Canadian Savings Habits: How Much Do People Really Save on Average?



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Many Canadians use the average savings in Canada as a yardstick to determine how much they should have saved at their age. While this might be the right step toward financial accountability, it’s not the best way to approach savings. Before the pandemic, Canadians saved just 2-3% of their income, that’s way below the recommended 15 – 20%.

Most people who feel somewhat content with their financial situation still wonder if they are doing enough.  ‘At my age, how much should I have saved?’ is a question that keeps bearing on our minds.

Most times, the worry is not about where our next meal is going to come from, we are only curious to know how we are doing financially in comparison to our peers all over the country.

Finance experts around the world often set benchmarks for expected savings after a certain number of working years. This is computed based on some key economic metrics.

Many of us will find these benchmarks ridiculous and completely absurd mainly because the experts who set them copiously fail to accommodate the reality of the different people’s financial backgrounds and the challenges they’ve had to surmount throughout the course of their lives.

Although one does not necessarily have to follow these goalposts’ or ‘milestones’ set by society, it is still useful to know what the ‘money gurus’ recommend.

Why Should You Know The Average Savings of Your Peers in Canada?

We’ve all compared ourselves to our friends/peers in the past for different reasons. It’s not always attributed to jealousy or insecurity. Here are some positive reasons to do it. 

  • Helps to re-evaluate your ambitions
  • Serves as a guide for setting appropriate targets and budgets
  • To keep your consumption in check and increase your savings
  • Helps you make career decisions
  • To help you make investment decisions
  • Psychological motivation

What is the Average Savings by Age in Canada?

To determine how much you should have saved at a particular age, we need to analyze certain macroeconomic metrics such as;

  • Country Average Income and Average age at the beginning of Full-time employment
  • Current Age of the Individual
  • Recommended Saving Rates
  • Rate of Returns on Savings
Recommended Savings Rate

The Minimum Savings Rate recommended for every working adult by the World Bank is 10% of annual earnings.

Canada’s Average Disposable Income

The average annual salary in Canada is said to be around $65,000 CAD.

When adjusted for Taxes and the Average Cost of living. The average Discretionary of each individual works to about $39,000.

Average Minimum Working Age in Canada

The average age that people begin to work full-time is 25 years. Adjusting for years spent in tertiary education.  This figure may be much lower in the informal sector as the average legal working age is between 16-18 years.

Expected Savings is not calculated by the total number of years a person has lived but are strictly based on the number of years each individual has spent in the workforce.

Since the average age at which people begin work is assumed to be 25 years, we can simply deduct 25 years from each person’s current age to arrive at the figure for the Average Working duration.

Rate of Return

Most people simply don’t dig trenches in their backyards to keep their savings. We keep our thousands and millions of dollars in the bank. When we make savings in the bank, the bank pays a certain percentage of it as interest.

The average rate paid on Savings accounts in Canada is around 4%. It is certainly less significant compared to other aggressive forms of investments such as stock trading or hedge fund investments. However, savings accounts are almost risk-free. And 4% is sufficient to offset the effects of Inflation which is about 2% annually.

This 4% rate of return really adds up when you compound your savings consistently over time. Ensure you check out the savings accounts with the best returns

How much should I have saved by 30?

30 is one subconscious benchmark most people set in their lives to attain certain milestones. We can use the metrics identified above to solve for the recommended amount each Canadian is expected to have saved by the time they hit the dirty thirty.

By 30 years, it is assumed that you are at least 5 years into your career and established a steady source of income than you were in your 20s.

Expected Savings Computation: Workings

Therefore, to compute the expected Savings of by a certain age, we have to calculate as follows;

Average Income x Recommended Savings Rate x Years of Working duration

= $39,000 x 10% x (Current Age – 25years)

= $39,000 x 10% x (30 – 25)

= $3,900 x 5

= $19,500 CAD

Canadian Average Savings

We can then apply this formula to all other ages from 25 to 65 (Recommended Retirement Age)

It is important to note that the figures in this table are only estimates. For example, it is expected that your earnings will increase as you grow older and become more established within the industry you work.

However, we all have to understand that a lot happens in life.

Things are not always this straightforward. Some people spend long years in college, studying towards multiple degrees and professional courses before entering the workforce much later than their peers. Some don’t even have a defined career path until their late 30s. And they still attain success.

The keynote is that there’s no straight path to success.

Age Average Working Duration Recommended Savings 10% of $39,000CAD Rate of Return on Savings @ 4%
30 years 5 $19,500 $22,620
35 years 10 $39,000 $46,800
40 years 15 $58,500 $70,200
45 years 20 $78,000 $93,600
50 years 25 $97,500 $117,000
55 years 30 $117,000 $140,400
60 years 35 $136,500 $163,800
65 years 40 $156,000 $187,200

By the time you are 40, you should have twice your annual salary saved up. Let’s say your annual salary at the start of your career is $39,000, by the time you are 40, you should have $78,000 CAD saved up in your personal Savings accounts.

That’s quite a lot to ask for given that a lot happens between ages 30 and 35!

