If you’re 45 and starting to seriously think about retirement, you’re asking the right question — but you may not like the answer. How much do you need right now to retire comfortably at 65? The truth is, there’s no single magic number.
Still, that doesn’t mean you’re flying blind. With some realistic assumptions and smart investing, you can get surprisingly close to a workable target.
Many financial planners suggest retirees aim to replace about 70% of their pre-retirement income. But that’s just a starting point. Your actual number depends on lifestyle choices, health, where you plan to live, and how effectively you invest over the next 20 years.
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Lifestyle, health, and location matter
The biggest variable in retirement planning is lifestyle. A retirement filled with frequent travel, dining out, and supporting adult children will require far more savings than a simpler, home-centred lifestyle. Even small differences — like owning your home outright versus renting — can shift the numbers dramatically.
Health is another often underestimated factor. While Canada’s healthcare system covers many essentials, out-of-pocket costs for prescriptions, dental care, and long-term care can add up quickly. Planning for a margin of safety here is wise.
Then there’s location. Retiring in Toronto or Vancouver typically requires a larger nest egg due to higher housing and everyday living costs. Downsizing or relocating to a lower-cost province can materially reduce the income you’ll need in retirement.
What the numbers say
According to Statistics Canada, the median employment income for Canadians aged 45-54 was $64,900 in 2023. Using the 70% rule, that translates to about $45,430 per year in retirement income.
Now factor in government benefits. The Canada Pension Plan (CPP) and Old Age Security (OAS) will likely cover a meaningful portion of that income, depending on your contribution history and when you start benefits. That means your personal savings — Registered Retirement Savings Plans, Tax-Free Savings Accounts, and non-registered investments — don’t need to do all the heavy lifting, but they still need to be substantial.
The Government of Canada’s Canadian Retirement Income Calculator is a useful tool for pulling these pieces together. It allows you to model different contribution levels, retirement ages, and retirement savings. Most people quickly discover that compounding over the next 20 years will matter far more than trying to “catch up” later.
Turning today’s savings into tomorrow’s income
At 45, one of the most powerful moves you can still make is boosting your income — especially income that doesn’t rely entirely on your time. That’s where dividend investing can shine.
A diversified portfolio of high-quality Canadian dividend stocks can provide growing income and inflation protection over time. One prime example is Canadian Natural Resources (TSX: CNQ). The company has navigated multiple energy cycles while maintaining a roughly 25-year streak of dividend increases.
At around $46 per share, CNQ offers a dividend yield of approximately 5.1%. Its trailing-12-month payout ratios — about 58% of free cash flow and 71% of net income — suggest the dividend remains well supported. Importantly, its dividend growth rates over the past three, five, and 10 years (14.9%, 22.6%, and 17.7%) highlight how growing income today can meaningfully support retirement tomorrow.
Investor takeaway
There’s no universal number for how much a 45-year-old Canadian needs to retire at 65, but direction matters more than precision. Understanding your lifestyle goals, accounting for the Canada Pension Plan and Old Age Security, and investing consistently — particularly in income-generating assets — can put retirement well within reach. The earlier you align your plan with reality, the more control you’ll have over your future.
