Canadians say they need larger retirement savings but may fail

Less than half of respondents in a BMO poll are confident in saving enough for their retirement goals

Canadians say they need larger retirement savings but may fail
Steve Randall

The average amount that Canadians believe they need for their retirement has increased by 12% in the last two years, but many feel they won’t save enough.

A new poll from BMO Financial Group shows that $1.6 million is the average retirement savings goal, but just 44% of respondents are confident in achieving that by their planned retirement age.

Around one quarter of respondents said that they plan to retire when they are 60-69 years old, with 62 being the average. A similar share wants to retire early, at age 54.

Single Canadians (39%) are less confident in their existing retirement plans than couples (47%) and those who are widowed, divorced, or separated (46%).

More respondents said they rely on a financial advisor in the latest survey (79%) than in 2020 (70%) with those doing so being more confident in reaching their retirement goals (53%).

Regional variations

Retirement confidence varies widely across Canada, with only two provinces being above average for meeting their goals.

Albertans (51%) and Ontarians (46%) are most confident, followed by respondents in Quebec (43%), BC (40%), the Prairies (38%), and Atlantic Canada (37%) which are below the national average.

The national confidence level (44%) is down 10 points from last year.

However, more than half of respondents said they are unsure how much they need for their desired retirement goals, with those in the Prairies most likely to state their uncertainty (61%).

RRSP contributions

With the March 1 deadline for RRSP contributions fast approaching, the retirement study also reveals that 58% of respondents are planning to contribute this year. Atlantic Canada is the only province where below 50% of respondents plan to do this.

Of the 60% of those with an RRSP, two thirds have contributed to save for retirement, almost one quarter did so to achieve financial independence as early as possible, and 14% are saving for early retirement.

Couples are most likely to have an RRSP (69%) compared to singles (45%) and those who are widowed, divorced, or separated (52%). Couples are also more likely to know how to contribute to an RRSP.

Widowed, divorced, or separated Canadians are more likely to say that not having enough money is a barrier to contributing to their RRSPs this year (42%) compared to couples (26%) and singles (29%).