How to Save for Retirement

Tips for Making the Most of Your Retirement Savings

Check out our top tips to grow and maximize your retirement savings.

I’m Currently:

Have a plan.

If you’re new to saving and investing, creating a plan for retirement can feel overwhelming.. An advisor can take the guesswork out of choosing investments and help you create a realistic savings plan, so you know where you stand and how much you need to save.

Did you know? You can meet with an RBC advisor through video chat, by phone or in person to make a plan, talk strategy or to simply ask a question.

Be tax-savvy.

When it comes to saving for retirement, a Registered Retirement Savings Plan (RRSP) is a top choice for most Canadians. Here’s why:

Your contributions can be deducted from your total income in the year you make the contribution, reducing the amount of income tax you pay (tax is deferred until you withdraw the funds from your RRSP).
Deferring tax on your income allows you to contribute more into your RRSP, which allows it to grow faster. By the time you retire and withdraw the funds, you will probably be in a lower tax bracket than you are now while you are working and earning an income.

One thing to keep in mind—you can’t withdraw from an RRSP early without paying hefty penalty taxes (unless it’s for your first home1 or post-secondary education²). The good news is you can also open a Tax-Free Savings Account (TFSA), which lets you save for both retirement and other shorter-term goals. See how the RRSP and TFSA stack up.

Put your money to work.

Once you’ve opened an RRSP (and/or TFSA), make it work as hard as possible for you with regular, automatic contributions. By saving consistently (weekly, monthly, etc.) your money could grow faster over time.

You decide how much to save and how often—weekly, bi-weekly, monthly—it’s up to you
Contributions are automatically debited from your bank account (at RBC or another financial institution)
You can change how much you want to save, how often you contribute, and stop or pause your contributions at any time

Tip: Set your automatic contributions to coincide with every paycheque.

Putting just $50 per week in an RRSP adds up:

Try the RRSP Calculator now to see how quickly your money can grow.

The chart shows how $50 contributed weekly, earning a 6% rate of return, can grow to over $218,000 over 30 years. Calculations are for illustrative purposes only and are not intended to reflect future values or returns on investment from any mutual fund investment.

Start somewhere.

Feel like you can’t put much away right now? Start with what you have. Anytime you have extra cash (a tax refund, for example) you can always contribute more.

RBC client? Use NOMI Find & Save on the RBC Mobile app to help save money you didn’t know you had. It’s a free digital savings account that learns your transaction patterns, finds extra dollars in your cash flow and automatically moves them to savings. Once you have a little bit saved, you can contribute this amount to an RRSP!

Stay on track with MyAdvisor.

If you’re an RBC client, you’ve also got exclusive (and free) access to MyAdvisor, a digital service that can help you start saving for retirement and also help you stay on track.

MyAdvisor is a digital service that combines interactive planning tools and advice from a live advisor to help you be better prepared for retirement.

See what you have with more certainty. MyAdvisor shows you how you’re doing with powerful visuals and forecasts of your goals, net worth and cash flow.
Link outside accounts for a complete picture. Have savings and investments outside of RBC? MyAdvisor lets you quickly link them for an up-to-date look at your money.
Receive personalized advice. Meet with a live advisor through video chat, by phone or in person to review your retirement plan, talk strategy or to simply ask a question.
Make changes to your retirement savings plan at any time. Want to see a recommendation from your advisor or make a change to your plan? Simply log in to your MyAdvisor dashboard.
Stay on track toward your goal with email alerts. Progress alerts let you know whether you need to adjust the amount you are saving in order to reach your retirement goal.
Get started in a few simple, hassle-free steps. In minutes, you’ll have an idea of where you stand, see recommendations to help you grow your savings, and be able to book a one-on-one with an advisor.

Think about your ideal retirement.

Ask 10 people what they want to do in retirement and you’ll get 10 unique answers! As you get closer to retirement, consider what “being retired” means to you—and how you want to spend your time. For example:

Would you like to downsize and spend less time maintaining a house?
Would you enjoy spending the long Canadian winters down south?
Are there special things you would like to do for your family?

