Nearly 80% of Canadians fear they’ll fall short in retirement as costs stay high

Even as inflation cools and the increase in the cost of living starts to level off, the anxiety of higher prices — and the overall impact inflation had on households budgets — isn't going anywhere.

Nearly eight in 10 Canadians (76%) worry they won’t have enough money to retire comfortably (1) — a concern that’s grown more acute in the wake of persistent high costs and rising household debt. Another 63% say price increases over the past year have made it harder to save.

“Many Canadians continue to show resilience, making saving and investing in their retirement a top priority,” said Brent Joyce, chief investment strategist and managing director at BMO Private Investment Counsel in a press statement (2). “The best way to stop rising prices from eroding savings over the long term is to build a portfolio that mitigates inflationary pressure while balancing time horizon and risk.”

Canadians now expect to need $1.7 million to retire

On average, Canadian survey respondents believe they’ll need $1.54 million to retire — down from $1.67 million in 2023 (3). But newer research suggests that number is already outdated.

According to RBC’s 2025 Retirement Myths & Realities Poll, Canadians now peg their ideal nest egg closer to $1.7 million, a 10% jump year-over-year as many reassess their longevity and lifestyle costs (4).

That’s a sobering figure for workers already stretched thin. FP Canada’s 2025 Financial Stress Index found 49% of Canadians cite money as their biggest source of stress — more than personal health or relationships (5).

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Inflation lingers, even as CPI cools

Canada’s annual inflation rate eased to 2.8% in October 2025, down from 3.9% a year earlier. Yet the Bank of Canada says household expectations remain elevated, particularly for essentials such as food, housing and utilities.

“Inflation is still a major concern,” said Robert Kavcic, senior economist at BMO (6). “The spike in prices as the economy emerged from the pandemic was a stark reminder that rising costs can quickly disrupt spending, investment and savings plans.”

Canadians boost RRSP contributions despite strain

Despite the pressure, Canadians are contributing more than ever to their Registered Retirement Savings Plans (RRSP).

The BMO survey found average RRSP contributions reached a record $7,447, up 14% from $6,512 in 2023 and surpassing the pandemic high of $6,822 in 2021 (7). Updated Statistics Canada data for 2024 put the figure even higher — $8,070 on average, a 9% year-over-year increase (8).

Saving for the future looks even better when looking at specific demographics. According to a Fidelity Canada report, Gen Z investors led the way, boosting their contributions by 14% over the previous tax year (9).

Still, this leaves quite a few Canadians of all ages struggling to save. To help, here are four common coping strategies:

1. Cut all other spending to maintain current retirement savings levels.
2. Put less into retirement savings.
3. Plan on working longer.
4. Put off retirement savings completely.

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RRSPs vs TFSAs: A shift toward flexibility

A growing share of Canadians now prefer Tax Free Savings Accounts (TFSAs) to RRSPs. According to CIBC data, over half (53%) of investors with both TFSA and RRSP accounts said that a TFSA contribution made more sense for them right now because of the tax-free withdrawals (10).

For those still unsure, BMO’s Joyce advises balancing both (11): “RRSPs remain powerful for long-term compounding, while TFSAs can buffer short-term shocks without tax penalties.”

How Canadians can protect their savings

To protect your savings and help build a nest egg, experts recommend a three-step approach:

• Automate and start small — Even modest, consistent deposits can build momentum.

• Diversify against inflation — Consider dividend-paying ETFs, real-return bonds, or balanced funds that adjust with price levels.

• Get professional guidance — A licensed advisor can tailor a plan that matches income stability, family needs, and risk tolerance.

As BMO’s Kavcic notes, inflation isn’t going away — but planning early and staying invested can prevent it from derailing long-term goals.

Retirement woes

Canadians are contributing more than ever to their Registered Retirement Savings Plans (RRSP). This year, average RRSP contributions are on track to reach $7,447 — which marks a 14% increase over last year from $6,512 and above the pandemic high-water mark set in 2021 of $6,822.

For those hoping to save for retirement amid inflationary concerns, BMO recommends planning early, practicing discipline, contributing securities to an RRSP and seeking professional financial advice (12).

Survey methodology

The 2025 BMO Retirement Survey was conducted online by Pollara Strategic Insights with 1,500 adult Canadians aged 18 and older from November 8 to November 18, 2024. A probability sample of this size would carry a margin of error of ±2.5 percentage points, 19 times out of 20.

—with files from Romana King

Article sources

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

BMO (1, 2, 3. 6, 7, 11, 12); RBC (4); FP Canada (5); Statistics Canada (8); Fidelity Canada (9); Advisor.ca (10)