Guide
How much do you need to retire in Canada?
Reviewed by The Retirement Beast editorial team · figures verified against CRA / Service Canada · Updated
There is no single magic number — but there is a clear way to find yours. Start with your spending, subtract the inflation-indexed income CPP and OAS will provide, and size your savings to cover the rest.
Check your readinessStart with spending, not a savings number
The right way to answer “how much do I need?” is to work backwards from the annual after-tax spending you want in retirement. A common rule of thumb is 70–80% of pre-retirement income, but your real figure depends on your mortgage status, lifestyle, and health. Estimate the yearly number first — everything else follows from it.
Subtract CPP and OAS (they do a lot of the work)
CPP and OAS are guaranteed, inflation-indexed income for life, so they directly shrink the amount your own savings must produce. A middle earner might receive $15,000–$25,000/year combined from CPP and OAS. If you want $55,000/year and benefits cover $22,000, your portfolio only needs to fund the remaining ~$33,000 — a much smaller target than the full spend. See average & maximum CPP and OAS amounts.
Size the portfolio: the 4% rule (÷ 0.04, or × 25)
To turn the remaining spending into a savings target, a common starting point is the 4% rule: divide the spending your savings must cover by 0.04 (equivalently, multiply by 25). In the example above, ~$33,000 ÷ 0.04 ≈ $825,000. The 4% rule is a guideline, not a promise — it can be too aggressive for a very long retirement or a poor run of early returns, and too conservative for a shorter one.
Pressure-test the number
A single target assumes steady returns and an average lifespan. Two risks break that assumption: longevity (living longer than planned) and sequence-of-returns risk (poor returns early in retirement). Stress-test your plan against both:
- Use the readiness calculator for a quick on-track / tight / gap read.
- Use the cash-flow projection to see, year by year, what age your money lasts to.
- Use the Monte Carlo stress test to see your success probability across hundreds of market scenarios.
Levers if the number looks big
- Retire a little later — more saving, fewer years to fund, and larger CPP/OAS if you delay them.
- Delay CPP/OAS — turns savings into a larger guaranteed cheque (see when to take CPP).
- Trim target spending — even a small reduction lowers the required portfolio by 25× that amount.
- Withdraw tax-efficiently — the withdrawal order can stretch the same savings further.
Frequently asked questions
How much money do I need to retire in Canada?
A common rule of thumb is 70–80% of your pre-retirement income per year, and a portfolio of roughly 25× the spending your own savings must cover (after CPP and OAS). But the honest answer depends on your spending, longevity, and government benefits — model it rather than trusting one number.
What is the 4% rule?
The 4% rule suggests you can withdraw about 4% of your portfolio in the first year of retirement (rising with inflation) with a low risk of running out over ~30 years. It is a starting-point guideline, not a guarantee — sequence-of-returns risk and longevity matter.
Do CPP and OAS reduce how much I need to save?
Yes, significantly. CPP and OAS are inflation-indexed lifetime income, so you only need your own savings to cover the spending they do not. That is why the savings target is based on your gap, not your total spending.
Is $1 million enough to retire in Canada?
For many middle-income Canadians, a $1 million portfolio plus CPP and OAS supports a comfortable retirement — but it depends entirely on your spending, retirement age, and longevity. Run your own numbers.