What the average Canadian retiree lives on
Let’s jump right into it: what does the average Canadian retiree live on? How do you measure up?
According to a recent CTV news article referencing Stats Canada data, Canadian retiree household income (for 2024) put the median after-tax income for senior families (top earner 65 or older) at $83,200. Given inflation, I would anticipate that’s closer to $90k per year here in 2026.
On the spending side, StatsCan’s most recent Survey of Household Spending found households headed by someone 65 or older spent an average of $78,499 in 2023.
As per the article:
“Put those two numbers side by side and the typical retiree household isn’t sitting on much of a cushion. Most of what comes in goes right back out.”
But that may or may not apply to you depending on your income sources.
You may or may not be “average”.
Not being average might be the best thing for you…
Retirement Income Planning 101
Unless someone can share otherwise, I continue to believe the cornerstone of retirement income planning centers around what you intend to spend – to figure out if you have enough saved for retirement.
Thankfully for most Canadians some income sources for your retirement are guaranteed – guaranteed to go up over time too – to make the retirement math easier for you:
- Do you have CPP income, if so, how much?
- Do you have OAS income, if so, how much?
According to *Service Canada, the latest figures show “average” CPP retirement pension is about $858.34 per month up to a maximum of $1,507.65 per month.
*Max OAS is up to $762.50 a month for ages 65 to 74. There could be more OAS income if you are older and your total income for the tax year remains under OAS clawback territory.
*Figures current to the time of writing this post, figures change at least quarterly.
- Do you have a workplace pension, if so, how much can it deliver?
I’m fortunate to have a small DB (defined benefit) pension in my financial future but I can appreciate not everyone has this.
The sum of CPP, OAS and the DB pension I will take in a few years, will be secure, inflation-protected income sources for us and those income sources might apply to you as well.
Otherwise, the rest of your retirement income might need to be financed by personal / private savings.
Source: Government of Canada Pillar System.
Retirement Income Spending 101
Knowing your income sources is important, but you must determine what you intend to spend to ensure you have enough saved to enter retirement.
Leading into our own retirement, we calculated pretty much every dollar spent for the last 2-3 years to get an estimate of our spending needs, wants and buffer.
This was our retirement spending budget – a fairly conservative budget I will update for you and share in early 2027 once 2026 spending is done in a few months.
Yes, Couples have it better than Singles
Unfortunately, our tax system has created an unfair bias to families and couples over singles in retirement.
Single retirees have a harder time planning for retirement given you pay rent, property taxes, utilities, etc. whether one retiree lives under the same roof or two retirees do. There really is no OAS survivorship benefit – ages 65 and older: no survivor benefit under Old Age Security; the deceased partner’s OAS payments stop entirely immediately upon death. Without a partner at all, there are no pension income splitting benefits to take advantage of in retirement.
The list against singles goes on.
Singles need to consider retirement income planning a bit differently than couples.
What the average Canadian retiree lives on
Image Source: The Behavior Gap
My work at Cashflows & Portfolios providing lower-cost financial projections for singles and couples continues to inform me that no two retirement income plans are the same.
Every client I work with and every reader I engage with here, has:
- Different spending goals.
- Different longevity and estate considerations.
- Different amounts of assets.
- Varied public and private income sources.
That’s not right or wrong and it certainly doesn’t make you “average”.
Like the article suggests, I continue to mention here the answer to “how much do you need to retire” depends on your spending needs, your wants, and some buffer built-in (just in case) when your plan doesn’t go to plan. Best practices are to revisit any assumptions and financial projections at least annually.
Lots of articles including this CTV one like to suggest what you need for retirement. Retirement is certainly not determined by an age. Your retirement doesn’t need to be “average”. In fact, anything less than your own personalized financial plan will never do.
Mark
Related Reading:
Here are some great, free, retirement income case studies beyond “average” information.
If you ever want a discount for your own low-cost personalized financial projections, contact me here.
“ Most of what comes in goes right back out.”
What I don’t understand is whether this is by design? For example, if senior takes a lot travel because they have time and money, then sure what come in goes back out. I guess my point is this same amount in and out doesn’t necessarily mean seniors don’t have cushion, it could just mean they don’t want to save it
Yes, I had the same thoughts when I read that too – doesn’t mean there is an issue per se!
