As Canadians, we are often found to be house rich but cash poor. House rich but cash poor means that we have a significant portion of our net worth held up in fixed assets, primarily our homes, while our liquid assets or savings may not be as substantial. However, when planning for a comfortable retirement, it’s crucial to understand that having considerable savings can be more beneficial than possessing fixed assets. This post will help you understand the average savings by age in Canada.
We are all on our own investing journey, and technically shouldn’t compare ourselves to others (our individual circ*mstances are different, cost of living varies substantially from Vancouver, BC and Charlottetown, PEI, for example), but it is still “nice to know” how your finances stack up compared to other Canadians.
This comprehensive guide will delve into the landscape of average savings in Canada, the average net worth, and specifics of retirement savings. This post will also explore the importance of RRSPs for retirement, government-assisted retirement benefits, and tips for increasing savings. This guide aims to provide a clear understanding of savings and retirement in Canada.
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I mean, is it really true that there are only 400,000 Canadians who are considered high net worth in Canada, meaning having more than $1,000,000 USD in financial assets? And that only under 1% of Canadians can be called high net worth Canadians?
Table of Contents
The Landscape of Average Savings in Canada
Understanding the average savings landscape in Canada begins with a look of the income earner’s annual income and their savings habits. According to Statistics Canada, the average household savings rate in 2019 was 2%. This figure surged to a whopping 27% during the second quarter of 2020, primarily due to the pandemic, which forced Canadians to reduce their spending. As a result, the average Canadian saved more than $5,000 that year.
Interestingly, Canadians continued to sock away money in 2021, with the average savings rate holding steady at 12% for the first three quarters of the year. Not all these savings were left idle; some of it was used to pay down debt, purchase real estate, and acquire financial assets. However, a large proportion of this extra savings remained in bank accounts.
What is the average savings by age in Canada and what does “savings” include?
Average savings doesn’t include real estate.
To look at the data, Statistics Canada breaks average savings by age in Canada into two groups, those in an economic family and those who are not in an economic family.
The Statistics Canada Survey of Financial Security released in 2020 that was done in selected metropolitan cities across Canada shares the assets and debts by economic families.
An economic family is a group of more than two people living in one dwelling who are related together by blood, marriage, common law marriage, or adoption and foster relationships.
Basically like a household.
Here are a few caveats with regards to the Statistics Canada information.
- The specific data below is from 2019 data (the most recent available) and they are averages.
- Retirement Savings refers to RRSP or Pension Plan Savings (e.g. work pension plans, or work RRSP are included too)
- Average RRSP, RRIF, or LIRA is included within the average retirement savings.
- The average TFSA balance is lumped into the average non-RRSP or Pension savings but I thought it would be nice to tease it out so you can compare.
- The total average savings is the average retirement savings and non-pension savings added together (this includes things like bank accounts, mutual funds, stocks, bonds, anything outside of an RRSP or work pension)
I didn’t include the median savings of Canadians even though median might be a more accurate number than the average (as it can be skewed) because the data from Statistics Canada reported the median numbers as “use with caution” and “too unreliable to be published”.
Average Canadian Savings by Age
What’s the average Canadian savings by age?
You might have heard a survey in May 2023 from the HOOPP and Abacus data results indicating that 44% of non retired Canadians age 55 to 64 have less than $5000 in savings. Quite shocking data, especially since 1 in 5 of those Canadians have not set aside anything for retirement.
Let’s look at the real numbers shall we, rather than survey results.
Overview of Average Savings by Economic Families
Here are the average savings by age of economic families (e.g. household savings)- so this means people not living on their own, again this is based on Statistics Canada 2019 data (the most current available).
