How Much Should I Save for Retirement in Ontario?

The amount you need to save for retirement in Ontario depends on your expected spending, your government benefits, and how long your retirement lasts — not on a single magic number. A reasonable starting framework is to target 70–80% of your pre-retirement income, but your actual number could be higher or lower depending on your lifestyle, debt situation, and what you plan to do in retirement.

The Income Replacement Framework

Most retirement planning starts with an income replacement ratio: how much of your working income do you need to maintain your lifestyle in retirement?

For many Ontarians, 70–80% is a reasonable target. In retirement, you typically stop contributing to savings, your mortgage may be paid off, and commuting or work-related costs disappear. However, leisure spending, travel, and healthcare often increase — especially in the early years.

Here is a rough illustration:

• If you earn $100,000/year pre-retirement and target 75% replacement, you need $75,000/year in retirement income.
• CPP at 65 currently averages around $8,000–$9,000/year for many Canadians (the maximum is around $17,400 as of recent years, but few receive the max).
• OAS adds roughly $8,500/year at age 65.
• Combined, that is roughly $16,500–$26,000/year from government sources — leaving a gap of $49,000–$58,500/year that must come from your savings.

At a 4% withdrawal rate, covering a $55,000/year gap requires approximately $1,375,000 in personal savings. This is why retirement planning needs to be personalized — the gap between your spending and your guaranteed income determines how much you need to accumulate.

Common Savings Rate Benchmarks

If you want a rule of thumb for how much to save while working, financial planning guidelines commonly suggest saving 10–15% of gross income throughout your career. Some frameworks suggest 15–20% if you start later or have a more ambitious retirement timeline.

Age-based benchmarks that appear frequently include:

• By age 30: 1x your annual salary saved
• By age 40: 3x your annual salary saved
• By age 50: 6x your annual salary saved
• By age 60: 8–10x your annual salary saved

These are rough benchmarks, not guarantees. They assume a typical retirement at 65 and do not account for defined benefit pensions, inheritances, or significantly higher or lower spending patterns.

How Ontario-Specific Factors Affect Your Number

Ontario residents face some cost-of-living dynamics that matter for retirement planning:

• Housing costs: If you own in a high-cost market like Toronto and plan to downsize, that equity release can significantly reduce the savings you need from investments. London and surrounding areas tend to have more moderate real estate, which changes the equation.
• Provincial tax rates: Ontario's combined federal and provincial tax rates are among the higher ones in Canada. How your retirement income is structured — RRSP withdrawals, TFSA withdrawals, CPP, OAS, dividends — affects how much tax you pay and how far your savings go.
• Healthcare: Ontario's OHIP covers core medical needs, but dental, vision, prescription drugs, and paramedical services are not covered by default in retirement once you lose employer benefits. Budgeting for these is important.

Building Your Personal Retirement Number

The honest answer is that a generic savings target only gets you so far. To know whether you are on track, you need a retirement projection that factors in:

• Your current assets across RRSP, TFSA, and non-registered accounts
• Your expected CPP and OAS amounts (available from your My Service Canada account)
• Any pension income from employers
• Your realistic retirement spending, including healthcare and travel
• Your expected retirement age and longevity assumptions
• Tax-efficient drawdown strategies across your accounts

At Pineault Wealth Management in London, Ontario, Marc Pineault helps clients move beyond rough benchmarks and into plans they can actually rely on. Understanding your real retirement number — and the savings path to get there — is the foundation of every good financial plan.

If you want to know exactly where you stand and how to close any gap, reach out to book a consultation.

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This article is for educational purposes only and does not constitute personalized financial advice. Please consult a qualified financial planner before making any financial decisions.