What is the average retirement income in Canada?
The average retirement income in Canada can be calculated using different methods. According to Statistics Canada, the median income for senior households, where the highest income earner is 65 years old or more, is $65,300 pre-tax income, and $61,200 after-tax income. However, it is important to note that this figure represents the median income for senior households, which may not accurately reflect the income of all retirees in Canada.
Another source states that the average total income for the top 1% tax filers in Canada in 2020 was $512,000. This figure is significantly higher than the median income for senior households and may not accurately represent the average retirement income for most Canadians.
A common rule of thumb for retirement planning is the 70% rule, which suggests that retirees will need approximately 70% of their pre-retirement income to maintain their lifestyle in retirement. Using this rule, a retiree with a pre-retirement income of $100,000 would need approximately $70,000 in annual retirement income to maintain their lifestyle. This would translate to a retirement savings goal of $1.75 million using the rule of 25, which is a popular method for calculating retirement savings needs.
Overall, the average retirement income in Canada can vary depending on the source and calculation method used. It is important for individuals to carefully consider their personal retirement goals and needs when planning for their retirement savings.