By 30, the average Canadian has saved around $22,000. By 40, that number rises to $71,000, and by 50, it reaches $169,000. However, many Canadians fall short of these averages due to high living costs and rising debt.
Your savings determine your ability to achieve goals like retirement, homeownership, and financial independence. The average Canadian will need more than $1 million to retire comfortably.
Below, we discuss the average savings by age in Canada, which savings options you should explore at different ages, and practical tips to help you boost your savings.
Key Takeaways
- The average Canadian under 35 has about $27,000 saved.
- 45 to 54-year-olds have about $40,000 in savings.
- 45 to 54 is peak earning time, so you should be saving the most at this age.
- Most Canadians will need more than $1 million to retire comfortably.
- Use tax-advantaged accounts to save the most money for the future.
Average savings by age in Canada
Excluding pensions and non-financial assets like real estate, here’s a look at what Canadians have saved:
- Under 35: $27,425
- 35 to 44: $23,743
- 45 to 54: $39,831
And here’s what each age group has set aside in their RRSPs:
- Under 35: $9,905 in RRSPs
- 35 to 44: $15,993 in RRSPs
- 45 to 54: $41,998 in RRSPs
At retirement, the average retiree has about $272,000 in cash savings (apart from pensions and assets), according to Statistics Canada.
Savings rates rose during the pandemic, though it was mostly high-income households saving extra money. High-income households contributed to around 40% of this increase, as they were less affected by job losses.
How to budget by age in Canada
Your expenses depend on your age, but other factors like where you live and lifestyle habits also contribute.
In your 20s
Save: 5 to 10% of your income
If you earn $45,000 per year, you should be saving about $4,500 per year. If you earn $65,000 per year, aim to save about $6,500.
Your 20s are a great time to build credit and start repaying your debts. It’s also appropriate to start saving for short-term goals, like travel or an emergency fund, and to start learning about investing for retirement.
- High-interest savings accounts (HISAs)
- Responsible use of credit cards
- Open a retirement account
In your 30s
Save: 15% of your income
As your income grows in your 30s, increase your savings rate. If you earn $65,000 per year, aim to save about $9,750. If you earn $85,000, earmark $12,750 for savings goals.
Your 30s will deliver bigger goals – and bigger expenses. You might be saving for a wedding. You could be eyeing a down payment, or you may already be paying off a mortgage. You may be saving for family costs (fertility, childcare) or investing in your fur babies. Meanwhile, you’re probably still paying off your debt and retirement looms ever closer.
- Maximize your RRSP contributions
- Maintain a 3-6 month emergency fund
- Open savings-specific accounts (FHSA, TFSA, HISA)
- Open child-specific accounts (RESP)
- Avoid unnecessary debt
In your 40s
Save: 20 to 30% of your income
In your 40s, your earning potential is approaching the highest it will ever be (45-54). This is the perfect time to save as much money as you can, even as your expenses may be ballooning, too.
You may be eyeing a new home or renovations while paying down a mortgage. Your kids’ education needs funding. Your parents may be in need of additional support. Healthcare costs may be rising for you, and it’s never too early to start estate planning.
Plus, retirement is just two decades away.
- Maximize your RRSP contributions
- Contribute to a TFSA for supplemental retirement savings
- Consider HISAs and GICs for savings
- Avoid unnecessary debt
In your 50s
Save: 15 to 20% of your income
In your 50s, your earning potential is now at its peak, but it will soon dwindle.
You may need to pull back your savings rate slightly, depending on your previous savings habits. It’s time to balance your expenses with your income and begin planning how you’ll distribute your assets in retirement, rather than accumulate more assets and more debt.
Can you really afford a cottage? What kind of support do your elderly parents require? Will you be financially supporting your children when they move out?
- Fully fund your Health Spending Account (HSA)
- Evaluate your retirement portfolio for retirement and income
- Consider converting your RRSP to an RRIF
- Start legacy planning with a tax professional
In your 60s and beyond
Save: 15% of your income
At this age, you may start relying on your retirement savings to provide income. You’ll start to receive a pension, possibly a government pension plus a private pension or other seniors benefits.
Expenses in your 60s and 70s include healthcare premiums, housing, and hobbies like travel and art. Many older people choose to downsize or relocate to cut down on housing costs.
Long-term care costs are set to rise, so you’ll need to continue saving carefully even on a reduced income!
- Maximize RRIF */withdrawals
- Use your HSA for healthcare costs
- Open a seniors bank account for special perks
- Save for unexpected expenses
- Pay off debt and live within your means
- Finalize your estate plans
How much money should you have saved by 30?
Fidelity says you should have about one year of salary set aside by age 30.
The average salary for a 30-year-old Canadian is $46,900.
Let’s say your annual salary is $50,000 and you want to have $50,000 saved by age 30. Here’s a breakdown of how your $50,000 could be split up:
- Emergency fund: 3 to 6 months of living expenses in a HISA ($3,500 x 3 = $10,500)
- Retirement savings: RRSP ($24,000)
- Goal-specific savings: FHSA ($16,000)
Depending on your situation, you’ll want to invest different amounts in each category. Perhaps you feel more comfortable with a 6-month emergency fund, or maybe you're saving more aggressively for a house than retirement right now.
How much should you save per month?
Aim to save between 10 and 20% of your monthly income – the more the better.
- If your monthly income is $3,500, save between $350 and $700 per month.
- If your monthly income is $4,500, save between $450 and $900 per month.
- If your monthly income is $6,000, save between $600 and $1,200 per month.
Within your savings, split your money into two categories:
- Short-term savings: 5% of income
- Retirement savings: 15% of income
For instance, if you earn $3,500 per month and you save 20% of your income, you could set aside $175 toward short-term savings and $525 every month toward retirement.
