The Growing Challenge of Canadian Retirement Savings
If you feel that achieving financial security for your golden years is becoming increasingly difficult, you are part of a significant majority in Canada. Recent data paints a concerning picture about retirement preparedness across the nation.
Widespread Concerns About Retirement Readiness
According to a comprehensive survey conducted by the Bank of Montreal, nearly 70 percent of Canadians believe that saving for retirement has become more challenging compared to their parents' generation. Even more strikingly, 77 percent anticipate that future generations will face even greater obstacles in building their retirement nest eggs.
Paul Lalonde, head of wealth planning at BMO Private Wealth Canada, addressed these concerns directly. "With uncertainty around the cost of living and what retirement will look like in the future, it's natural for Canadians to feel anxious about whether they're saving enough," he stated in an official news release. Lalonde emphasized the value of professional guidance, noting that "a trusted adviser can help cut through the complexity, create a clear financial plan, and help give people the confidence that they're taking the right steps — no matter where they're starting from."
Generational Perspectives on Retirement Challenges
The survey reveals distinct generational patterns in how Canadians perceive retirement challenges. Millennials emerge as the generation most convinced that saving for retirement has become harder compared to previous generations. Meanwhile, baby boomers express the greatest concern about retirement prospects for those who will follow them.
These perceptions align with concrete financial realities. An August 2025 report from IG Wealth Management found that approximately 40 percent of young Canadians are too preoccupied with debt repayment to contribute meaningfully to their retirement savings. This debt burden creates a significant barrier to long-term financial planning.
Current Retirement Savings Trends
Further evidence of retirement planning challenges comes from Edward Jones Canada, which reported that only 39 percent of Canadians planned to contribute to their Registered Retirement Savings Plan (RRSP) in 2025. Julie Petrera, senior strategist of client needs at Edward Jones, explained this trend: "Amid economic uncertainty, it's clear that Canadians are prioritizing their current expenses and putting retirement planning on the back burner."
The cost of living crisis has fundamentally altered retirement planning dynamics, forcing many Canadians to make difficult choices between immediate financial needs and long-term security.
Silver Linings and Practical Solutions
Despite these challenges, some positive developments offer hope for retirement planning. Royal Bank of Canada recently suggested that the traditional $1-million retirement savings target may be unnecessarily high for many Canadians. The bank noted that Canada Pension Plan and Old Age Security payments can substantially support retirement lifestyles, depending on individual expectations and needs.
Family support continues to play a crucial role in financial planning. The BMO survey found that nearly half of respondents plan to provide financial assistance to their children, even though 83 percent acknowledge that this support will likely impact their own retirement prospects. This "bank of mom and dad" phenomenon highlights the interconnected nature of family finances across generations.
Expert Recommendations for Retirement Planning
Financial experts emphasize several key strategies for improving retirement readiness:
- Start Early: Beginning retirement planning as soon as possible maximizes compound growth potential
- Budget Discipline: Implementing and maintaining monthly budgets helps ensure consistent savings
- Strategic Investing: Contributing securities investments to RRSPs can optimize tax advantages
- Professional Guidance: Seeking expert financial advice tailored to individual circumstances
Additionally, numerous digital tools have emerged to support retirement planning. Online retirement savings calculators can help Canadians determine appropriate savings targets based on their desired retirement lifestyle and timeline.
The TFSA vs. RRSP Decision
One of the most significant decisions facing Canadian savers involves choosing between Tax-Free Savings Accounts (TFSAs) and Registered Retirement Savings Plans (RRSPs). This choice depends on multiple factors beyond simple rules of thumb, including income levels, tax situations, and retirement goals. Financial experts recommend carefully evaluating both options to maximize retirement savings efficiency.
As economic pressures continue to reshape the retirement landscape, proactive planning and informed decision-making become increasingly essential for Canadians seeking financial security in their later years.