For those under 35, total savings, including retirement savings and financial assets, average $133,400. The 35-44 age group has an average total savings of $272,100. The 45-54 age group sees a significant jump in total savings, averaging $564,400. As Canadians approach retirement, the 55-64 age group shows an average total savings of $809,100. Interestingly, those aged 65 and above have an average total savings of $739,200, which is slightly lower than the preceding age group.
| Age | Average Retirement Savings | Average RRSP, RRIF, LIRA | Average TFSA | Average Non-RRSP or Pension Savings | Total Average Savings |
|---|---|---|---|---|---|
| Under 35 | $90,500 | $51,300 | $19,300 | $42,900 | $133,400 |
| 35 to 44 years old | $220,500 | $90,900 | $22,300 | $51,600 | $272,100 |
| 45 to 54 years old | $437,400 | $158,200 | $28,700 | $127,200 | $564,600 |
| 55 to 64 years old | $645,500 | $244,500 | $49,00 | $163,600 | $809,100 |
| 65 years and older | $514,800 | $283,000 | $61,300 | $224,400 | $739,200 |
Individual Canadians: A Look at Their Average Savings
Here is the average savings by age of Canadians who are living in their own household without an economic partner (be it spouse, sibling, foster relationship, adopted relationship etc.).
When taking a look at the average savings of individual Canadians, certain trends become clear. Data shows that the amount of savings increases with age until retirement. For example, individuals under 35 have an average total savings of $58,900. This figure climbs to $125,900 for the 35-44 age group, and continues to rise to $350,500 for the 45-54 age group.
As Canadians approach retirement, their savings continue to increase. The 55-64 age group shows average total savings of $446,500. Interestingly, those aged 65 years and older have an average total savings of $384,100. The lower average savings for those 65 and older may be due to the use of savings during retirement. It’s also worth noting the relatively low average TFSA balance. Maximizing contributions to your TFSA can increase your overall savings and provide a tax-efficient way to grow your investment.
| Age | Retirement Savings | Average RRSP, RRIF, LIRA | Average TFSA | Average Non-RRSP or Pension Savings | Average Savings |
|---|---|---|---|---|---|
| Under 35 | $40,100 | $20,300 | $14,200 | $18,800 | $58,900 |
| 35 to 44 years old | $89,700 | $47,200 | $15,400 | $36,200 | $125,900 |
| 45 to 54 years old | $290,900 | $118,200 | $22,000 | $59,600 | $350,500 |
| 55 to 64 years old | $377,300 | $150,500 | $30,300 | $69,200 | $446,500 |
| 65 years and older | $272,100 | $147,600 | $40,100 | $112,000 | $384,100 |
In 2023, if you contribute the maximum allowed amount to your TFSA, you could have a total of $88,000. In my humble opinion, the average TFSA for those age 65 years and older should be higher since the TFSA there are no probate taxes for the TFSA upon death.
Here’s a reminder of the TFSA contribution room for 2023 (if you were 18 years of age or older when the TFSA began in 2009):
| Year | TFSA Contribution Room |
| 2009 | $5000 |
| 2010 | $5000 |
| 2011 | $5000 |
| 2012 | $5000 |
| 2013 | $5500 |
| 2014 | $5500 |
| 2015 | $10,000 |
| 2016 | $5500 |
| 2017 | $5500 |
| 2018 | $5500 |
| 2019 | $6000 |
| 2020 | $6000 |
| 2021 | $6000 |
| 2022 | $6000 |
| 2023 | $6500 |
| 2024 | $7000 |
| Total | $95,000 |
In a recent article by the Globe and Mail, there was an average TFSA balance for 2022 chart that really surprised me.
Mark from My Own Advisor shared the Globe and Mail’s article on the average TFSA balance for Canadians by age in one of his round ups:
As you can see the average TFSA account size is not that large (or at least not near the maximum contribution amount available to Canadians).
- For those ages 30-34 they had a $13,810 average TFSA balance
- For those ages 35-39 they had a $15,186 average TFSA balance
- For those ages 40-44 they had a $17,062 average TFSA balance
- For those ages 45-49 they had a $21,604 average TFSA balance
- Ages 50-54 have an average $27,675 TFSA balance and so on
The TFSA is one of the best retirement savings investment vehicles we have and it looks like most Canadians are using it as really just a savings account.
It really is a misnomer to call it the Tax Free “Savings Account” and it should be anything but.
Investing your TFSA rather than using it as a savings account is the optimal way to use your TFSA.
For steps on how to invest with your TFSA, here’s my step-by-step guide on how to get to a 6 figure TFSA or even 7 figure TFSA (if you start early enough). Here’s my comparison between the RRSP vs TFSA.
