The older you get, the more important it is to save money, especially if you want to be financially comfortable when you retire. But exactly how much should you be saving at different phases of life? Knowing average savings by age in Canada can provide you with a point of reference for assessing your financial situation and setting goals. Find out how much people your age are saving in Canada.
Key Points
- One way to measure your savings progress over the years is to review your savings relative to your age.
- In Canada, the average savings tends to increase with age.
- Ideally, you should save one year of your annual salary in your 20s, up to as much as 10 times your annual salary by the time you’re in your 60s.
Average Savings By Age In Canada
The cost of retiring in Canada can be relatively high, especially if you have rent or a mortgage to pay. That’s why it’s good to start investing early in life and avoid withdrawing large amounts from them until later on.
This chart shows the average savings of Canadian individuals (individuals not in an economic family) in various financial accounts (by age group):
| Age Range | Bank Deposits | TFSA | RRSP/RRIF/LIRA/and other pension assets |
| Under 35 | $15,200 | $11,980 | $16,220 |
| 35 – 44 | $11,516 | $10,743 | $27,416 |
| 45 – 54 | $10,985 | $10,048 | $48,374 |
| 55 – 64 | $44,601 | $27,523 | $139,244 |
| 65 & Over | $110,730 | $76,579 | $285,299 |
*Source: Statistics Canada
Median Net Worth By Age In Canada
Your net worth is the total amount of assets that you own, minus your liabilities. Assets include real estate, investments, vehicles, and retirement savings, while liabilities refer to your unpaid debts.
In Canada, the median net worth of Canadian families (economic families and persons not in an economic family) in 2023 was $519,700. Here’s the median net worth by age in Canada:
| Age Range | Net Worth |
| Under 35 | $159,100 |
| 35 – 44 | $409,300 |
| 45 – 54 | $675,800 |
| 55 – 64 | $873,400 |
| 65 & Over | $738,900 |
Keep in mind that these are just averages. Don’t feel bad if your net worth doesn’t meet the listed median. Personal finance is very personal, and every situation is different.
Learn more: What Is Net Worth And How To Calculate It?
How Much Money Should You Have Saved At Your Age?
According to financial studies conducted by Canada’s big banks, the exact amount of savings you need to retire depends on how you live afterward. For example, if you retire at 65 and live into your 90s, you’ll need a lot more money to sustain yourself over the years compared to a shorter lifespan.
However, the following table can be used as a benchmark on how much you should have saved according to your age.
| By 30 | You should have 1x your salary saved |
| By 40 | You should have 2x your salary saved |
| By 50 | You should have 3-4x your salary saved |
| By 60 | You should have 6-7x your salary saved |
| In Your 60s & Above | You should have 8-10x your salary saved |
Saving In Your 20s
As mentioned, your 20s are a good time to begin investing and laying the groundwork for healthy finances. That means paying off student loans, building good credit, and starting work. The earlier you begin saving, the more you can benefit from compound interest. Aim to save an amount equal to one year’s salary by the time you reach 30.
Saving In Your 30s
By your 30s, your income may increase, but your expenses and financial responsibilities may increase as well. At this age, saving can be harder due to buying a home, getting married, and having kids. That said, this is the time to strengthen your financial foundation and consider your long-term financial needs.
Consider saving at least two years’ worth of your salary by the time you reach 40. Maximize retirement contributions and invest money into tax-advantaged accounts such as an RRSP and TFSA.
Saving In Your 40s
Your 40s are particularly important for retirement planning, considering you’re roughly within two decades of entering this new phase. Saving in your 40s is often easier since you may have an established career and be living in a dual income household. At this point, it’s important to focus on growing your finances.
Try to save at least three to four times your annual salary by the time you reach 50. Focus on diversifying your investments to hedge against risk while building wealth.
Saving In Your 50s
If you wish to retire by your 60s or 70s, your 50s are definitely the best time to max out your RRSP and TFSA contributions, as well as pay down your remaining debts. Keep a close eye on your investments and get ready to cash out. After that, figure out which retirement benefits you’ll qualify for through work or the federal/provincial government,
At this point, you should have at least 6 to 7 times your annual salary saved by age 60.
