Average RRSP Balance By Age: Are You Saving Enough?

Key Takeaways

  • RRSP balances in 2023 reflect a return to normal savings levels.
  • Young Canadians need to start saving for retirement early.
  • Economic challenges impact the ability to save.

How Much Canadians Have Saved in RRSPs: A National View

Over recent years, Canadians have seen changes in their RRSP savings. The numbers saw a peak with savings at higher-than-usual levels during the pandemic. This was largely due to reduced spending and more contributions to RRSPs. Recently, the average RRSP value has levelled out to align with earlier levels before the pandemic.

Table: Average RRSP Holdings by Year

YearAverage RRSP Value ($)
2023$113,070
2022$144,613
2021$141,923
2020$112,295
2019$111,929
2018$101,155

The data shows that in 2023, the national average stood at $113,070, which is more in line with historical patterns. This shift indicates adjustments post-pandemic as Canadians adapt to changing economic conditions.

RRSP Savings by Age Group: What’s Typical and What’s Common

Savings in RRSPs vary widely by age. For a clearer picture, looking at both average and median values offers insight into retirement savings habits. Data from 2019 provides a useful snapshot.

Age GroupAverage Value (CAD)Median Value (CAD)
Under 35 years$41,000$12,500
35 to 44 years$82,100$30,000
45 to 54 years$150,300$70,000
55 to 64 years$216,900$100,000
65 years and older$224,000$100,000

The data suggests that while average values might appear substantial, median values provide a more realistic representation. For instance, those over 65 have a median savings that is notably lower than the average, indicating disparities influenced by higher earners.

Important Points to Consider

  • Difference in Savings Figures: The gap between average and median values is substantial, especially in older age brackets. This indicates that higher savings figures often skew averages.
  • Young Canadians Lagging: Under 35, there’s a notable difference between average and median, highlighting the need for younger individuals to prioritize saving.
  • Growth in Midlife: While savings improve between ages 35 to 54, median values remain lower than ideal for a secure retirement. Balancing expenses is key in this stage.
  • Pre-Retirement Planning Essential: Those nearing retirement (55 to 64) show an increase in median savings, but many are potentially underprepared without additional income streams.
  • Retired Individuals: Even with averages appearing decent, median savings suggest that many retirees could depend significantly on government aid.

Where RRSP Contributions Excel in Canada

Across provinces, RRSP strategies differ. Some places focus on maintaining large balances, while others prioritize annual contributions.

Provinces Leading in RRSP Contributions

  • Ontario has the highest account balances, showing a tendency towards long-term accumulation.
  • Atlantic Canada sees the highest yearly contributions, reflecting a different approach to growing retirement funds.

Table: Regional RRSP Holdings and Contribution Patterns (2022)

RegionAverage RRSP Value ($)Average Contribution ($)
National$144,613$7,058
Atlantic$127,814$8,115
Quebec$125,751$6,155
Ontario$162,913$7,435
Prairies$138,391$7,429
Alberta$157,405$7,054
B.C.$125,573$7,298

The variety in approaches underlines the diverse strategies Canadians adopt based on regional economic conditions and priorities.

Household Size and Their Influence on RRSP Contributions

Larger households often have higher RRSP contributions, likely due to combined resources. This trend is visible when looking at different household sizes.

For instance, couples show stronger contributions, benefiting from dual incomes. In contrast, solo households tend to contribute less.

Table: Contributions by Household Size

Household SizeTotal Households ContributingMedian Contribution ($)
1 Person877,380$3,560
2 People4.2 million$4,880

This pattern suggests the advantages of shared financial savings and planning among larger households, providing a stronger foundation for retirement savings.

RRSP Contributions Across Life Stages

Your approach to RRSP contributions will change as you age. No matter your age group, it’s smart to contribute regularly.

  • Younger Savers: Start small and aim for steady contributions to benefit from compound interest over time.
  • Middle Aged: Boost your savings as you earn more and reduce debts, preparing for larger needs later.
  • Nearing Retirement: Max out contributions to take advantage of tax benefits and secure diverse income streams for retirement.

Economic Challenges Impacting RRSP Savings

Current economic challenges can make saving more complicated. The rising cost of living and economic pressures are making it difficult to maintain consistent contributions.

Adopting strategies to adapt your savings plan can help. This means looking for areas to cut costs and adjusting financial goals to stay aligned with your retirement timeline. Regular reviews of your savings plan can keep it on track.

By staying informed and continuously adjusting your plan, you can navigate economic fluctuations and work towards a stable retirement.

Common Questions

What is the Average Yearly Contribution to RRSPs for Canadians?

Canadians usually set aside about $3,000 to $5,000 each year into their Registered Retirement Savings Plans (RRSPs). This may vary based on income and financial goals.

By Age 60, What Should Canadians Have Saved in Their RRSPs?

By the time you hit 60, aiming for an RRSP balance that stands at 6 to 7 times your annual salary is often suggested. This can help ensure a comfortable retirement.

How Much Do Canadians Save on Average by Age 25?

By 25, many Canadians have saved around $5,000 to $10,000. These savings can be in various forms, such as a savings account or an RRSP.

What is the Standard Employer RRSP Matching in Canada?

Many employers offer RRSP matching that ranges from 3% to 5% of your salary. This can substantially boost your retirement savings.

What Does the Average Canadian Save by Age 40?

By age 40, Canadians typically have accumulated around $80,000 to $100,000 in their savings, including RRSPs, TFSAs, and other accounts.

How Much Money Do You Need to Retire in Canada?

For a secure retirement in Canada, financial advisers often recommend having around $1 million. This amount can vary based on lifestyle preferences and retirement plans.

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AUTHOR

Christopher Liew, CFA

As the founder of Blueprint Financial, Christopher leads a team that creates personalized strategies tailored to your life and business goals—so you can secure your future and enjoy your dream lifestyle with confidence and ease.
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