Mark
Great topic, love Stats as you know although I find StatCan often inadequate, slow and sometimes borderline useless. Stats can be insightful and misleading at the same time, context matters and they best are used with caution. Median spend, as average spend, will be difficult to determine surveys are not known for their accuracy. Median spend however will be substantially less than the avg $78K as spend skews to the higher income earners. Mr. Liew is a CFA, he should understand the difference between AVG and MED and should also be cautious drawing conclusions. To me seniors appear to run a surplus which can not be said about other demographics given the sizable personal debt we have accumulated. Seniors also earn more (median income) vs the rest of Canada so statistically the problem seems to not exist until you drill down to single, renting, disabled, asset poor seniors. Otherwise a great article I do enjoy his work including his YT channel.
Ironically we are not that far off from the median amount for our Province, we are looking at ~$8K pm in income (including a decent sized DB, partial CPP). Our what do we need math is simple (and borrowed) take your needs *1.3 to cover discretionary spend and apply an extra 20% as buffer/savings. This to us is very comfortable given we do not have debt and do not suffer from consumer derangement syndrome. For us quality of life comes, among other things, from this comfort earning more but spending way more would not improve our quality of life. Median=good enough.
Thanks for your thoughtful comment, Ben.
That median number is still very good but certainly that $80k ish number aligns with a bulk of what I see, hear and support in some Cashflows & Portfolios retirement income work. Seems anything north of $90k per year after-tax spending is quite “comfortable” and when some retirees are much higher than that (some are!), well, that’s some considerable cashflow.
I know retirees that are fine on $4k-$5k spending per month and some in the luxury mode spending north of $12k per month.
Everyone is different – my conclusion is these types of headlines at the end of the day really don’t apply to anyone although they seek to appeal to everyone. 🙂
I think if you’re going to be in the range of spending $8k per month (after-tax), that’s very good and nice.
You might recall we have a 10% annual spending buffer by design.
https://www.myownadvisor.ca/financial-independence-budget/
Cheers!
Is 90k per person or per couple?
Based on Stats Can dataset this is household spending.
As for me, I have my own way to Rock — That’s the way I Roll.
I am single and 77 years old.
I can’t say within $20,000 or so how much I actually spend in a particular year.
Fact is, even though I lived under the poverty line from the age of 31 to 41, I have really never had a budget.
This I know:
My OAS is all clawed back and my CPP is only $755 a month because I took it at 60 and have only worked half of my adult life.
This year I cashed in $200,000 of my RRIF so the CRA will say my income for 2026 is somewhere around $300,000.
I am not too concerned about the income tax I will have to pay.
Even though I did not attend this University, I funded “The EJZ $4,000 Annual Award for Individual Creativity” at Simon Fraser University at a cost of $80,000. This along with another $3,200 in charitable donations will reduce my income tax bill substantially.
https://give.sfu.ca/where-to-give/funds/beedie/ernie-j-zelinski-award-creativity.html/
In short, I am not concerned because I am sure my net worth will still have increased by over $300,000 this year.
To me, being single is not a problem.
Great stuff, Ernie – on that net worth growth!
I don’t really calculate our net worth very much but I do know it’s up. I focus on cashflow from the portfolio for the most part.
Ya, we’re too young to even consider CPP or OAS but we’ll eventually have some of that to spend in our 60s.
Continued success to you!
Mark
I am a big supporter of endowment funds so a hearty “Well Done!” to you Sir.
Thanks Mark for your excellent posts.
Regarding the defined benefit plan which is also called the superannuation fund for federal employees, what % does the surviving spouse is entitled to when the other spouse passes away? For the CPP, the surviving spouse gets a % as spousal benefit. Just wonder if the superannuation pension plan works the same way.
Regarding the median or average income for the retirees, each pensioner has their own spending lifestyle. One can live on, say, $2K a month, whereas another needs $4K. A big factor is if the retiree has any debts and what % of their income needs to finance the debt payment.
Thanks Mark for any insight you can provide. Take care.
Thanks, Ken.
I’m not a government employee (was not) so I would have to defer to those in government and their own pension plans for that, but my understanding is at least some DB plans have >66.6% surviving spouse provision.
That is based on the following:
Defined benefit (DB) pension legislation in Canada typically mandates a minimum 60% joint and survivor pension for members with an eligible spouse, unless formally waived. Source: https://www.osfi-bsif.gc.ca/en/print/pdf/node/1478
For CPP, here are some details:
https://www.myownadvisor.ca/survivorship-benefits-for-cpp-and-oas/
I hope that helps a bit.
To your point, “each pensioner has their own spending lifestyle.”
100%.
I know some retirees as singles or couples living just fine on $5k per month after-tax.
Example:
https://www.myownadvisor.ca/im-single-is-it-possible-to-retire-at-age-55/
I know others that can’t fathom spending less than $10k per month after-tax with needs and wants.