Specifics of Retirement Savings in Canada
Retirement savings are an important component of an individual’s net worth, representing a significant portion of their nest egg. As mentioned earlier, the average 65-year-old Canadian or older has about $272,100 in retirement savings.
This figure is the culmination of years of consistent saving for retirement and careful financial planning. The amount of retirement savings varies across different age groups. Understanding these figures can help Canadians plan their retirement goals and evaluate their risk tolerance, ensuring they are on track for a comfortable retirement.
Average Retirement Savings for Canadians
Going deeper into the specifics of retirement savings, it’s interesting to note the breakdown of savings into different types of financial assets.
For instance, Canadians under 35 years of age have an average of $40,100 in retirement savings, of which $20,300 is in Registered Retirement Savings Plans (RRSPs), Registered Retirement Income Funds (RRIFs), or Locked-In Retirement Accounts (LIRAs). They also have an average of $14,200 in Tax-Free Savings Accounts (TFSAs) and $18,800 in non-RRSP or pension savings.
As Canadians age, the average balance in these accounts typically increases. For Canadians aged 65 and older, the average retirement savings is $272,100, with $147,600 in RRSPs, RRIFs or LIRAs, $40,100 in TFSAs, and $112,000 in non-RRSP or pension savings.
| Age | Average Retirement Savings (Economic Family) | Average Retirement Savings (Individual) |
|---|---|---|
| Under 35 | $90,500 | $40,100 |
| 35 to 44 years old | $220,500 | $89,700 |
| 45 to 54 years old | $437,400 | $290,900 |
| 55 yo 64 years old | $645,500 | $377,300 |
| Over 65 years old | $514,800 | $272,100 |
How Much Does The Average Canadian Have in RRSP at Retirement?
How much does the average Canadian have in RRSP at retirement?
As a recap, the average RRSP savings by age in Canada is as follows:
| Age | Average RRSP Savings (Economic Family) | Average RRSP Savings (Individual) |
|---|---|---|
| Under 35 | $51,300 | $20,300 |
| 35 to 44 years old | $90,900 | $47,200 |
| 45 to 54 years old | $158,200 | $118,200 |
| 55 to 64 years old | $244,500 | $150,500 |
| 65 years and older | $283,000 | $147,600 |
Now that you know what the average RRSP savings by age are in Canada otherwise known as the average Canadian RRSP savings by age, how much SHOULD you have saved for retirement so far on your nest egg accumulation journey?
Projected Retirement Savings Based on Age
Hopefully this post helps you see how your retirement savings compared to other Canadians your age but you’re probably really wondering how much should you be saving for retirement and whether you’re on track. Each decade of your life presents different financial challenges and opportunities, affecting how much you can save.
You might be worried about whether you have saved enough for retirement.
Click here if you’re wondering how much you should have saved by 35 or how much you should have saved by 40.
In general, the guidelines of “how much you should have saved relative to your age” is related to your annual income.
Kind of a silly metric, I know, since there are some people who don’t work full-time (like me).
Here’s how to make sure that you are on track for a comfortable retirement in Canada through the decades.
Saving for Retirement in Your 20s
Starting in your 20s, the focus is often on paying off student loans and setting up a stable income source. Even though these financial expenses are daunting, it’s important to start saving for retirement as soon as possible. The magic of compound interest means that even a small amount saved in your 20s can grow significantly over time (because of time).
Even if it is difficult to set aside a large portion of your income, saving a little bit consistently can make a huge difference in the long run. The key is to start saving and investing to get into the habit of saving and investing, and increase your contributions as your income grows.
Saving for Retirement in Your 30s
By your 30s, you’re likely earning more than you were in your 20s, but you may also have more money responsibilities, such as having a mortgage or children. It’s still just as important to prioritize saving for retirement by making consistent RRSP and TFSA contributions.
Even though it might be challenging to find some spare cash to invest, remember that the earlier you save, the more time your money has to grow.
Saving for Retirement in Your 40s
I’m in this decade now. Our 40s often mean the peak earning years. This is a good time to evaluate how much you have saved for retirement so far and make adjustments if needed. If you’re behind on your savings, this is a good time to catch up. With the higher income, increasing your total percentage saved will help your nest egg grow.