Having an idea of what retirement means to you will also help you to confirm that your savings line up with your expectations.

Need some inspiration? Check out Defining Your Retirement.

Do a financial health check.

Now is a great time to sit down with an advisor to check your numbers and talk through any concerns you have.

An RBC advisor can look at your income, expenses and debt to help you get a clearer picture of where you stand and what you need to do to reach your goals.

To estimate your income and expenses, try the Retirement Budget Calculator.

Based on a 2019 RBC Poll, 71% of retirees with a financial plan say they are enjoying retirement life and all that goes with it—only 54% of retirees without a plan feel the same way⁵.

Understand your income options.

It’s good to know what you can expect to receive from each of your retirement income sources and have a strategy for how (and when) you should tap into them once you stop working. An RBC advisor can help you:

Decide whether to delay applying for the Canada/Quebec Pension Plan (CPP/QPP) and Old Age Security (OAS) to benefit from increased payments later
Determine your options for receiving payments from an employee pension plan, if you have one
Maximize the income from your RRSP and TFSA—and decide when to convert your RRSP to a Registered Retirement Income Fund (RRIF) or annuity

For details, see: Where Will My Retirement Income Come From?

Adjust your plan as needed.

Have some catching up to do with your savings? Now is the time to do it. As long as you’re earning employment income, you can continue building your RRSP savings. Keep these tips in mind:

If you aren’t already, max out your RRSP contribution to help reduce your income taxes and allow your money to work as effectively as possible.
Pay yourself first and increase your opportunity for returns by setting up automatic weekly, bi-weekly or monthly contributions into your RRSP.

You decide how much to save and how often—weekly, bi-weekly, monthly—it’s up to you
Contributions are automatically debited from your bank account (at RBC or another financial institution)
You can change how much you want to save, how often you contribute, and stop or pause your contributions at any time

Tip: Set your automatic contributions to coincide with every paycheque.

Are you less focused on growth and more interested in preserving what you have right now? Ask an advisor if it makes sense to revisit your investments.

Stay on track with MyAdvisor.

If you’re an RBC client, you’ve also got exclusive (and free) access to MyAdvisor, a digital service that can show you how you’re progressing towards retirement and also help you stay on track.

MyAdvisor is a digital service that combines interactive planning tools and advice from a live advisor to help you be better prepared for retirement.

See what you have with more certainty. MyAdvisor shows you how you’re doing with powerful visuals and forecasts of your goals, net worth and cash flow.
Link outside accounts for a complete picture. Have savings and investments outside of RBC? MyAdvisor lets you quickly link them for an up-to-date look at your money.
Receive personalized advice. Meet with a live advisor through video chat, by phone or in person to review your retirement plan, talk strategy or to simply ask a question.
Make changes to your retirement savings plan at any time. Want to see a recommendation from your advisor or make a change to your plan? Simply log in to your MyAdvisor dashboard.
Stay on track toward your goal with email alerts. Progress alerts let you know whether you need to adjust the amount you are saving in order to reach your retirement goal.
Get started in a few simple, hassle-free steps. In minutes, you’ll have an idea of where you stand, see recommendations to help you grow your savings, and be able to book a one-on-one with an advisor.

Understand all your income options.

You’ve probably started withdrawing money from at least one of your income sources. These could include the Canada/Quebec Pension Plan (CPP/QPP), Old Age Security (OAS), an employer pension, Registered Retirement Savings Plans (RRSPs) and non-registered investments.

You may also be considering other ways to fund your retirement, such as:

Moving and downsizing your home
Working part-time in retirement
Borrowing using the equity in your home

Making sense of all your options can be overwhelming, so don’t be afraid to ask for help! An RBC advisor can look at all your income sources and help you make the most of each one.

Have an income withdrawal strategy.

Knowing where to take income from first is one of the top issues that retirees struggle with. Having a strategy is important though because withdrawals can impact your eligibility for government benefits and the amount of taxes you pay.