Not what “average” is or isn’t, just what you need and want.
I hear ya on debt. I never liked it and don’t have any!
Cheers,
Mark
Someone famous once said there are “lies, damn lies, and statistics”
Median vs average can be significantly different, and which average stats are missing in this scenario?
Average or median tax free income generated from the TFSA(s) of the single or couple (which technically is NOT income so not captured by Stats Canada.)
The conclusion appears to be that seniors are living pay cheque to pay cheque. My wife and I are in that scenario.
However, I believe the conclusion can be misleading.
My wife and I are deciding how much taxable income we make annually as retirees. Why have a big cushion and pay more taxes.
We no longer have income from employment. Instead, we plan our taxable income to match our spending from available tax investments like our RIFs and non-registered accounts.
Mark, another interesting and thought provoking article! Thanks as always for what you do on this site.
Thanks, John. I liked your comment.
Median vs average can be significantly different – agreed.
Give or take a few +/- $5k, maybe?, seems to me “average” spending in retirement nowdays is about $80k per household over age 65. So, Stats Can says.
How accurate is that? Does that apply to you and your household?
At the end of the day what I tried to mention in the post is: it doesn’t matter what “average” says or doesn’t say.
Only your own plan, own math, own income sources and own spending matters. That’s it. 🙂
If you have the choice on “…deciding how much taxable income we make annually as retirees…” and you have a taxation question vs. an income question then you’ve done well.
Some retirees have an income issue. Others have a taxation issue. I like the latter!
Cheers.
We are in the 90K ballpark on annual spending (we bumped it up recently due to inflation).
We find that a very comfortable amount with a good chunk of that figure on discretionary things like vacations, music concerts, and stage shows.
Being mortgage free (and car loan free) is another key factor in keeping that spending amount comfortable.
You rightly advocate paying off the mortgage in the financial journey to retirement. It frees up at lot of money for the fun stuff.
And yes, we count ourselves fortunate to have taxation issues. 😀
I think a $90k ish after-tax spend in retirement is getting quite comfortable – as long folks model your behaviours like no debt.
100% = always been a fan of being mortgage-free to enter retirement with. Glad we did!
Cheers,
Mark
Using averages can be tricky and misleading. I would be lower than the average for spending yet I have a friend who would be well above the average, they spend three times what I spend. I actually make more than I take as income so would the amount I make be what the article classifies as income or is it the amount of money I take from those sources be my income? I only take the amount I need to cover my spending (including the taxes I need to pay). If I needed more money I can always take it either from a registered account triggering increased taxes or I could also take some income from my TFSA. I do not receive either CPP or OAS yet so neither of those things are included in my current income.
Certainly mean, averages, median, etc. are all different – which is why I firmly mentioned (?) that all averages are fine and good but they have nothing to do with Paul, Mark or anyone else. Only your own math will do.
Income has always been very different to me. I consider spending after-tax, so tax is already factored in.
I am too young to receive either CPP or OAS, let alone my small DB pension, so that “income” (not spending) is not in my budget yet.
Thanks for your probing questions!
Mark
I was more of a “salary replacement” kinda planner (and I use that word very loosely) back in the day.
We lived quite comfortably on our salaries ergo we ought to be able to continue if that level of income was sustained after we stopped working. In theory, my DB pension would be 70% of best 6 year average (excluding overtime and shift benefits). The spouses pension would be substantially lower (~42%) due to being on disability for many of her working years. CPP is irrelevant as the pensions were integrated and I ignored OAS. So the RRSPs only had to make up the difference. As it turned out, the RRSPs were mostly maxed yearly anyways so any “calculating” became moo. TFSAs became the gravy.
So in essence, the action turned out to be, just fill stuff up and hop on board. 🙂
Great stuff.
I’m similar in that I know what I want and need to spend, so, I have to replace that when not working.
Easier said than done I think. 🙂
If you just have to use RRSPs to largely make up the difference, you’ve done very well. That I know.
Mark
Apologies, but I found this piece a bit confusing. In the same sentence, you used “average” and “median”, so I’m not certain which of the two you’re sharing. Getting some clarity on what the actual mean (average) is vs. what the median (50th percentile) value is would be quite helpful for me.
I suspect they’re quite different from each other, and that in itself could be quite interesting.
Thanks!
Good catch, JB – clarified for “median” as in middle-value for the after-tax income.
Stats Can uses “average” for expenditures in that link.
Is that close to you? Too high? Too low?
Mark