How Much Do You Really Need to Retire in Canada?

Retirement isn't a fixed number. It’s not about hitting $1 million just because someone on TV said so. What you actually need depends on how you want to live—and how long you expect to live.

Let’s break down what it takes to retire comfortably in Canada without falling for one-size-fits-all advice.

What’s the “Magic Number” for Retirement in Canada?

There isn’t one. But most financial planners use a rule of thumb: you’ll need 70% of your pre-retirement income per year to maintain your lifestyle.

So if you earn $70,000 per year today, aim for around $49,000 per year in retirement income.

Multiply that by 25 years of retirement? You’re looking at around $1.2 million. But that number is a starting point—not a goal carved in stone.

Factors That Change the Equation

1. Where You Live

A modest retirement in Winnipeg costs far less than one in downtown Vancouver. Consider housing, transportation, and health care costs in your chosen location.

2. Lifestyle Choices

Are you traveling often or staying close to home? Downsizing or keeping the family home? These decisions can swing your retirement needs by hundreds of thousands of dollars.

3. Retirement Age

The earlier you retire, the more money you’ll need to stretch over extra years. Retiring at 55 instead of 65 could mean needing $300,000–$500,000 more in savings.

4. Government Benefits

Canadians have access to:

• Canada Pension Plan (CPP): Up to $1,364/month (2025 max, if you contributed max for decades)

• Old Age Security (OAS): Up to $713/month (as of 2025)

• Guaranteed Income Supplement (GIS): For low-income seniors

Together, CPP and OAS could give you $20,000–$25,000 per year—more if you delay taking benefits until 70.

How to Estimate Your Retirement Number

Try this simplified formula:

(Annual spending goal - annual government benefits) × years in retirement = target

savings

Example:

• You want $50,000/year

• CPP + OAS = $20,000/year

• Retirement length = 25 years

($50,000 - $20,000) × 25 = $750,000 in savings needed

RRSP, TFSA, or Both?

You’ll probably need both:

• RRSPs give you a tax deduction now but are taxed when you withdraw.

• TFSAs grow tax-free and don’t impact income-tested benefits like GIS.

Balance the two based on your current income and your tax bracket in retirement. If you expect to be in a lower bracket later, lean toward RRSPs. If you're already in a low bracket, TFSAs often make more sense.

How to Know If You’re on Track

Here’s a rough benchmark by age (assuming retirement at 65):

Age	Retirement Savings Target
30	0.5× your annual salary
40	2× your salary
50	4× your salary
60	6× to 8× your salary
65	8× to 10× your salary

These are just ballpark figures. What matters more is your actual expenses—not what others think you should have saved.

What If You’re Behind?

You’re not alone. Most Canadians don’t retire with seven figures in the bank. Here's what you can do:

• Push retirement back a few years

• Delay CPP or OAS to get higher monthly payouts

• Reduce fixed costs by downsizing, relocating, or paying off debt

• Work part-time in early retirement to bridge the gap

Even small shifts—like saving an extra $200/month or cutting back on housing costs—can move the needle.

Bottom Line

There’s no universal retirement number that works for everyone in Canada. Your needs depend on your lifestyle, expenses, where you live, and when you plan to stop working. But with the right tools—and a realistic plan—you can get there without guessing in the dark.