Saving In Your 60s And Over
By retirement age, you’ll ideally have a solid RRSP fund, which must be completely withdrawn or converted to a Registered Retirement Income Fund by age 71. You may also start to consider full or partial retirement. RRSP income is taxable after withdrawal but can offer you a decent nest egg, particularly when combined with the Canada Pension Plan (CPP) and Old Age Security (OAS).
By the time you retire, you should have 8 to 10 times your yearly salary saved.
How Much Do You Need To Retire In Canada?
In Canada, some financial experts say that you’ll need at least 70% of your annual pre-retirement income for every year of retirement. So, if you make $70,000 a year and live for 30 years after retirement, you’ll theoretically need $1.47 million ($70,000×70%x30 years) to finance your full retirement.
That said, the average amount of money that you actually need to retire comfortably depends on how you live, including personal and financial factors such as:
- Where and when you wish to retire
- General lifestyle choices
- Whether you continue working at all
- Other kinds of support you’ll have (familial, governmental, etc.)
- Remaining expenses (mortgage, commuting costs, children, etc.)
Rule Of Thumb For Retirement
Overall, the general rule of thumb for retirement is to start saving as early as possible, even if it’s only a few dollars a month. Experts will also use the “4% rule”, where you withdraw at least 4% of your investment earnings every year, with the goal to make your savings last for 30 years or possibly more.
For instance, if you have $500,000, 4% of that would give you $20,000 a year to live on during retirement. This would last 25 years.
How Much Will You Receive From the Government During Retirement?
When calculating your retirement savings, it’s also a good idea to consider how much you may receive from the government. There are several government support plans you can get to replenish your savings after you retire in Canada:
Old Age Security (OAS)
OAS is a monthly benefit for Canadians aged 65+. Payments are calculated based on an applicant’s age, income, and time living in Canada. Currently, the maximum OAS payment is $727.67 a month and your income must be under $148,451 a year to qualify.
If your income is below a certain level, your OAS payment may include the Guaranteed Income Supplement (GIS). This offers up to $1,086.88 per month for single, widowed or divorced pensioners making under $22,056 per year (figures may vary according to marital status).
Canada Pension Plan (CPP)
CPP is available to Canadians who are 60 or over and is one of the country’s primary sources of income for seniors. It’s a taxable monthly benefit that replaces part of your income after you retire and, if you’re qualified, you can collect it for the rest of your life.
To qualify, you must make at least one CPP contribution from work performed in Canada or as the result of credits you received from a former spouse or common-law partner after your relationship ended. The maximum CPP payment is $1,433 per month for retirees aged 65+.
Quebec Pension Plan (QPP)
QPP is compulsory for Quebec residents who are 18+ and earning over $3,500 per year from employment. It provides Quebec workers and their families with basic financial support in the event of retirement, death, or disability. Since it’s the Quebec version of the CPP, the maximum monthly QPP retirement pension is also currently $1,433.
If you work in Quebec for at least one year before retiring, you can qualify for QPP at age 60. The amount you receive depends on your lifetime income and age when you begin collecting pension payments. However, if you wait until age 65 to apply, you can qualify for an additional plan that raises your income replacement rate and pensionable salary.
What Affects How Much I Should Save?
Several key factors impact how much you can and should save:
- Lifestyle: If you’re used to an expensive lifestyle, travelling, and spending money on leisurely expenses, you may need to save more to maintain your current lifestyle when you retire.
- Cost Of Living: Living in cities with a high cost of living may require more substantial savings.
- Retirement Plans: An employer-sponsored retirement plan — or lack thereof — can impact your retirement savings needs.
Bottom Line
Now that you know the average savings by age in Canada and the general amount you need for retirement, you can start creating a savings plan. Saving is such an important part of building your future, so it’s best to get started right away, even if you’re only setting aside a few dollars each month. The earlier you start, the better.