Consider this example, which shows how different kinds of distributions from your investments can be taxed at different rates:

Since income strategies can be complex—and different for everyone—it’s best to talk to an advisor and tax professional about your unique situation.

If you haven’t already, you also need to decide what to do with your RRSP by the end of the year in which you turn 71, which is when you need to convert it to an income option such as a Registered Retirement Income Fund (RRIF) or annuity.

Try the RRIF Calculator to estimate your withdrawal.

Split or share pension income to save on taxes.

If you or your spouse/common-law partner is in a higher tax bracket than the other, and one of you receives pension income, you could reduce your taxes by allocating up to 50% of that income to the spouse in a lower tax bracket. For some couples, the savings can be significant!

You may also be able to save on taxes by sharing Canada Pension Plan (CPP)/Quebec Pension Plan (QPP) benefits with a lower-income spouse/partner.

Keep adding to your TFSA.

Don't need all of your RRIF withdrawal or have other excess retirement income? You can contribute these amounts to a Tax-Free Savings Account (TFSA)—assuming you have the contribution room—so that your money has the opportunity to keep growing tax-free.

Unlike an RRSP, you don't need to earn any employment income to contribute and you don't have to stop adding to it at a certain age.
Unlike RRIF withdrawals, TFSA withdrawals are tax-free.
Income you earn in your TFSA and withdrawals from it do not affect your eligibility for government benefits, including Old Age Security (OAS) and the Guaranteed Income Supplement (GIS) or tax credits such as the Age Credit.

Create an estate plan.

Estate planning is not just for the wealthy—in fact, it can be just as important as retirement planning!

An estate plan helps you to pass on your assets to the people and causes you care about—quickly and tax-effectively. Without one, there could be extra fees, taxes and delays when your assets are distributed to your loved ones and you will not have control over how those assets are handled.

To keep reading about this important topic, see What is Estate Planning and Why Does It Matter? and Balancing Retirement with Your Legacy.

Tools and Resources

Retirement Planning Hub

Access a wealth of information to shape and fine-tine your retirement plan today.

Learn More

FAQs on Retirement Planning

How much money do I need to retire?

The answer to this question will be different for everyone. For example:

How much savings (and debt) do you have now? How are your investments performing?
What kind of lifestyle do you want in retirement? Do you want to travel the world—or start a new part-time career?
Will your mortgage and other debt be paid off?
When do you want to retire—and how much time do you have left to save?

Working with an advisor or financial planner is the best way to understand how much you’ll need to reach your unique goals.

RRSP vs TFSA. What’s the difference?

When it comes to saving for retirement, a Registered Retirement Savings Plan (RRSP) is a popular choice for most Canadians. A Tax-Free Savings Account (TFSA) can also be used to save for retirement, but it gives you the flexibility to save for shorter-term goals, too.

Here are a few ways the RRSP and TFSA stack up:

Your savings in an RRSP grow tax-deferred while your savings in a TFSA grow tax-free.
RRSP contributions are tax-deductible, helping you to pay less tax in your earning years. TFSA contributions are not tax-deductible.
Your RRSP contribution limit is based on your employment income. You can continue to contribute to your RRSP so long as you have contribution room available. With a TFSA, you can contribute even if you aren’t working and earning.
You can’t keep saving in your RRSP after age 71—a TFSA lets you make contributions for life.
Withdrawals from a TFSA are never taxed. Withdrawals from an RRSP are taxed the year you withdraw the money.

To compare more features and benefits, see TFSA vs RRSP vs eSavings.

What is the average retirement age in Canada?

Most people think of 65 as the standard retirement age since Canadians can start collecting Old Age Security (OAS) and Canada Pension Plan (CPP)/Quebec Pension Plan (QPP) benefits at that time. (You can also start taking CPP/QPP sooner, but your payments will be reduced.)

In reality, 64.3 was the average retirement age for all Canadian retirees in 2019. Self-employed Canadians retired the latest, at age 67.1, and those who worked in the public sector (a government agency, for example) retired the earliest at age 62.6.³

How can an advisor help me reach my retirement goals?

