Retirement Readiness Report — May 2025

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Canadians’ Preparation for Retirement (CPR) — Complete Report

This report updates the findings published in 2020 on Canadians’ financial readiness for retirement, now based on self-reported data collected in 2022. The analysis relies on simulations conducted using the stochastic version of the Canadians’ Preparedness for Retirement (CPR) calculator, a tool that incorporates economic uncertainty.

We find that:

If households’ intended retirement age and saving strategies are realized, 84% of working households aged 25 to 64 would be financially “prepared” for retirement.

Only 18% of these households have less than an 80% chance of being “prepared.” These results are very similar to those observed in 2018, despite the COVID-19 pandemic occurring between the two data collection periods.

The report also explores the effect of several variables on the preparedness rate. This effect remains generally limited in all cases, including:

  • selling the home at retirement;
  • returns on additional savings;
  • voluntary saving strategies;
  • slightly higher inflation up to retirement.

A household is defined as “financially prepared” if it can replace at least 65% of its net income in retirement (after taxes, transfers, savings, and debt payments), or 80% for households in the lowest income quintile.

Households considered “prepared” are more likely to be covered by defined benefit pension plans, earn lower average income, and expect to retire at a later age.

Using the stochastic version of the innovative Canadians’ Preparation for Retirement (CPR) calculator – which, for the purposes of this report, computes 25 simulations for each household and aggregates the results – this report on retirement preparedness finds the following core results, weighted using the 2016 Census.

  • If retiring at their intended age of retirement and converting all their financial wealth into annuities (which excludes business and housing equity) at that moment, 84% of Canadian households aged 25 to 64 years old in 2018 were on track to being prepared for retirement.
  • The average preparation index was 117 (which means that households would replace 117% of their pre-retirement consumption) but, as all averages do, this hides a wide variety of situations.
  • Lower income households are generally very well prepared – over 90% of households with an income per person below the median are projected to be “prepared”.
  • Unsurprisingly, households most at risk of being “unprepared” largely fall into the sub-group with higher-than-median income, but no RPP or savings; the average wage income of the group deemed “prepared” is significantly lower than that of the “unprepared” group. Those with DB RPPs are better prepared than average.
  • Probabilistically, the vast majority of households are almost certain to be “prepared”; a very small minority face dire prospects, while about 7% of households face a 35% to 65% probability of being prepared for retirement. Only 18% of households have less than an 80% chance of being prepared.
Click here to download PDF document:

Canadians’ Preparation for Retirement (CPR) — Complete Report

An online tool in open access is available at https://cpr.hec.ca. Developed by the RSI team with financial support from the National Pension Hub at the Global Risk Institute (GRI), it uses the CPR calculator to assess individual retirement preparedness by taking into account the future evolution of earnings, the returns on the various types of financial assets, and the prices of residential real estate.

Among others, the tool will be relevant to all persons and professionals interested in retirement preparation at the individual level.

The RSI CPR calculator in Python, developed with financial support from the Global Risk Institute, is available in open access. This version of the calculator allows for a batch use (for several individuals or households), to assess retirement preparedness for a group or a cohort.

To download, install and use it, consult the detailed technical documentation. The latter also provides a host of details regarding the calculator’s functioning. The June 2020 report also contains all the detailed, underlying working assumptions.