BMO Says Canadians Need $1.7 Million to Retire: Your Number Could Be Very Different

BMO says Canadians need $1.7 million to retire, but your number may differ. See how CPP and OAS cut the gap and find your own target.

Aditya Raghunath

Aditya Raghunath joined the Motley Fool Canada team in 2019 and has close to seven years of experience in covering publicly-listed companies. With a post-graduate degree in finance, Aditya aims to educate and engage Canadians by writing extensively about growth, dividend, and value stocks. If you are considering investing in the stock market, he recommends reading The Intelligent Investor by Benjamin Graham before taking the plunge.

Published October 20, 4:50 pm EDT

Earlier this year, Bank of Montreal released its annual retirement survey, which found that Canadians say they need about $1.7 million to retire comfortably. This number has risen from $1.35 million in 2019 and $1.54 million in 2024.

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Why the retirement number differs across Canada

However, retirement numbers are higher in British Columbia ($2.2 million) and Ontario ($1.9 million). Comparatively, they were lower in Atlantic Canada ($928,000) and Quebec ($1.2 million).

Your own number depends on a few things:

The lifestyle you want
Where you live
Whether you will still carry a mortgage or pay rent
Whether you have a workplace pension
How much income you receive from the CPP and OAS

How much do CPP and OAS pay in 2026?

The Government of Canada says the maximum Canada Pension Plan (CPP) retirement pension at 65 is $1,507.65 a month for benefits starting in 2026. For new beneficiaries, the average CPP is much lower at $858 a month.

To receive the maximum OAS payment, you need 40 years of residence in Canada after age 18. In October 2026, the maximum OAS payout is about $762.50 for residents aged 65–74.

Here is the math, based on those government figures:

Maximum CPP plus maximum OAS: about $2,270 a month, or roughly $27,200 a year
Average new CPP plus maximum OAS: about $1,620 a month, or roughly $19,400 a year

Notably, higher income retirees can face an OAS clawback. Still, these pension payments rise with inflation and can cover a sizeable portion of your retirement expenses.

Are Canadians saving enough for retirement?

BMO found that:

28% of Canadians save less than 5% of their income, while 38% save between 5% and 10%.
Only 21% save more than 10% of their income.
Moreover, 10% save less than $100 a month, and only 12% save more than $1,000 a month.
14% of those still working never plan to retire. This means they will work part-time or become freelancers.

Even a modest income in your 60s will mean smaller withdrawals from your total savings.

How to find your own retirement number in four steps

Canadian retirees can estimate their individual retirement number in three easy steps.

Estimate your yearly spending: Include expenses for housing, healthcare, and travel.

Subtract guaranteed income: Log in to your My Service Canada Account for a CPP estimate. Then add OAS and any workplace pension.
Fund the gap: Use your RRSP (Registered Retirement Savings Plan), Tax-Free Savings Account (TFSA), and other investments to cover the rest.

Say an individual’s annual retirement expenses are $50,000, and they receive $20,000 from OAS and CPP. So, the retirement gap is $30,000 a year, which registered accounts such as the RRSP and TFSA must fund.

Basically, multiply the retirement gap by 25% (according to the 4% rule), which means the registered account should hold $750,000, much lower than the $1.7 million figure cited in the BMO survey.

Even if your annual retirement expense is $75,000 and your retirement gap is around $50,000, you will need $1.25 million in retirement savings.

Why Canadian banks are betting big on retirement advice

Say you have run the numbers and found your retirement gap. So, what’s next?

For millions of Canadians, the answer starts at their bank. Toronto-Dominion Bank (TSX: TD) says it serves about one in every three Canadians, even as management believes it has underinvested in frontline distribution.

In Canada, TD plans to add 1,200 wealth advisers and 835 business bankers. It is also placing 1,000 specialists in branches, split equally between mortgages and investing.

The 500 mortgage specialists and 500 investment specialists already on the job are producing three times what generalists do. He called the whole hiring push “like doing an acquisition.”

A bank does not hire at this pace unless customers are asking for help and retirement sits near the top of that list.

TD’s Leo Salom, head of U.S. Banking, also said the bank will add 450 advisers south of the border next year.

The Foolish takeaway

Knowing your gap is step one. Step two is putting your savings to work in businesses built to pay you for years. Build a diversified portfolio across asset classes to consistently outpace inflation.