The savings target Canadians set for retirement keeps climbing. The contribution rates behind most group plans have not.
A new survey from BMO Financial Group puts a striking number on Canadian retirement: people now believe they need an average of $1.7 million to retire comfortably, up from $1.54 million in 2024. More than one in three say they doubt they will get there.
The expectation is climbing. The behaviour is not. Twenty-eight per cent of Canadians save less than 5% of their income for retirement, and another 38% save between 5 and 10 per cent. In monthly terms, roughly a third set aside under $500. The target moved. The contribution rate stayed put.
That gap matters most for the generation closest to the finish line. Twenty-seven per cent of working baby boomers say they do not plan to stop working at all, alongside 20% of generation X. For some this reflects choice. For many it reflects math.
The numbers at a glance
- $1.7M: the average amount Canadians believe they need to retire, up from $1.54M.
- 1 in 3 Canadians doubt they will reach it.
- 28% of Canadians save less than 5% of their income for retirement.
- 27% of working boomers say they won't stop working.
Does this match how group plans are built?
Not quite. Most corporate RRSP and group plans are designed around modest defaults: a 3–5% member contribution, an employer match capped at a similar level, and a single default investment fund. Those settings are excellent at getting people started. They were never built to close a $1.7 million gap on their own.
The data points to a design problem, not a willpower problem. If a plan's default lands a member near 5%, the plan is quietly endorsing the exact savings rate this survey flags as inadequate.
Three shifts worth considering
- Raise the default. Auto-escalation that nudges contributions up 1% a year, with an easy opt-out, lifts outcomes without asking members to lift a finger.
- Reframe the match. Position the employer match as the highest-return financial decision a member will make all year, not a line on a statement.
- Fund the decumulation conversation. The boomers planning to keep working need advice on drawing income, not just on accumulating it.
One national plan, very different retirements
Regional spread sharpens the point. British Columbians peg their number at $2.2 million while Atlantic Canadians sit at $928,000. A single national plan is quietly serving very different retirement realities at once.
The encouraging part: the group plan is the most powerful lever an employer holds here. Small design changes, applied by default, compound into very different outcomes. This survey is less a warning than a prompt. Revisit the defaults before members are forced to revisit their retirement dates.
Prepared by Sterling Brokers, for discussion purposes only; not financial advice.
