BMO Retirement Survey: Over Three Quarters of Canadians Worry They Will Not Have Enough Retirement Savings Amid Inflation

• Canadians believe they need an average of $1.54 million for retirement
• Roughly two thirds (63%) say rising prices are affecting their ability to save for retirement
• Annual Registered Retirement Savings Plan (RRSP) contributions reach record high of $7,447

TORONTO, Feb. 12, 2025 /CNW/ - BMO's 15^th annual Retirement Survey reveals several key insights into how Canadians feel about their retirement savings. The survey finds over three quarters of Canadians (76%) are worried they will not have enough money in retirement because of rising prices. The survey also finds 63 per cent of Canadians believe rising prices over the past 12 months have limited their ability to save for retirement. On average, Canadians surveyed believe they will need just over $1.54 million to retire, down from $1.67 million in 2023.

Annual RRSP Savings Hit Record High, according to BMO Retirement Survey (CNW Group/BMO Financial Group)

Amid inflationary concerns, 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 – a 14 per cent increase over last year ($6,512) and above the pandemic high-water mark set in 2021 ($6,822).

Annual RRSP Savings Hit Record High, according to BMO Retirement Survey

"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, BMO Private Investment Counsel. "For Canadian investors, one of the best ways to make financial progress and stop rising prices from eroding retirement savings over the long term is to have a portfolio designed to mitigate inflationary pressures, while also taking other factors like investment time horizon and risk tolerance into account. Investors may also want to consider speaking with an investment advisor when looking for ways to help reduce the impact of inflation on their portfolio."

Among the 63 per cent of Canadians who say rising prices are limiting their ability to save for retirement, the top four ways they are adjusting their financial planning are:

• Cutting other spending to maintain current retirement savings levels
• Putting less into retirement savings
• Planning on working longer
• Putting off retirement savings completely

"Inflation is a major concern for Canadians, and the spike in prices as the economy emerged from the pandemic is a stark reminder rising prices can affect spending, investment and savings plans," said Robert Kavcic, Senior Economist, BMO. "Inflation should always be a major consideration when saving and investing for retirement and if investors have concerns about how rising prices may impact their retirement savings, it may help to seek guidance from a financial professional."

Helpful Retirement Tips

For Canadians thinking about how much money they may need for retirement and how to maximize their RRSP savings, BMO offers the following retirement planning tips:

• Start planning early: Outlining retirement objectives and long-term financial goals can determine the appropriate investing and savings solutions to incorporate in a retirement plan.
• Practice discipline: Manage spending, review budgets and include continuous savings plans as an expense. Monitoring spending with a monthly budget will allow flexibility to suspend or decrease the continuous savings plan when needed, or increase the amount when a budget allows for it.
• Contribute securities to an RRSP: RRSP contributions do not have to be made in cash; securities may be deposited in any qualified RRSP investment already owned in an RRSP instead of cash. This is called an "in-kind' contribution or transfer.
• Seek professional advice: A professional advisor has the resources and expertise to monitor a retirement portfolio regularly and recommend investing and savings strategies based on financial circumstances, aversion to risk and long-term financial goals.

For more on RRSP Savings Tips and Strategies, click here.

Study Methodology

This study was conducted by Pollara with an online sample of 1,500 adult Canadians aged 18 years and above.  This research was conducted from November 8th to 18th, 2024. While margin of error cannot be calculated on a non-probability sample, for comparison purposes, a probability sample of 1500 respondents would have a margin of error of ±2.5%, 19 times out of 20.

Disclaimer

This message is for information purposes. The information contained herein is not, and should not be construed as, investment, tax or legal advice to any party. Investments should be evaluated relative to the individual's investment objectives, risk tolerance and professional advice should be obtained with respect to any circumstance.

About BMO Financial Group
BMO Financial Group is the eighth largest bank in North America by assets, with total assets of $1.41 trillion as of October 31, 2024. Serving customers for 200 years and counting, BMO is a diverse team of highly engaged employees providing a broad range of personal and commercial banking, wealth management, global markets and investment banking products and services to 13 million customers across Canada, the United States, and in select markets globally. Driven by a single purpose, to Boldly Grow the Good in business and life, BMO is committed to driving positive change in the world, and making progress for a thriving economy, sustainable future, and inclusive society. 

SOURCE BMO Financial Group

Media Contact: Aaron Sobeski, Toronto, [email protected], [phone]