How much money do you need for retirement? Millennials want more than $2M

Haven’t started saving for retirement? You might want to get planning as many Canadians believe they will need a lot of cash saved up for their golden years.

How much money it’s believed you’ll need when you’re retired actually depends on which generation you are a part of, according to the 2024 version of BMO’s Annual Retirement Survey.

“There is no one-size-fits-all retirement plan and no universal number when it comes to how much Canadians should be saving for retirement,” says Nicole Ow, Head of Retail Investments, BMO, in a release.

How much money will you need for retirement in Canada?

The survey from BMO suggests that millennials believe they are going to need more than $2 million in savings for when they leave their career behind.

According to the data, that is the highest among all adult generations.

Data from Annual Retirement Survey/BMO

The survey also revealed that, for a second consecutive year, Canadians overall believe they need about $1.7 million in retirement.

“We encourage people to start planning early and consider all the factors that will affect their ideal retirement lifestyle, including family obligations, health and wellness goals, hobbies and interests, and travel plans,” says Ow.

There is also a big gap in expectations between men and women in Canada, with men believing they will need to save a lot more to sustain their lifestyles once they exit the workforce.

BMO says that, on average, men estimate they need $2 million to retire, while women believe they need $1.3 million for retirement.

Are we well on our way to a well-funded retirement?

First, let’s look at when Canadians are planning to retire.

Age 55 is still considered the “ideal” retirement age according to BMO, but realistically, many of us will still be going to work in our 60s. The survey shows that the average age at which people plan to retire is 62 years old.

And Gen Z sure has some admirable goals for their older years, with many of them saying the ideal retirement age is 50.

Tinnakorn jorruang/Shutterstock

While many of us continue to add to our retirement fund, the data shows the rate at which we are contributing has slowed slightly since the COVID-19 pandemic.

High-interest rates and inflation are also having an impact on our savings, with about two-thirds of Canadians surveyed saying current economic conditions are negatively affecting their ability to save for retirement.

• 37% of Canadians said they are putting less money toward retirement savings
• 44% of Boomers said they are compensating for their reduced ability to save for retirement by working longer than they had planned
• 38% of Gen Z respondents said they are putting off saving for retirement completely

BMO’s survey also found RRSP account values have fallen from elevated levels measured over the previous two years.

The average amount held nationally was down almost one-third to $113,070 in 2023 compared to $144,613 in 2022.

Despite that, total account holdings are in line with historical averages.