Rising costs creating uncertainty over current saving, retirement readiness
Rising prices are shaking Canadians’ confidence in their ability to retire comfortably and pushing many to dial back on long‑term saving, raising fresh questions for employers about the adequacy of workplace retirement programs and financial education.
A new BMO Retirement Survey finds nearly three‑quarters of Canadians – 74 per cent – say inflation has increased their concerns about having enough money set aside for retirement. Two‑thirds report that higher costs are already affecting their ability to save and invest for their later years.
The findings, from a survey of 1,500 adult Canadians in November 2025, come as HR leaders grapple with how to support employees who are simultaneously facing escalating day‑to‑day expenses and growing anxiety about long‑term financial security.
Monthly budgets under pressure from inflation
Among respondents who said inflation was having a negative impact on their finances, almost half estimate they are spending an extra $100 to $300 each month on necessities, while about one‑third put the increase at more than $300 a month.
Those added costs are prompting concrete changes in retirement saving behaviour:
- 31 per cent say they are contributing less to retirement savings
- 27 per cent are cutting other spending to keep contributions steady
- 17 per cent have postponed retirement saving altogether
For employers, those data points suggest that even employees participating in group RRSPs, defined contribution (DC) plans or deferred profit sharing plans may not be contributing at levels required to meet their goals – especially if they are also drawing down emergency savings to deal with inflation.
Uncertainty about how long retirement savings will last
The survey also points to a broad lack of clarity about retirement readiness. When asked how long they expect their savings to last after they stop working, the largest share of respondents – 30 per cent – say they don’t know.
Among those who do offer an estimate, 22 per cent believe their nest egg will last between 10 and 19 years, and only 13 per cent think their savings will stretch beyond 30 years.
The survey suggests some Canadians are looking beyond the country’s borders for ways to make retirement more affordable. While many expect to remain where they currently live, roughly three in 10 plan to move to another city and half of that group intends to relocate to another country.
Of those contemplating an international move, 58 per cent expect a lower cost of living and nearly one‑third anticipate costs will be “significantly” lower. At the same time, 30 per cent believe retiring abroad will be more expensive, underscoring that factors beyond finances – such as climate, proximity to family or lifestyle preferences – also influence relocation decisions.
Regionally, respondents in Ontario are most likely to imagine retiring in another country, at 18 per cent, followed by residents of British Columbia at 16 per cent. Saskatchewan and Manitoba come in at 16 per cent, Alberta at 13 per cent, the Atlantic provinces at 12 per cent and Quebec at 11 per cent.
BMO’s recommendations to individual savers – including starting planning early, treating contributions as a regular expense, considering in‑kind transfers of securities into RRSPs and seeking professional advice – mirror areas where employers can reinforce messages through financial wellness programming and plan design.