Saving for Retirement in Your 50s
When you are in your 50s you can think of this time as the home stretch for retirement savings. At this stage, it is still important to max out your RRSP and TFSA contributions each year.
Your 50s are also a good time to start thinking about how you will generate income in retirement. This could be through a combination of RRSP withdrawals, TFSA withdrawals, dividend income, and government benefits such as the CPP and OAS or even your defined benefit pension.
Saving for Retirement in Your 60s
If you’re not retired in your 60s yet, this time is crucial as it’s your last attempt at boosting your savings before retirement. It’s also the time when you must start withdrawing from your RRSP by age 71. Every amount that you put away in your 60s can still grow and contribute to your retirement.
How to Make Sure You Are On Track for Retirement
Want to boost your average Canadian savings?
Here are some actionable points to make sure you are on track for retirement and boost your own average savings by age in Canada.
The earlier you start investing for your future and your freedom from the 9-5 grind, the better.
Start by tracking your net worth and tracking your investment portfolio. I can’t emphasize this enough.
If you don’t know where you stand, you don’t know where you’re going.
I use Wealthica to track my own investment portfolio, it’s free and works great if you use Questrade as your brokerage.
The next step is to minimize fees (switch to a robo advisor or even take the leap towards DIY investing with one-ticket-ETFs where you don’t need to rebalance yourself).
Contribute regularly to your retirement accounts (you can’t invest what you don’t save).
Finally, let time and compounding work their magic… and that’s it!
Here’s an example of investing $30,000 per year for X number of years (whether it is 10 years, 20 years, 30 years, or 40 years) with various CAGR.
A 6% annual return is pretty reasonable, considering the S&P500’s average annualized return from 1957 until Dec. 31, 2021, is 10.67%.
| Compound Annual Growth Rate | 10 years | 20 years | 30 years | 40 years |
|---|---|---|---|---|
| 6% | $450,000 | $1,200,000 | $2,544,000 | $4,951,000 |
| 8% | $499,400 | $1,513,000 | $3,700,000 | $8,423,000 |
| 10% | $556,000 | $1,920,000 | $5,458,000 | $10,921,000 |
As you can see, initially in the first 10 years there’s not much of a difference between the rates of return, but as time goes on, the return on your investments do matter, because of the magic of compounding.
Here’s what 10% CAGR looks like below, investing $30,000 per year for 40 years.
You can try it for yourself, this is one of my favourite compound interest calculators.
Many of us want to get rich in Canada and knowing where you might stand in terms of average savings by age in Canada compared to others your age can be a good first step to figuring out where you want to end up (e.g. with lot of Canadian passive income)
Recap: The State of Savings and Retirement in Canada
Looking at savings and retirement in Canada, a few key points come to mind. Firstly, it’s pretty evident that the earlier you start saving, the better. If you start to put money aside in your 20s or at age 30, you can take advantage of the power of compounding. Compounding can drastically grow your money over time.
Secondly, it’s essential to be aware of your financial goals. You need to know the amount of income needed to retire comfortably. This amount varies greatly among Canadians and is influenced by factors such as lifestyle and living expenses.
It’s also helpful to know that the average 65-year-old Canadian has about $272,100 saved for retirement. Knowing this can provide a benchmark to compare your savings with other Canadians your age.
Ultimately, the state of savings and retirement in Canada is proof of the importance of early and consistent savings habits. So keep up the great work.
Once you’ve got the funds and the retirement savings in place, you’ll just need to figure out how to retire happy in Canada.
You might also be interested in:
- Canadian investing tips
- Investing for Millennials
- Best Canadian Dividend Stocks to Buy and Hold
- Covered Call ETFs in Canada
- How are dividends taxed in Canada
- Top 1% net worth in Canada
- Generational Wealth: What’s the Hype About?
Does the average savings by age in Canada data surprise you?
genymoney
GYM is a 40 something millennial writing about personal finance since 2009 and interested in achieving financial freedom through disciplined saving, dividend and ETF investing, and living a minimalist lifestyle. Before you go, check out my recommendations page of financial tools I use to save and invest money. Don’t forget to subscribe for a free dividend yield spreadsheet and the free Young Money Bootcamp PDF.
