Bank of Montreal in downtown Sarnia. February 20, 2019. (Photo by Colin Gowdy, BlackburnNews)Bank of Montreal in downtown Sarnia. February 20, 2019. (Photo by Colin Gowdy, BlackburnNews)

Canadians expect to need $1.7 M in retirement savings

BMO's 13th annual Retirement Study has found that Canadians are prioritizing retirement savings, with both contributions and account holdings having increased over the previous year.

BMO found Canadians expect to need $1.7 million to retire, up 20 per cent from the $1.4 million they projected for 2020. However, fewer than half, or 44 per cent, of Canadians think they will have enough money to retire as planned. That's down 10 per cent from 2020.

In 2022, buying power eroded for the majority of families because of an abrupt inflation increase that outpaced income growth.

According to BMO's Retirement Study, 74 per cent of Canadians are worried about how the economy as a whole, particularly inflation and rising prices, will influence their financial situation, and 59 per cent think this will make them less confident about achieving their retirement goals.

"While the anticipated headwinds in 2023 will understandably prompt concerns about how inflation and interest rates will affect our finances, Canadians remain resilient and are taking proactive measures to protect and invest in their retirement nest egg," said Nicole Ow, Head, Retail Investments, BMO. "As Canadians continue to look to save for retirement, working with a professional advisor can help them understand the investment opportunities available and make progress towards achieving their financial goals with confidence."

Nationally, $144,613 is the average amount invested in RRSPs, a two per cent  rise from 2021's $141,923. For the 2022 tax year, 43 per cent of Canadians have already made RRSP contributions, and another 14 per cent intend to do so by the March 1, 2023 deadline.

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