Individuals who work with an advisor have been shown to have almost four times the assets of those who don’t work with an advisor!⁴ An RBC advisor can help you:

Determine whether you are saving enough to enjoy the type of lifestyle you want in retirement
Make sure your money is working as hard as possible for you
Adjust your investments as needed to keep your retirement plan on track

You can meet with an RBC advisor through video chat, by phone or in person to make a plan, talk strategy or to simply ask a question.

See More FAQs

FAQs on Retirement Planning

How much CPP will I get?

The monthly CPP/QPP retirement pension you will receive is based on how much you have contributed and how long you have been contributing at the time you start to receive benefits. The amount you receive is also affected by your age when you start receiving your retirement benefit.

To get an estimate of your CPP retirement benefit, request your CPP Statement of Contributions by registering for a My Service Canada Account online or request a copy of your statement from Service Canada by mail.
To see your personalized QPP entitlement, request your Statement of Participation in the Québec Pension Plan by registering for a clicSÉQUR account online or contact Retraite Quebec by mail.

What is the average amount Canadians have in their retirement savings?

According to the 2019 RBC Retirement Myths & Realities poll, conducted by Ipsos, Canadians age 50+ with investable assets of $100,000+ (cash, bank account funds, retirement account funds, etc.) have an average of $674,000 in retirement savings. However, when asked what they would like to save for retirement, survey participants said they would like to have a total of $949,000 in savings.

What is an annuity?

An annuity is a financial contract between you and an insurance company. You deposit a lump sum with the insurer (for example, when converting your Registered Retirement Savings Plan (RRSP) to an income option) and, in return, receive guaranteed payments of a pre-determined amount. Each payment is a combination of a return of the original capital and interest income. Only the interest income is taxable. When purchasing an annuity, you effectively transfer all of the risk of investing to the expertise of the insurer.

You can buy different types of annuities:

Life annuity: Provides income payments for as long as you live—usually with a guarantee of continued payment to your beneficiary should you die.
Joint and last survivor annuity: Income payments are made for as long as you and your spouse live.
Term certain annuity: Specifies the number of income payments. If you die before all of the payments have been made, a death benefit is paid to your beneficiary.

How can an advisor help me reach my retirement goals?

Individuals who work with an advisor have been shown to have almost four times the assets of those who don’t work with an advisor!⁴ An RBC advisor can help you:

Determine whether you are saving enough to enjoy the type of lifestyle you want in retirement
Make sure your money is working as hard as possible for you
Adjust your investments as needed to keep your retirement plan on track

You can meet with an RBC advisor through video chat, by phone or in person to make a plan, talk strategy or to simply ask a question.

See More FAQs

FAQs on Retirement Planning

RRIF vs. annuity. How do they compare?

You must convert your Registered Retirement Savings Plan (RRSP) to an income option, such as a Registered Retirement Income Fund (RRIF) or annuity, by December 31 of the year in which you turn 71.

Here are some of the most important differences between a RRIF and an annuity:

RRIFs

A RRIF is like an extension of your RRSP and is used to withdraw income during your retirement.

You have flexibility and control over your savings—you can change your investments and where you hold your RRIF
Payments are not locked in—you have to take a minimum amount each year, but you can take more out if you need the income
The money in your RRIF continues to grow tax-sheltered until you withdraw it

Annuities

An annuity is a financial contract between you and an insurance company. You deposit a lump sum with the insurer and, in return, receive guaranteed payments of a pre-determined amount. When you buy an annuity, you effectively transfer all of the risk of investing to the expertise of the insurer.

You can receive guaranteed income for life if you choose a Life Annuity
Payments are locked in once you buy your annuity—you don't have to think about market fluctuations or interest rates
You don't have to actively manage funds or withdrawals
You don't have to withdraw a minimum amount every year

An RBC Insurance Advisor can help answer your insurance-related questions.

Need some help deciding what to do with your RRSP? Talk to an RBC advisor.

How can I reduce taxes in retirement?

