Retirement Readiness: Planning Your Financial Future

Retirement can feel like a distant horizon, yet the choices we make today define the comfort of tomorrow. Understanding where you stand and how to bridge gaps is the first step towards a secure future.

Understanding Today’s Savings Gaps

Across North America, many nearing retirement find themselves facing median retirement savings remain far below what is needed. In the United States, households aged 55–64 report median savings of just $30,000. In Canada, the picture is more promising yet still uneven: $120,000 in RRSPs versus $335,000 in pensions for the same age group.

Contributing factors include low participation and access gaps—only 28% of employers cite participation as a priority—and demographic disparities that leave Hispanic, low-income and private sector workers at a disadvantage.

These numbers reveal a pressing need to implement automatic contribution increases and to prioritize early saving for those just starting out.

Government Programs and Contribution Limits

Social Security in the U.S. offers a 2.8% cost-of-living adjustment in 2026, adding roughly $56 per month, while the full retirement age stands at 67. Canada’s CPP, OAS and GIS provide vital support but rarely cover all expenses.

Knowing contribution limits and repayment thresholds can unlock extra savings room. Both RRSPs and TFSAs remain powerful vehicles, especially when used together.

• RRSP 2026 limit: lesser of 18% of prior income or $33,810
• TFSA cumulative limit since inception: $109,000
• CPP self-employed max contribution: $8,460.90
• OAS/GIS thresholds: repayment begins at $95,323; GIS max of $1,108.74 per month
• US Social Security earnings cap under FRA: $24,480 per year

Trends Shaping 2026 Retirement Planning

Employers and individuals alike are adapting to a shifting landscape. Data-driven plan design and in-plan annuities and target-date funds are rising in popularity. Automatic enrollment, once novel, now boosts participation across generations.

• Auto-features could add up to 47 percentage points of readiness for younger workers.
• Increased focus on hybrid products blends growth and income protection.
• Flexibility via TFSAs has 49% of Canadians favoring them over RRSPs.
• Delaying retirement or benefit claims can improve lifetime income by 7–16 percentage points.
• Rising housing and debt pressures underline the need for balanced saving and debt management.

Practical Steps to Boost Your Readiness

No matter your age or income, targeted strategies can close the gap between aspirations and reality. Taking control now turns uncertainty into confidence.

• Start or increase contributions early—longer saving horizons yield compounding benefits.
• Diversify across account types—balanced mix of RRSPs and TFSAs maximizes flexibility and tax efficiency.
• Delay claiming benefits—delay claiming benefits for higher payouts to boost monthly income.
• Automate savings—keep contribution rates on autopilot to prevent procrastination.
• Address high-interest debt—addressing high-interest debt early frees up cash flow for investing.

Closing Thoughts

Retirement readiness is not a single number but a continuous journey of small decisions and adjustments. By understanding gaps, leveraging government programs, and embracing emerging trends, you can chart a course toward a comfortable and purposeful retirement.

Begin today—review your accounts, set realistic goals, and take one actionable step forward. Your future self will thank you.