How to Plan for Retirement Without a Pension

Fifty years ago, retirement planning was straightforward for many Canadians: more than half of working people—especially men—relied on employer or union pension plans as their primary source of retirement income. That era has largely passed. Today, most workers must assemble retirement income from several sources instead of depending on a single workplace pension.

According to Statistics Canada data for 2021, only 38% of paid workers in Canada were covered by a registered pension plan. While pension coverage has stabilized after several decades of decline, the private sector has seen much of the reduction in employer-sponsored pensions. Even with modest recent growth in the number of people covered—6.7 million Canadians were in workplace pension plans in 2021, a 1.8% increase over the previous count—that growth did not keep pace with employment expansion.

As a result, most Canadians need to build their retirement income from a mix of public programs and personal savings vehicles: government benefits, registered retirement savings plans (RRSPs), tax-free savings accounts (TFSAs) and non-registered investments. That shift has increased anxiety about retirement readiness. A 2024 survey for CPP Investments found that 61% of Canadian adults worry about running out of money in retirement, a concern that climbs to 67% among people aged 28 to 44. A separate Manulife survey reported that 51% of Canadian employees feel they’ve fallen behind in retirement savings.

If this description feels familiar, the good news is that it’s rarely too late to improve your retirement prospects. Each person’s path is different: single people, couples, employees, the self-employed, newcomers and long-time residents face distinct opportunities and challenges. The most important first step is to assess where you are now and create a practical plan to build the gap between current savings and the retirement lifestyle you want.

Basic steps to improve retirement readiness:

• Take stock of current resources: list expected government benefits, employer plans (if any), RRSP and TFSA balances, non-registered investments and other assets.
• Set clear goals: estimate how much income you’ll need in retirement, and when you want to stop working. Use realistic assumptions for living expenses and health-care costs.
• Prioritize employer matching: if your workplace offers matching contributions, contribute at least up to the match—it’s free money and one of the fastest ways to boost retirement savings.
• Maximize tax-sheltered accounts: use RRSPs and TFSAs according to your tax situation. RRSPs provide tax-deferred savings for those who expect lower income in retirement; TFSAs offer tax-free growth and withdrawals.
• Address high-interest debt: paying down expensive debt frees up cash flow to save more for the future.
• Automate savings and increase contributions over time: set up regular transfers to retirement accounts and raise the amount when income or bonuses increase.
• Build a diversified portfolio aligned with your time horizon and risk tolerance, and consider professional advice for complex situations.

For readers in specific circumstances without a workplace pension, targeted guidance can help. Below are practical guides that address common situations and offer steps to make the most of available tools and benefits:

• 30 and no pension
• 40 and no pension
• Self-employed and no pension
• Single and no pension

• Single parent and no pension
• New to Canada and no pension
• Not enough pension

Read more retirement planning:

• Planning for retirement with little or no savings to draw on
• CPP payment dates this year, and more on the Canada Pension Plan
• OAS payment dates and key information about Old Age Security
• Moving RRSPs to RRIFs, and LIRAs to LIFs: how the transition works