This is the second article in a series of blogs containing information about the landscape of retirement savings readiness for the average Canadian citizen in 2024-2025. In 2025, Canadians are presented with a complex financial market place marked by both progress and significant challenges.
While overall retirement confidence has seen a slight upward trend, a substantial portion of the population, particularly single individuals and younger demographics, express considerable concern about their ability to retire comfortably, if at all. Rising costs of living and the weight of household debt are major contributing factors, impacting the capacity of many Canadians to save adequately for their future.
Disparities in preparedness are evident across different demographic groups, with women and those without workplace pensions facing heightened vulnerabilities.
Public pension benefits, while providing a crucial foundation, are generally not projected to be sufficient to meet the retirement income needs of most average earners, underscoring the importance of personal savings and effective financial planning.
These monthly blogs will delve into the critical aspects of retirement, analyzing recent surveys and data to provide a comprehensive assessment of the current state of Canadian retirement readiness and highlight key areas requiring attention and potential intervention.
Executive Summary
The landscape of retirement readiness for the average Canadian citizen in 2024-2025 presents a complex picture marked by both progress and significant challenges. While overall retirement confidence has seen a slight upward trend, a substantial portion of the population, particularly single individuals and younger demographics, express considerable concern about their ability to retire comfortably, if at all.
Rising costs of living and the weight of household debt are major contributing factors, impacting the capacity of many Canadians to save adequately for their future. Disparities in preparedness are evident across different demographic groups, with women and those without workplace pensions facing heightened vulnerabilities. Public pension benefits, while providing a crucial foundation, are generally not projected to be sufficient to meet the retirement income needs of most average earners, underscoring the importance of personal savings and effective financial planning. This report delves into these critical aspects, analyzing recent surveys and data to provide a comprehensive assessment of the current state of Canadian retirement readiness and to highlight key areas requiring attention and potential intervention.
Retirement Savings Contributions and Participation
Recent data reveals a concerning trend in the participation and contribution rates to retirement savings plans in Canada. A February 2025 survey indicates a notable decline in the percentage of Canadians planning to contribute to their RRSPs in 2025, with only 39% intending to do so, a significant drop from the 49% reported in 2024. This decrease is particularly pronounced among younger Canadians aged 18 to 34, where the planned contribution rate has fallen from nearly 60% in 2024 to just 41% in 2025. This substantial reduction in RRSP participation, especially among younger individuals who have the longest time horizon for their savings to grow, raises concerns about their future retirement security. The decision to reduce or forgo RRSP contributions likely reflects the immediate financial pressures faced by many Canadians due to the rising cost of living and increasing debt burdens, making it challenging to allocate funds towards long-term savings.
The challenges in retirement savings are particularly acute for single Canadians. A 2025 survey highlights that approximately one in three (36%) single Canadian employees express a fear that they will never be financially able to retire. Furthermore, nearly half (44%) of single Canadians are reportedly setting aside less than $25 per month for saving and investing. This alarmingly low savings rate for a significant portion of the single population underscores their vulnerability in preparing for retirement. Without the potential for shared expenses and pooled savings often found in couples, single individuals may face greater difficulty in accumulating sufficient retirement funds on their own.
Beyond just contribution rates, the overall engagement in retirement planning appears to be lacking despite a relatively high level of ownership of retirement savings products such as RRSPs and TFSAs. This suggests a disconnect between having access to savings vehicles and actively taking steps to plan for retirement and ensure those savings are adequate to meet future needs. To bridge this gap, there is a recognized need to make retirement savings more relevant and connected to individuals’ immediate financial goals, particularly for younger generations and Millennial parents, for whom Tax-Free Savings Accounts (TFSAs) may present a more appealing and flexible savings option. The flexibility of TFSAs, allowing for tax-free withdrawals, may better align with the shorter-term financial priorities often faced by younger demographics, potentially encouraging greater participation and contribution.
My Role as Their Advisor
- Personalized Financial Planning:
I would work with Jack and Jill to create a comprehensive financial plan tailored to their specific needs and goals. - Investment Advice:
I can provide guidance on investment strategies, asset allocation, and risk management. - Retirement Projections:
I can use financial planning software to generate detailed retirement projections and stress-test their plan under various scenarios. - Regular Reviews and Adjustments:
I would conduct regular reviews of their plan and make adjustments as needed to ensure they stay on track. - Education and Support: I would provide ongoing education and support to help them make informed financial decisions.
- CPP and OAS information: I would help them get the most accurate information available regarding their future CPP and OAS payments.
By providing clear and actionable advice, I can help Jack and Jill navigate the complexities of retirement planning and achieve their financial goals.
Contact me today at Ripple Effect Financial to get your financial plan started allowing you to live happily through your retirement years.
