Behind on retirement savings? What to do now.

Life is busy. Between managing mortgage payments, raising children, supporting aging parents and handling debt, there are so many priorities competing for your time and money. As a result, Canadians often delay planning for retirement It’s not that it’s unimportant, but more immediate responsibilities have a tendency of taking over.

If this sounds familiar, you’re far from alone. A recent RBC poll found that the majority of Canadians say everyday costs are holding them back from achieving their financial goals.

At some point, though, retirement stops feeling like a distant idea and starts feeling real. And for many Canadians, that realization can bring a wave of concern, especially if savings haven’t kept pace with expectations.

The good news is, falling behind isn’t the end of the story. There are practical ways to address retirement savings shortfalls and catch up on retirement savings, even later in your career.

If you feel behind on retirement savings, this article is here to offer you reassurance, clarity and practical, judgment-free guidance. Whether you’ve saved consistently, sporadically or not at all, there are steps you can take now to strengthen your financial security and move toward retirement with greater confidence.

Why so many 40–65-year-old Canadians feel behind on retirement

Many Canadians between 40 and 65 feel behind on retirement because they’ve had competing financial priorities for decades, and rising costs have made it hard to save consistently.

According to the HOOPP 2025 Canadian Retirement Survey, 56% of Canadians say affordability challenges and economic uncertainty are making them worried about having enough money in retirement. Nearly half (49%) have not set aside any money for retirement in the past year, and 39% have never saved for retirement.

Here are some of the biggest factors contributing to retirement savings shortfalls:

• Rising cost of living
  Housing, groceries, insurance and everyday expenses have climbed steadily in recent years. When cash flow is tight, long-term savings are often the first thing to pause.

• A later start to saving
  Many Canadians spend their early working years paying off student loans, building careers or purchasing a home. Retirement contributions often begin later as a result.

• Fewer workplace pensions
  Previous generations were more likely to have defined benefit pensions. Today, workplace savings plans require more personal responsibility, and those without workplace plans must build retirement income through RRSPs, TFSAs and other investments.

• Sandwich Generation pressures
  Supporting both children and aging parents can strain finances and limit how much can be set aside for the future.

• Economic shocks and uncertainty
  Over the past 25 years, Canadians have navigated multiple financial disruptions – from the 2008 financial crisis to the COVID-19 pandemic and recent inflation. Each event has made long-term planning more challenging.

If you see your own situation here, take comfort in knowing that feeling behind is common – and challenges can be addressed with practical steps.

What does “retirement ready” actually mean in Canada?

Being retirement ready doesn’t mean hitting a magic savings number. Rather, retirement readiness involves having a realistic plan to generate enough income to support your needs and lifestyle, without relying on full-time work.

How much retirement income do you really need?

If you’ve ever wondered, how much should I save for retirement, the honest answer is: it depends. Your personal target depends on such factors as:

• Whether your mortgage will be paid off

• How much debt you’re carrying

• Your desired lifestyle and travel plans

• Healthcare needs

• Family support responsibilities

• Where you plan to live

While some costs drop in retirement – such as commuting, work-related expenses and retirement contributions – others may increase. Think healthcare, travel and leisure activities.

Comparing yourself to others rarely helps. Your income simply needs to reasonably support the life you want.

The role of CPP, OAS, and personal savings

Most Canadians will receive retirement income from government programs such as the Canada Pension Plan (CPP) and Old Age Security (OAS). Depending on income, the Guaranteed Income Supplement (GIS) may also apply.

These government benefits are designed to provide foundational income. As building blocks of your retirement income, they’re not meant to fully replace your working salary.

That’s where personal savings and assets come in, including:

• Registered Retirement Savings Plans (RRSPs) and Registered Retirement Income Funds (RRIFs)

• Tax-Free Savings Accounts (TFSAs)

• Workplace pensions

• Non-registered investments

• Real estate

Coordinating your government benefits with your personal savings is what ultimately supports retirement readiness.

Why retirement readiness looks different for everyone

Everyone has different goals and pathways to retirement.

Some Canadians retire at 60. Others work into their 70s (or later). Some want to travel extensively, while others prefer a simpler, lower-cost lifestyle.

