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Gen Z Canadians are better at saving for retirement than millennials. Here's how you can start saving young
How did you learn financial concepts growing up? If you're a Boomer or a Gen X, you might mention important books or classes you took. If you're a millennial like me, you might tout literature alongside more digital mediums, like podcasts or even videos. But for Gen Z, many of them are leaning on purely digital mediums to learn about retirement — and it's working.
Consider the anecdotal evidence of Tani Imasogie: a 28-year old Torontian who opened an RRSP when she was 21. But, as she tells the Globe and Mail, she didn't learn about financial strategizing from offline sources. Instead she turned to YouTube and online articles, as well as some TikTok saving videos.
Imasogie now contributes 3% of her income to her pension plan — with her employer contributing 7% — and she hopes to save even more. The thing is, Imasogie isn't an outlier among Gen Zs. A study from TD Bank found that 68% of Gen Z is investing consistently each year, the highest amount out of any demographic surveyed.
Statistics Canada observed that Gen Z contributed a median amount of $1,880 to their RRSPs in 2023, which is 20% more than what millennials were contributing when they were that age in 2009, the Globe confirmed. So, what's working for Gen Z that other generations might be missing?
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Social media and online investment platforms make investing accessible
Looking at the technological advancements that have emerged during Gen Z's lifetime, such as AI, it's not surprising to think that digital platforms like Wealthsimple) YouTube and TikTok videos are informing Gen Z's financial knowledge. With many Canadians being able to open a bank account from their phones, it makes sense that the digitally-savvy younger generation would use these tools to their advantage.
Young adults like Imasogie are also using social media to inform themselves about investing. 'Gen Zs have grown up in an information-rich environment,' Pat Giles, TD's vice-president of Saving & Investing Journey, told the Globe, adding that, 'They're much more likely to use social media to shape their investing decisions.'
A report from the CFA Institute found that Gen Z investors gained financial literacy primarily through social media and internet searches, with friends/parents and family trailing closely behind in relevance.
Though online queries for financial advice can turn up some wild strategies, Gen Z is showing us older generations that not all digital mediums are flawed, Gen Z.
How much do Canadians really need to retire?
Though investing young is critical, knowing exactly how much you need in the bank to retire is just as important. You need to have a target to aim for. However, the answer isn't cut-and-dry.
Sun Life Financial notes that opinions among financial advisors differ widely on how much Canadians need — with advisors suggesting anywhere from 40% to 70% of what you earned while working for your retirement income.
The exact amount you will need depends largely on your retirement goals and your financial situation.
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Assuming you made around $70,000 the year before retirement and had a stable career throughout your life, you'd need anywhere from $28,000 to $49,000 per year to sustain yourself in retirement.
Considering you would receive approximately $1,500 per month from Old Age Security (OAS) and the Canadian Pension Plan (CPP), or $18,000 annually, that range whittles down to $10,000 to $31,000 a year.
To be earning that kind of income before applying taxes, you would need around $750,000 invested in safe investments that earn around 3% in income or capital gains. Or, if you have a higher risk tolerance, you could have $500,000 in investments if they earned around 5% annually.
While this basic calculation doesn't take into account more complex concepts like OAS clawbacks, it is a helpful starting point.
How you can prepare for retirement early
It can feel impossible to meet those income goals, especially with the cost of living sitting so high. Here are some tips from Manulife Bank to help you start saving when it counts — when you're young.
Find a career with an employer-matching plan. Utilizing an employer-matching RRSP or pension-matching plan can potentially double your savings efforts, making saving for retirement that much easier.
Use multiple account types. While RRSPs are the well-known investment vehicle for Canadians, don't shy away from TFSAs or other accounts to help you save, especially since they can have different benefits that can help you both now and in the future.
Review all your financial goals. While looking at the benefits of compound interest on your RRSPs might look appealing, don't forget about your other goals as well. Owning a home, starting a family or travelling the world are all financial goals that deserve your attention.
Reflect on your personality. Investing any amount is great when you're young, but you also need to consider your risk tolerance, investment personality and your current financial needs.
Gen Z seems to be leading the charts over millennials when it comes to saving for retirement, but that doesn't mean other generations can't catch up. Let's take a note out of Gen Z's playbook and start using online financial resources to sharpen our retirement planning. We'll probably thank ourselves later.
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1. The Globe And Mail: Gen Z is saving for retirement better than millennials, by Meera Raman (Jul 26, 2025)
2. TD Bank: Only 49% of Canadians believe they are saving enough to reach their long-term goals, reveals TD (Nov 14, 2024)
3. Statistics Canada: RRSP, TFSA and FHSA Contributions, 2023
4. CFA Institute: Gen Z and Investing: Social Media, Crypto, FOMO, and Family (May 2023)
5. Sun Life Financial: How much does it cost to retire in Canada? (Nov 29, 2024)
6. Manulife Bank: 6 simple tips to start saving for retirement in your 20s (Aug 13, 2021)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
