How Much Canadians Think They Need to Retire and Why It Matters to Employers

How much do Canadians need to retire? If you ask most people, they’ll say $1 million.

It’s not only a guess, but a well-documented belief. According to a recent report, pre-retirees aged 45 and older now say they’ll need at least $1,020,000 to retire comfortably. That’s more than double the amount Canadians believed they needed 20 years ago.

Expectations are rising, but many don’t have a financial plan in place. Without one, reaching that $1 million target – accurate or not – can feel impossible.

As an employer, you can help close that gap.

Retirement Is More Expensive (and Uncertain) Than Ever

Canadians are living longer, working longer and juggling more financial pressure than past generations.

More than 88 per cent believe retirement today is more complicated than it was two decades ago. Nearly half say they may delay retirement because of the rising cost of living. The average planned retirement age has jumped to 65, up from 61 in 2005. Only about a quarter of current pre-retirees plan to retire before 65.

And yet, according to Statistics Canada, just 38 per cent of Canadian workers have access to a workplace pension. Most are left to rely on RRSPs, TFSAs and personal savings – if they can.

The $1 Million Myth

A $1 million retirement savings goal isn’t a one-size-fits-all plan. For some, it may be more than they need. For others, especially those without pensions or with high housing costs, it might not be enough.

Retirement planning varies based on housing status (owning vs. renting), debt levels, access to workplace retirement programs, health care costs, caregiving responsibilities, and whether someone plans to fully retire or ease into flexible or part-time work.

Canadians are no longer looking at retirement as a time to stop working, but as a time to pursue passion projects, flexible jobs or help support the next generation.

The million-dollar number is useful, but employees need a plan that fits their lives.

How Employers Can Help

Here are a few practical ways you can support retirement readiness:

• Offer a Group RRSP. Group RRSPs are low-cost, simple to manage, and help employees save without thinking. They’re a great first step.
  
• Add an employer match if possible. Even a two to three per cent match can improve long-term outcomes and engagement.
  
• Start the conversation early and often. Include retirement planning in onboarding, team meetings and benefits reviews. Many employees don’t know where to start or how much they’ll need.
  
• Bring in expert advice. Consider financial wellness workshops, a lunch-and-learn, or a digital tool. Highlight financial resources available through your Employee Assistance Plan (EAP), if applicable.

A New Way to Think About Retirement Benefits

Your employees may be aiming for that $1 million, but what they really want is peace of mind. That comes from knowing they’re on the right path, and that starts with simple, accessible support at work.

Contact us today so we can work with you to build retirement plans that work for you and your team.

Suggested Reading

Why Late-Career Employes Are Delaying Retirement and How Employers Can Help

How Employer Matching Can Improve Retirement Readiness