Taxes are a fact of life, even in retirement. While you can’t avoid paying them completely, there are strategies you can use to minimize taxes and keep more of your income. Every person’s situation is different, but here are five strategies you may want to discuss with your advisor:

Using a Spousal Registered Retirement Savings Plan (RRSP)
Splitting pension income with your spouse or common-law partner
The best way to withdraw from your different sources of income
Contributing to a Tax-Free Savings Account (TFSA)
Tax-efficient ways to handle extra money or assets you have

For more details, check out our article, How Can I Reduce My Taxes in Retirement?

How much is RRIF withholding tax?

Each year, you must take a minimum amount of money out of your Registered Retirement Income Fund (RRIF).

If you choose to take more than the minimum, the financial institution where you hold your RRIF must deduct a certain amount of tax for any amounts that exceed the minimum amount.

In general, lump-sum payments from a RRIF that exceed the minimum are subject to the following estimated withholding rates:

10% (5% for Quebec) on amounts up to $5,000
20% (10% for Quebec) on amounts over $5,000
30% (15% for Quebec) on amounts over $15,000

There are several rules and stipulations for RRIF withholdings. For a more detailed explanation and how your withdrawals may be taxed, please talk to an advisor or visit the CRA website.

How long will my money last in retirement?

Your unique spending habits, lifestyle wants and needs, health, family situation, taxes—all of these things can impact how long your money will last in retirement. No two situations are exactly the same.

If this question keeps you up at night, or even if you just want to double-check your numbers, an RBC advisor can help you make a plan so that you have a clearer picture of where you stand and what you need to do to have a long, satisfying retirement.

Based on a 2019 RBC Poll, 71% of retirees with a financial plan say they are enjoying retirement life and all that goes with it—only 54% of retirees without a plan feel the same way.

See More FAQs

Want Help Deciding How to Invest? Let’s Connect.

Talk to an advisor for one-on-one investment advice, help making a plan and more.

Book an Appointment

Things our lawyers want you to knowThings our lawyers want you to know

Financial planning services and investment advice are provided by Royal Mutual Funds Inc. (RMFI). RMFI, RBC Global Asset Management Inc., Royal Bank of Canada, Royal Trust Corporation of Canada and The Royal Trust Company are separate corporate entities which are affiliated. RMFI is licensed as a financial services firm in the province of Quebec.

You can withdraw up to $35,000 from your RRSP to buy your first home under the Home Buyers’ Plan. The funds must have been on deposit at least 90 days before you withdrew them, and a signed agreement to buy or build a qualifying home is required. At least 1/15 of the funds must be repaid each year, beginning two years after the funds were withdrawn. For details see Canada Revenue Agency Home Buyers’ Plan.

Under the Lifelong Learning Plan, you can withdraw up to $10,000 per calendar year for your own or your spouse's full–time training or post–secondary education. The total amount that can be withdrawn is $20,000 each with withdrawals over a maximum of four consecutive years. At least 10% of the amount borrowed must be repaid each year, over a maximum period of 10 years.

Source: Statistics Canada. Table 14-10-0060-01 Retirement age by class of worker, annual

Source: The Gamma Factor and the value of Financial Advice, Claude Montmarquette, Natalie Viennot-Briot, 2016.

These are the findings of the RBC 2019 Retirement Myths and Realities Poll, conducted by Ipsos between April 2 to 8, 2019. For the overall survey, a sample of 2,000 Canadians aged 50+ was interviewed via the Ipsos I-Say panel and non-panel sources. Quotas and weighting were applied to ensure that the sample's composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. For this release, the data referenced is among a sample of 900 aged 50+ who are pre-retirees with investable assets of $100K or more, and 100 aged 50+ who are pre-retirees with investable assets of less than $100K. The credibility of Ipsos online polls is measured using a credibility interval. In this case the results are considered accurate to within ±3.5 percentage points, 19 times out of 20, for the full sample of pre-retired Boomers, ±3.7 percentage points for those with investable assets of $100K+, and ±11.2 percentage points for those with investable assets of less than $100K.