canadian financial institutions that may impose additional restrictions for non-resident clients.
RRSPs, RRIFs, and TFSAs continue functioning normally, however withdrawals trigger withholding taxes, contribution room accumulation ceases during non-residency, and currency fluctuations affect purchasing power when converting Canadian dollars to local currencies.
How Do Divorce or Separation Affect Canadian Retirement Savings Accounts?
Divorce or separation triggers mandatory equal division of retirement savings accumulated during marriage, including RRSPs and pension benefits, under Canadian family law. Transfers between former spouses remain tax-sheltered when executed through proper legal agreements, though overall retirement wealth decreases due to asset splitting.
Individuals must reassess retirement planning strategies, in the face of spousal benefits being lost and reduced savings requiring adjusted timelines for financial security.
Can I Withdraw Retirement Savings Early for Medical Emergencies?
Canadians can withdraw retirement savings early for medical emergencies, though conditions vary by account type. RRSP withdrawals are permitted anytime but trigger withholding taxes ranging from 10-30% and count as taxable income.
Some provinces allow disengaging Locked-In Retirement Accounts for significant medical expenses or permanent disability with proper medical documentation, providing essential financial relief during health crises.
What Are the Tax Implications of Inheriting Someone’s Retirement Savings?
Tax ramifications for inherited retirement savings differ markedly by account type and beneficiary connection. RRSP and RRIF assets trigger instant taxation unless transferred to surviving spouses or financially dependent children, who receive tax-deferred rollovers.
TFSA inheritances remain tax-free for all beneficiaries, with spouses maintaining sheltered status through successor holder designations. Proper estate planning minimizes tax obligations through strategic withdrawals and legal documents.
How Do Government Benefits Affect My Required Retirement Savings Amount?
Government benefits greatly reduce required retirement savings by providing foundational income through CPP and OAS, which average approximately $15,159 annually combined. Despite this support, financial planners recommend Canadians still accumulate $700,000 to $1 million in personal savings to maintain their pre-retirement lifestyle, though government benefits alone prove insufficient for covering rising costs and maintaining comfortable retirement standards.
What’s next?
The information provided is based on current laws, regulations and other rules applicable to Canadian residents. It is accurate to the best of our knowledge as of the date of publication. Rules and their interpretation may change, affecting the accuracy of the information. The information provided is general in nature, and should not be relied upon as a substitute for advice in any specific situation. For specific situations, advice should be obtained from the appropriate legal, accounting, tax or other professional advisors. Full details of coverage, including limitations and exclusions that apply, are set out in the certificate of insurance provided on enrollment.
This article is meant to provide general information only. It’s not professional medical advice, or a substitute for that advice.
Saphira Financial Group does not provide legal, accounting, taxation, or other professional advice. Please seek advice from a qualified professional, including a thorough examination of your specific legal, accounting and tax situation.