Your health, career flexibility, financial obligations and personal goals all shape what “ready” looks like – along with how much you’ve saved.

Am I on track? How to assess readiness

You’re on track for retirement readiness if your current savings rate and projected income sources are likely to cover your essential expenses and support the lifestyle you want by the time you plan to stop working.

If that feels unclear, that’s normal. Many people haven’t formally projected their retirement income.

Key signs you may be behind — and why that’s common

You might be behind if you:

• Have saved little or nothing for retirement so far

• Have paused contributions for several years

• Are relying heavily on home equity as your primary retirement plan

• Are unsure how much income your savings could generate

• Expect CPP and OAS to cover most of your expenses

These situations are common because many people focus on immediate financial needs – mortgages, education costs, family responsibilities – before long-term savings.

The good news is that peak earning years in your late 40s and 50s can create meaningful opportunities to accelerate progress.

Benchmarks vs. reality: what averages don’t tell you

You may have seen headlines that suggest you “should” have two, three or five times your salary saved by a certain age. Benchmarks can be useful reference points, but they don’t account for realities such as:

• Career breaks

• Divorce or family transitions

• Supporting children or parents

• Starting a business

• Paying down significant debt

Averages also don’t reflect regional differences in housing costs or lifestyle expectations.

Instead of comparing yourself to a general statistic, focus on your personal cash flow, your assets and your timeline to evaluate your retirement readiness effectively. Retirement planning is individual – it’s not a competition.

Tools that can help estimate retirement income

If you’re unsure where you stand, simple tools can provide clarity.

• Online calculators and tools can project retirement savings and the income they could generate

• Your My Service Canada Account lets you review CPP estimates

• Workplace retirement savings programs typically offer projections

• A financial advisor can provide a detailed retirement income projection

Even a basic projection can answer critical questions, such as:

• What might my monthly income look like?

• Where are my potential shortfalls?

• How much more would I need to save annually to close the gap?

• How would working a few extra years change the outcome?

Once you understand the numbers, you can make informed adjustments. Clarity can go a long way to reducing anxiety and chasing away the unknown.

How to catch up on retirement savings if you started late

If you delayed your retirement savings, a focused strategy can help you catch up on retirement savings and stay on track.

Increasing contributions in your peak earning years

Many Canadians reach their peak earning potential in their late 40s and 50s. That creates a valuable opportunity to accelerate retirement savings, by:

• Increasing RRSP or TFSA contributions when income rises

• Making RRSP catch-up contributions using unused contribution room

• Redirecting bonuses or raises toward long-term savings

• Automating monthly contributions to simplify saving over time

• Using tax refunds to fund retirement accounts

Even small contribution increases of 2-3% can have a meaningful impact over 10-15 years, especially when combined with investment growth.

Making smarter use of RRSPs and TFSAs

If you started saving later, maximizing tax efficiency becomes even more important – and where RRSPs and TFSAs can really shine for you.

RRSPs can:

• Reduce taxable income today

• Provide tax-deferred growth

• Be particularly valuable in higher earning years

TFSAs offer:

• Tax-free growth

• Flexible withdrawals

• No impact on income-tested benefits like OAS

Strategically using both accounts can strengthen your retirement planning strategy – especially if you have unused contribution room available.

Adjusting expectations without giving up peace of mind

Catching up can also involve adjusting timelines or expectations.

For instance, you might consider:

• Planning for a slightly later retirement date

• Reducing planned discretionary spending

• Considering part-time work in early retirement

• Exploring different housing options

Ways to catch up on retirement savings

Strategy	How it Helps
Increase contributions	Builds savings faster
Use unused RRSP room	Accelerates tax-deferred growth Reduces taxable income today
Delay taking CPP	Increases guaranteed income through retirement
Work for 2-3 more years	Reduces the number of years your savings need to last

Progress in your 40s, 50s or early 60s can still make a meaningful difference. Your runway may be shorter than it once was, but it’s certainly not gone.

Should you delay retirement?

Delaying retirement can help if you’re behind on savings, giving you more time to contribute, you’re your investments. Indeed, retirement today doesn’t have to mean a full stop. Increasingly, it looks like a transition – one that blends financial security with personal fulfillment. And for some, that “second act” becomes one of the most satisfying chapters of their lives.

