What Age Should You Start Saving for Retirement?

Retirement savings is one of the most important aspects of personal financial planning – yet it’s often delayed. Many people wonder: “Am I too young to think about retirement?” or “Is it too late to start?” The answer may surprise you: it’s never too early or too late – the key is to start as soon as possible, and in the right way for each stage of life.

Let’s explore the different age groups and retirement saving strategies that suit each life stage in Canada with TikiTax.

1. Age 20–29: The Power of Compound Interest

If you’ve just graduated and started working, this is a golden time to begin saving for retirement. Why?

• Compound interest: Money invested early has more time to grow.

• Lower costs: You can start with small, consistent contributions to build good financial habits.

• Flexible investing: You have time to take higher risks for potentially greater returns.

Tip: Start with a TFSA or RRSP, even if it’s just $50/month.

2. Age 30–39: Balancing Spending and Long-Term Investment

This is the stage where you may be more settled in your career, possibly starting a family or buying a home. While there may be significant expenses, retirement savings should not be ignored.

• Higher income → greater saving potential.

• RRSP tax benefits become more valuable.

• Start developing a long-term investment strategy and gradually lower risk.

Tip: Prioritize RRSP contributions to maximize tax savings, especially if your income is over $50,000/year.

3. Age 40–49: Catching Up and Optimizing Performance

If you haven’t started yet, your 40s are not too late – but you’ll need to act faster and plan more precisely.

• Increase your savings rate (e.g., 15–20% of income).

• Optimize your portfolio: gradually reduce risk, shift toward more stable assets.

• Calculate your realistic retirement budget: how much will you need?

Tip: Use TFSA, RRSP, and employer-offered plans like Group RRSP. Consider professional financial advice to determine the exact amount you need to save.

4. Age 50–64: The Final Push

At this point, you may have paid off your mortgage, your children may be independent, and your income may be at its peak. This is an ideal time to maximize savings before retirement.

• Max out your RRSP and TFSA contributions each year.

• Review your investment strategy to protect your capital.

• Plan your retirement withdrawals smartly (when to withdraw RRSP, when to take CPP, OAS, etc.).

Tip: Consider “catch-up contributions” if you haven’t used up your RRSP room from previous years.

5. Age 65 and Beyond: How to Start Withdrawing

If you haven’t started before, you can still contribute to your RRSP until age 71 (after which it must be converted to a RRIF). At this stage, the focus is on optimizing withdrawals to minimize taxes.

• Convert RRSP to RRIF before age 71.

• Use TFSA to continue tax-free growth.

• Plan your CPP and OAS timing wisely.

Tip: Withdraw funds strategically to avoid pushing your annual taxable income too high.

Conclusion
There’s no single “perfect age” for everyone, but the earlier you start, the greater your financial advantage. Whatever your age, act today – saving even a small amount consistently can make a huge difference in retirement.

If you need personalized retirement planning tailored to your financial situation, don’t hesitate to contact the TikiTax.net team for professional, customized advice.