That would add up to $2,100 and $6,300 annually, respectively.
How much do you need to retire in Canada?
The median retirement income in Canada is $74,200, but you may need more or less.
- Expectation: A recent BMO retirement survey showed Canadians believe they need $1.7M to retire.
- Reality: Experts TD Wealth advisor recommends a budget of 70% of your pre-retirement income to retire in Canada.
The average life expectancy in Canada is 81.7 years and the average retirement age in Canada is 64.4. Let’s be optimistic and say you’ll live 25 years past retirement.
So what’s the sum needed for retirement?
The 70% rule:
Say you earn $72,000 per year at the time of retirement. Your reduced salary (70%) would be $50,400. If you live for 25 years, you'll need $50,400 x 25 = $1.26M.
(70% x your annual salary at retirement) x 25 years = Amount you need to retire
The 4% rule:
If you aim to withdraw 4% of your investment portfolio every year of retirement, you should be able to live off your portfolio as a retiree without drawing it down to zero. All while keeping pace with inflation.
Say your annual expenses in retirement will be $50,000. If we divide annual expenses by 4%, you'll need $1.25 million invested to safely withdraw $50,000 each year of your 25-year retirement.
Biggest obstacles to saving money in Canada
Saving money in Canada in 2025 will be increasingly difficult due to several factors:
Inflation and unpredictable economic forces
Despite cooling in the last year, inflation in 2025 will leave Canadians with less room for savings. The cost of essentials (groceries, utilities, etc.) has skyrocketed in the last 5 years.
Childcare costs and healthcare expenditures are unpredictable stressors.
On top of inflation, uncertainty around government policies and benefit programs lingers for 2025. When the rising costs of living make saving seem impossible, saving feels futile to many Canadians. This causes many people to give up before they even start.
Expensive housing market
It will remain extremely difficult for many Canadians to penetrate the housing market in 2025.
High property prices and a low supply of properties are discouraging people across the country from getting on the property ladder. In fact, multiple provinces have set benchmark records in the last year.
This is all on top of the difficulty of saving a down payment with stagnant wages and high inflation.
Stagnant wages
Wage growth in Canada has not kept pace with the true cost of living for most Canadians.
Stagnant wages mean that many Canadians simply can’t stretch their income enough to set aside money while also covering current expenses. If inflation continues to erode purchasing power while wages stay the same, Canadians will struggle to save for the future.
Growing debt and lifestyle inflation
Credit card debt in Canada is at a 17-year high, according to Equifax Canada, and consumer debt is $2.5 trillion.
According to Statistics Canada, there is $1.76 in debt for every $1 of disposable income in Canadian households.
The cultural pressure is enormous and Canadians are taking on enormous amounts of debt to stay afloat (or to keep up with the Joneses). This means car loans, student loans, credit cards, and HELOCs.
To repay their debts – and some debts have high interest rates – Canadians are choosing to sacrifice savings in favour of servicing their debt.
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Some accounts and strategies are especially effective at helping you save money:
High-Interest Savings Accounts (HISA): Simple, low-risk accounts with higher interest rates than regular savings accounts
HISAs are perfect for emergency funds and short-term savings. Put cash here that you don’t need immediately, and it’ll grow a bit faster than if you kept it in a regular savings account.
Savings-specific accounts (FHSA, TFSA, RRSP): Tax-advantaged accounts for specific savings goals like a first home or retirement.
These accounts are ideal if you have a clear savings goal. Use an FHSA if you’re a first-time home buyer, a TFSA for tax-free growth, and an RRSP for retirement savings.
Investment accounts: From index funds to stocks and ETFs, compound interest is very powerful if you start investing early.
Investing is good for building wealth over time, whether in a brokerage account or a retirement-specific account. Begin in your 20s or 30s to maximize returns and minimize taxes in retirement. Look for minimal fees and low MERs, as well as a diversity of exposure.
No-fee chequing accounts: Pay no monthly fees with basic features for everyday spending
Avoid monthly banking fees with a free chequing account. Switching to a basic no-fee account means foregoing premium perks like free cheques, but you’ll save a ton in the long run.
Tax credits: Take all eligible credits to reduce the amount of taxes you owe.
Contributions to an RRSP, disability tax credit, First Time Home Buyer Tax Credit, Home Accessibility Tax Credit – make sure you utilize every tax credit available to you, whether you use tax software or an accountant.
This is especially valuable in your higher-earning years.
FAQ
How much does the average Canadian have in savings?
The average Canadian has about $30,000 to $40,000 in personal savings, though this varies widely by age, income, and financial goals. Many struggle to save due to high living costs, particularly housing and inflation.
Can I retire at 60 with $500k in Canada?
It’s feasible to retire modestly at 60 with $500k in Canada, but many people would find this budget insufficient for 20-30 years of retirement. It depends on your lifestyle, health, and pension income sources as a retiree.
Is $800,000 enough to retire on in Canada?
$800,000 may be enough for retirement in Canada if paired with CPP, OAS, and a modest lifestyle. Factors like location, inflation, and healthcare costs could require more savings than this if you hope to maintain financial security during retirement.
What is a good net worth by age in Canada?
By age 30, aim for between $50,000 and $100,000. By 40, $200,000 and $500,000. By 50, $500,000 and $1M. However, many Canadians fall below these targets. It depends on your income, savings rate, and retirement goals.
What is considered wealthy retirement in Canada?
Wealthy retirement in Canada typically means $2M+ in investments or assets. This gives you financial security, luxury options, and comfort without relying on government pensions or part-time work. Lifestyle and location heavily influence this number.
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