Delaying retirement vs. phased retirement

Delaying retirement by even two to five years can meaningfully strengthen your financial picture. It may:

• Give you more time to save

• Shorten the number of years your saving need to support

• Increase CPP benefits

• Provide continued access to workplace benefits

Phased retirement looks a little different. Reducing hours, contract work or shifting responsibilities can create breathing room while maintaining income. It can offer a gradual transition emotionally, which you might find valuable.

Part-time work in retirement

For some Canadians, part-time work in retirement provides more than financial support, offering a sense of purpose, structure, social connection and intellectual stimulation.

This second act might be mentoring, starting a business, teaching, freelancing or working in a field you’ve always wanted to pursue.

Timing CPP and OAS strategically

Another powerful lever is timing government benefits.

• CPP can be taken as early as age 60 or delayed up to age 70. Delaying increases your monthly payment permanently.

• OAS can begin at 65, with increases for deferral up to age 70.

For those who can afford to wait, delaying benefits can create significantly higher guaranteed income later in life, which can reduce pressure on personal savings.

Debt, housing, and retirement planning

Retirement planning rarely happens in isolation – there are mortgages, lines of credit, credit cards and other financial obligations to consider.

Pay down debt or save for retirement first?

The answer to one of the most common financial planning questions is this: it depends. It depends on the type of debt you have and your financial flexibility. Having said that, in many cases, a balanced approach works best.

If you’re carrying high-interest debt, prioritizing repayment is usually the most effective first step. The interest savings often outweigh potential investment returns.

If your debt is lower-interest, such as a mortgage, you may be able to continue contributing to retirement savings while making structured payments.

The questions to ask yourself are:

• What is the interest rate on my debt?

• Am I contributing enough to capture employer matching?

• Do I have a clear timeline for repayment?

• Will I realistically have this debt in retirement?

Entering retirement with manageable or eliminated high-interest debt can reduce stress and lower the income you’ll need later.

Mortgage considerations in your 50s and 60s

Many Canadians approach retirement still carrying a mortgage. Ideally, your housing costs are predictable and affordable by retirement. That might mean accelerating mortgage payments in peak earning years, refinancing strategically or planning your retirement timing around the payoff of your mortgage.

Being mortgage-free isn’t a requirement for retirement, but knowing whether your projected income can comfortably support your housing costs can make them easier to plan for.

Downsizing, renting, or staying put

Housing is often the largest asset – and the largest expense – in retirement planning. You may be thinking about downsizing or relocating to a lower-cost area to free up equity, or to rent to simplify maintenance and expenses. Or, if your home is affordable and suits your long-term needs, you may be planning to stay put.

There’s no universal correct choice. The right choice balances financial flexibility with your lifestyle preferences. What matters more to you? Additional retirement income or stability and familiarity?

When to get help with retirement planning

You don’t have to navigate retirement planning by yourself, especially if the numbers feel unclear.

Signs you could benefit from professional advice

You might benefit from speaking with a financial advisor if:

• You’re unsure whether you’re on track

• You don’t know how much income your savings could generate

• You’re deciding when to take CPP or OAS

• You’re balancing debt repayment with retirement contributions

• You’re within 5-10 years of retirement

• You’re feeling anxious about making a wrong move

An advisor can help turn your uncertainty into a structured plan – and a roadmap to follow.

What a retirement plan can clarify

A retirement plan can help you calculate savings targets, but it can also help answer the key questions you might have about your retirement. Questions like:

• When can I realistically retire?

• What would happen if I worked two more years?

• How much can I safely spend each year?

• How should I draw income from different accounts?

• How do I reduce taxes in retirement?

When you can see your future income mapped out, even under different scenarios, it can reduce emotional stress. After all, retirement readiness is so much more than numbers – it’s having a clear strategy and the flexibility to adjust it as life evolves.

If you’ve ever felt behind on retirement savings, you’re not alone – and you’re not out of options.

With a clear picture of your income sources, a realistic savings plan and a timeline that reflects your goals, retirement can feel far more manageable than it once did.

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