How much retirement savings do Canadians believe they need?

Canadians increasingly believe they need a seven‑figure nest egg to retire, even as many expect to work well past 65 and, in many cases, carry mortgage debt into their later years.

A new BMO retirement survey found Canadians now pegged the comfortable retirement number at $1.7 million, up from $1.54 million a year earlier, with 36% doubting they would ever hit that target.

At the same time, other polling and housing data suggested that homeownership costs are eating deeper into household budgets, leaving less room for retirement savings and making it more likely that borrowers would arrive at retirement still paying the mortgage.

Ambitious goals, shaky confidence

“Setting savings goals is essential, but turning those goals into reality is where the real work begins,” said Terri Szego, senior portfolio manager and senior wealth advisor at BMO Nesbitt Burns.

Since 2020, the amount Canadians believed they needed for retirement climbed by roughly 20%, with British Columbia respondents now targeting more than $2.2 million on average, compared with $928,000 in Atlantic Canada.

Fourteen per cent of non‑retired respondents said they never planned to stop working, a sentiment strongest among boomers who have not yet retired, one quarter of whom expected to stay in the workforce indefinitely.

“An increasing number of people say they plan to never retire, which often means they don't want to stop working entirely,” said 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.”

Mortgages followed Canadians into retirement

A Royal LePage survey showed 29% of Canadians planning to retire in 2025 or 2026 expect to carry a mortgage into retirement, compared with far lower levels a decade earlier.

Phil Soper, Royal LePage president and CEO, said the advantages of entering retirement mortgage‑free remained clear, from insulation against rate shocks to more predictable cash flow.

Past Statistics Canada work also showed more seniors holding mortgage debt than in previous generations, even as most older homeowners eventually paid off their loans.

For borrowers on fixed incomes, today’s higher‑for‑longer rate environment and stricter underwriting expectations from the federal regulator meant renewals could strain retirement‑age budgets unless they are stress‑tested early.

What this meant for brokers and planners

The BMO survey found many households still saved well below the often‑cited 10% of income benchmark, with more than a quarter putting away less than 5% and only about one in five saving more than 10%.

“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 per cent a month to an RRSP can be a great start,” said Margaret Leong, senior investment counsellor and portfolio manager at 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. Every extra dollar saved brings people closer to the retirement they envision.”

Meanwhile, more borrowers prioritise day‑to‑day living costs over long‑term savings, many younger workers remain pessimistic about ever owning a home, and older Canadians increasingly tap home equity or reverse mortgage products to support both their own retirement and adult children.

In fact, another BMO Retirement Survey found that nearly three quarters of Canadians said rising prices increased their worries about having enough saved for retirement, while about two thirds said inflation already affected their ability to save and invest for their later years.

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