How much do Canadians need to retire comfortably?

Canadians now believe they need an average of $1.7 million to retire comfortably, but more than one‑third doubt they will reach that goal, according to a recent report — suggesting employers can do a lot more to help employees save.

The average retirement savings target has risen by $160,000 in a year, up from $1.54 million in 2024, BMO Financial Group notes. At the same time, 36% of Canadians say they are unlikely to meet their retirement savings goal, up from 29% last year.

This reflects growing uncertainty amid rising living costs and economic concerns, according to the company.

“Setting savings goals is essential, but turning those goals into reality is where the real work begins,” says Terri Szego, Senior Portfolio Manager and Senior Wealth Advisor at BMO Nesbitt Burns. “Big numbers can feel overwhelming, so we break them down into achievable steps to keep clients confident, motivated, and on track to help them make real financial progress.”

They will ‘never retire’

The BMO Financial Group survey also points to a shift in how Canadians view retirement itself. Among those who are not yet retired, 14% say they do not plan to stop working.

By generation, 27% of non‑retired Boomers, 20% of Gen X, 18% of Millennials and 15% of Gen Z respondents say they do not plan to retire.

“An increasing number of people say they plan to never retire, which often means they don’t want to stop working entirely,” says Catherine Laurin, Senior Portfolio Manager at BMO Nesbitt Burns. “For many, retirement includes part‑time work, freelancing, or passion projects. We work with clients to ensure their plans account for these choices, including how part‑time income may impact taxes and government benefits.”

Fewer than half of working-age Canadians have an employer-sponsored pension and most lack even a basic retirement plan, according to a previous report. And already, 35% of workers expect to retire later than planned amid worsening finances this year, according to previous studies.

Regional retirement gaps

The BMO Financial Group survey also reports significant regional differences in how much Canadians think they need to retire.

British Columbia respondents cite the highest average target at $2,201,000, followed by Ontario at $1,923,000 and Alberta at $1,658,000. Targets are lower in the Prairies and East: Saskatchewan and Manitoba at $1,278,000, Quebec at $1,237,000 and the Atlantic provinces at $928,000.

The survey also shows how expectations have shifted over time. The average amount Canadians believe they need has moved: 

• from $1,349,000 in 2019
• to $1,437,000 in 2020
• $1,638,000 in 2021
• $1,743,000 in 2022
• $1,671,000 in 2023
• $1,541,000 in 2024
• $1,706,000 in 2025.

How much are Canadians saving?

On saving behaviour, BMO Financial Group’s data suggest many workers are not contributing at levels typically recommended for retirement readiness.

While saving 10% of income is often used as a rule of thumb, 28% of Canadians report saving less than 5% of their income for retirement, 38% save between 5% and 10%, and 21% save more than 10%.

In monthly dollar terms, 10% of respondents save less than $100 for retirement, 23% save between $100 and $499, 10% save $500 to $999 and 12% save more than $1,000.

“Deciding how much to save for retirement is a personal choice and depends on many factors, but thinking in percentage terms can help with long term planning, so someone in their 20s, contributing 10% a month to an RRSP can be a great start,” says Margaret Leong, Senior Investment Counsellor and Portfolio Manager, BMO Private Wealth. “As earnings increase throughout an individual’s prime working years, so should their savings, creating an opportunity to take advantage of compound growth and build a more secure retirement.”

The survey also examined Canadians’ relationships with financial advisers. Nearly nine in ten (89%) investors say their adviser helps them meet their financial goals, with 44% strongly agreeing. Respondents cited sound strategies and advice, customised plans and strong personal relationships as top reasons for valuing their adviser, according to BMO Financial Group.

How can employers help workers prepare for retirement?

Here’s how employers can help workers prepare for retirement, according to employee benefits firm IMA:

• Promote catch‑up contributions: Educate employees aged 50+ about additional catch‑up room. Show how raising contributions (for example, to 12–15% of salary) can close shortfalls.

• Use automatic enrolment for new hires: Implement automatic enrolment into retirement plans, and streamline sign‑up for existing staff to reduce friction and missed opportunities.

• Offer flexible retirement investment options: Provide a range of vehicles such as target‑date funds, deferred compensation plans and select alternative investments, and consider auto‑escalation features that gradually increase contribution rates over time.

• Tailor and target communications: Send regular, segmented messages about retirement benefits, focusing outreach on employees who are not enrolled or under‑contributing, and simplify calls to action to boost participation.

• Align voluntary benefits with financial realities: Add voluntary benefits (for example, caregiving support) that free up household cash so employees can divert more money to retirement accounts.

• Use profit‑sharing and bonuses to build savings: Structure profit‑sharing or performance bonuses so all or part is paid directly into retirement plans, linking organisational success with long‑term employee security.

• Support Health Savings Account (HSA) use for retirement health costs: Contribute to HSAs and train employees to use them as long‑term investment vehicles to help cover substantial health expenses in retirement.

Canadians are making adjustments to their investment strategies rather than withdrawing from their retirement plans, according to a previous Sun Life report.