There is no universal retirement number. The amount you need depends on what you plan to spend, what guaranteed income you will receive from CPP, OAS, and any pension, and how long your retirement lasts. For most Canadians, the real question is not “how much do I need in total?” but “how large a gap does my portfolio need to fill — and for how long?”

Why the $1 Million Benchmark Is Misleading

The idea that $1 million is the retirement target is widespread and mostly unhelpful. A retiree with a defined benefit pension, full CPP, and full OAS may need almost nothing from a personal portfolio. A retiree with no pension, early CPP, and a high spending target may need $1.5 million or more.

The number that matters is not your portfolio balance. It is the gap between your income and your spending.

Step 1: Estimate Your Annual Retirement Spending

Research consistently shows that retirement spending typically follows a pattern: higher in the early active years, declining in the mid-retirement years, and sometimes rising again late in life due to healthcare costs. A common planning assumption is that retirees need approximately 70% to 80% of their pre-retirement income — but this varies widely.

A more precise approach is to build a retirement budget from the ground up: housing costs, food, transportation, travel, healthcare, and discretionary spending. Do not assume your spending will automatically drop — it may not, particularly in the early years of retirement.

Step 2: Calculate Your Guaranteed Income

• CPP: Check your estimated entitlement at My Service Canada Account
• OAS: Approximately $727/month at 65 (2025), higher if deferred to 70
• Defined benefit pension: If you have one, calculate the monthly benefit at your anticipated retirement date
• Rental income or annuity income: If applicable

Step 3: Calculate the Gap

Subtract your guaranteed annual income from your estimated annual spending. Example: Annual spending target of $80,000. CPP of $12,000/year plus OAS of $8,700/year equals $20,700 of guaranteed income. Gap: $59,300/year.

Step 4: Estimate the Portfolio Required

Using a withdrawal rate of 4% as a starting guideline, divide your annual gap by 0.04 to estimate the portfolio required. Continuing the example: $59,300 divided by 0.04 equals $1,482,500. At 3.5%, the required portfolio rises to approximately $1,694,000.

How Retirement Length Changes Everything

A 30-year retirement is not twice as expensive as a 15-year one — it is significantly more expensive, because the portfolio must survive more potential market downturns and more years of withdrawals. Longevity is the most underestimated risk in retirement planning. Plan to age 90 as a baseline.

Government Benefits Reduce What You Need

CPP and OAS together can provide $20,000 to $30,000 per year or more for a single person, and up to $50,000 or more for a couple. These are inflation-indexed, guaranteed for life, and require no investment management. Maximising these benefits directly reduces the portfolio you need to accumulate.

Key Takeaways

• There is no universal retirement number — it depends on spending, income sources, and timeline
• The right question is: how large is the gap between my spending and my guaranteed income?
• Divide your annual gap by your withdrawal rate (3.5%–4%) to estimate the required portfolio
• CPP and OAS are inflation-indexed, lifelong income — maximising them reduces your required savings
• Plan for a retirement lasting to age 90 as a baseline
• Retiring earlier requires a significantly larger portfolio and affects CPP and OAS entitlements

This article provides general financial education for Canadians. It is not personalized financial advice. For guidance specific to your situation, consider speaking with a CFP® professional.