Saving for retirement often gets delayed as other things take priority. In a high-inflation environment, the dream of buying a house eats up almost all your income. In such a situation, by the time you think of retirement, it is too late.
Ideally, retirement savings should begin at least 20 years before retirement, as it gives you room to make mistakes and revive your portfolio. If you only have 10 years left, you can still catch up on retirement savings. You will have to stay focused and put all your efforts into savings.
How much do you need to retire?
While you can’t bring back the lost time, you can make the most of what you have. If you are 50 and starting retirement savings, it is time to set realistic goals.
Look at your current salary, necessary expenses, and increase the latter by 5% annually to adjust for inflation. This growth could be higher depending on your standard of living. Suppose your necessary expenses are $40,000 a year, or $3,333 a month. Your expenses may grow to $65,000/year, or $5,400/month, in 10 years at 5% rate.
Even if you haven’t saved up for retirement, the Canada Revenue Agency pays the Old Age Security (OAS) pension when you turn 65. You can get the maximum amount if your previous year’s taxable income is below a certain threshold.
The CRA declares the maximum OAS every quarter from July to June after adjusting for inflation. The July to September 2025 OAS is $734.95 per month, which you can receive if your 2024 taxable income is below $90,997. The OAS can take care of 20–22% of your retirement needs.
If you have contributed to the Canada Pension Plan (CPP), it can take care of another 20% of your retirement needs.
Even if you are starting late, you have to focus on saving for 60% of your retirement needs. Considering the $65,000 annual passive income needed by 2035, you need to save for $39,000 in passive income.
Playing catch-up on retirement savings?
While nothing can beat the power of compounding in the long term, you can play catch-up by maxing out on a Registered Retirement Savings Plan (RRSP) up to your tax liability. For 2025, you can invest 18% of your 2024 earned income or $32,490, whichever is lower. If your tax liability is $20,000, you can invest that much in an RRSP and save up on taxes.
Also consider maxing out on a Tax-Free Savings Account (TFSA) contribution as the withdrawals are tax-free and will not affect your OAS amount, which starts reducing after a certain income threshold. Contributions to a TFSA are made from after-tax income, and the 2025 limit is $7,000.
Diversify investments in growth stocks
Even if you are contributing a significant amount to retirement savings, 3–4% interest on bonds and term deposits will not meet your needs. You should diversify your investment in stocks, preferably in growth stocks and dividend growth stocks.
A growth stock to boost retirement savings
Topicus.com (TSXV:TOI) has the potential to double your money in five years and keep doing so even after you retire. The company grows its share price by reinvesting its free cash flow (FCF) to acquire software companies with sticky and recurring cash flow from maintenance fees. The reinvestment creates a compounding effect and keeps growing its FCF. Its net income will keep fluctuating due to one-off expenses or interest on debt. These expenses will reduce as the acquired companies improve operating efficiency.
You should focus on revenue and FCF growth, as their growth will drive the enterprise value and share price. The company has grown its revenue at an average annual rate of 19%. Now is a good time to buy this stock as it is oversold after a strong rally in the first half.
The stock has grown 173% in the last four and a half years, converting a $25,000 investment in February 2021 to $62,257 in August 2025. It can maintain or even accelerate this growth in the coming 10 years.
Even after you retire, you can keep a portion invested in this stock, allowing it to continue growing your retirement savings.