There is likely parenting, and big purchases like saving for a house, among other things to budget for.

If you don’t measure up with your peers on the table, you can learn new ways to invest money and get closer to your savings goal

How To Save Up Twice Your Annual Salary By 40

Now that we know the ‘recommendations’ of how much you should have saved up in your savings account by each milestone age, let us come up with a plan.

To save the equivalent of your salary over the next 5 years, assuming there is no increase in wage you will have to be saving 20% of your gross income.

Here are 10 tips that can guide you towards saving up twice your annual salary over the next few years.

1. Pay yourself first

Every payday before you get excited and start splurging, move some money out of your main bank account into your savings. The temptation is real.

Follow the Warren Buffet rule; Don’t save what you have left after spending, rather, Spend what you have left after saving.

2. Monitor your expenses

Calculate your essential monthly expenses i.e. Rent, Utility bills, Transport, Phone bills, etc., and every paycheque. After doing that, make some allowance to give yourself a treat. But be responsible for it.

The next step, have a look at what you have left, whatever is left over after your essential bills and your expenses, then challenge yourself to save a little more than the 20% you originally planned.

This will be useful in months when you have unforeseen expenses such as medical bills or etc. Without having to dip into your actual saving. To do this more effectively, you can have a different savings account. It helps.

3. Take Advantage Of Your Employer RSSP Matching Plan

Take advantage of your employer’s retirement savings matching plan. A lot of employers match your RRSP contributions.

For example,  If you have an RRSP and you make the full recommended RRSP contribution of 18% of your income say $10,000, your employer is obliged to add another $10,000 to that figure.

To learn more about the Employer Matching Plan and RRSP in Canada: Click here, How much does each Canadian have in their RRSP

4. Focus On Diversifying Your Income Streams

Invest some of your savings and get passive dividend income. Trading conservatively on well research stock can really make a difference in the long run.

5. Find a Side-Hustle

Do you have a talent that all your friends have been telling you about? Are you funny, do you like to rap? Does everyone tell you that your make-up is always perfect? Why not try to monetize one of your talents in your spare time?

You can start with your circle of friends, open a Youtube channel, etc, and start making some money in your spare time.

 6. Get rid of Old Stuff

That shoe you have never worn in 3 years, might be someone else’s treasure. In fact, your old radio set can pass off as a classic relic in the right museum. Start digging and get rid of some of the stuff you have lying around in your home in exchange for some cash.

You’ll be surprised just how much you can make off what you already deem useless.

7. Accumulate Income Yielding Assets

You can also use some of your savings to purchase an income-yielding asset. You could purchase a truck and lease it out to moving companies or your local construction company.

This can yield a reliable income stream without you having to move a muscle.

8. Maximize government supplements

 The government gives some incentives such as the Canada Child Benefit.  You can get a bit of money per month from the government on the basis of the number of kids you have dependent on you or through tax savings.

9. Lower your base expenses

Always check for ways to lower my monthly recurring expenses that are non-essential. Such as your cell phone bill, is that new iPhone 12 really necessary? Can you get by just fine in a smaller house?

If you love going to the gym, can you get a few pieces of equipment and start working out in your home? A calorie burned in the gym counts the same as a calorie burned in your living room. The monthly cost of a gym really adds up annually.

You can save quite a lot over time by cutting down on your monthly expenses

10. Increase your salary

Obviously, it is easier to save money if you have a higher income because you will have more money left over after taking out your essential expenses. 

Millennials are more known to switch jobs frequently and have less ‘job loyalty’ but this can come with an advantage because it definitely offers more opportunities for salary increase each time you switch jobs and negotiate with your new employer.

If you are in a career that pays relatively less than the country average, you can hop on YouTube, LinkedIn, or Udemy in your free time to learn new skills or get a new Professional Certification towards switching careers.

For example, with very little or no prior knowledge, you can become a Software engineer or Graphic designer within a few months of consistent learning and switch to working at your dream company or industry.

Another way is to up your performance at your current job and make yourself so visible and valuable that you can confidently walk in on the boss to ask for a raise. This method is often overlooked, but sometimes, it works!


Your age does not really count towards what you can achieve in life. Benchmarking your accomplishments to a certain age is quite unhealthy. Grow at your pace, spend within your means and avoid excessive debts.

If you are not hitting your savings target these days, as long as you are healthy and breathing, you are doing just fine. Quite literally.

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Kareena Maya

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Kareena Maya is a freelance writer focused on the personal finance and travel spaces. He frequently writes about credit cards, banking, student loans, insurance, travel rewards and more. His work has been featured in publications such as Forbes Advisor, Bankrate, Credit Karma, Finance Buzz, The Ascent and Student Loan Planner.

Kareena Maya is a freelance writer focused on the personal finance and travel spaces. He frequently writes about credit cards, banking, student loans, insurance, travel rewards and more. His work has been featured in publications such as Forbes Advisor, Bankrate, Credit Karma, Finance Buzz, The Ascent and Student Loan Planner.