Retirement Savings Reality Check: What Americans and Canadians Actually Need

Planning for retirement across North America reveals starkly different financial realities. The latest data tells an interesting story about how geographic location shapes your path to financial security in retirement years.

The Numbers: How Much is Enough?

According to the 2024 Charles Schwab 401(k) Participant Study, Americans estimate they’ll need $1.8 million to retire comfortably. Meanwhile, Canadians are targeting CA$1.54 million (approximately $1.07 million USD), according to BMO’s 2025 Retirement Survey. This $730,000 gap isn’t just about currency differences—it reflects deeper structural variations between the two countries.

Both populations carry retirement anxiety. Over three-quarters of Canadian respondents worry about depleting their savings before death, while 63% cite inflation as a primary obstacle to accumulating adequate retirement funds. Americans face their own set of pressures, particularly around healthcare accessibility and costs.

The Housing Factor: Your Biggest Asset and Biggest Expense

Real estate represents both opportunity and challenge for North American retirees. In Canada, the average home carries a price tag of CA$713,700 (roughly $498,800 USD), with significant variation between expensive metropolitan markets like Toronto and Vancouver versus more affordable regional centers. South of the border, the US median home value sits at $357,138, though regional disparities are equally pronounced—lower-tax states such as Pennsylvania and Iowa offer more favorable pricing, while others substantially elevate the cost equation.

The rental landscape tells a similar story. Americans pay an average of $2,085 monthly for housing, whereas Canadian renters spend approximately CA$1,799 ($1,256 USD) per month. For retirees without mortgage obligations, these figures matter less; for those still carrying debt into their golden years, housing remains the single largest budget item.

Healthcare: Where Divergence Becomes Critical

This is where the two countries fundamentally part ways. The US healthcare system creates outsized retirement costs that Canadians simply don’t face. While Medicare provides baseline coverage, the reality for American retirees involves substantial out-of-pocket expenses. Standard health insurance premiums average between $7,000 annually through ACA marketplace plans and $8,951 through employer-sponsored coverage, per KFF data. Many retirees then layer on supplemental insurance and face potentially devastating long-term care bills—a major reason why Americans need nearly twice the retirement cushion compared to their northern neighbors.

Canada’s publicly funded healthcare model operates on entirely different principles. Basic medical services are covered through government programs, with private insurance handling optional expenses like dental, vision, and specialized treatments. A 35-year-old male Canadian might pay only CA$700 (approximately $488 USD) annually for supplemental insurance—a fraction of what comparable US coverage costs.

Daily Costs and Lifestyle Considerations

Beyond housing and healthcare, everyday expenses paint another revealing picture. Research from LivingCost.org indicates that day-to-day living in Canada runs 21% cheaper than in the US. The average person spends $1,980 monthly in Canada versus $2,498 in the US when accounting for food, transportation, utilities, and other essentials.

What This Means for Your Retirement Plan

The retirement savings gap between Americans and Canadians ultimately reflects systemic differences rather than lifestyle preferences alone. A Canadian retiree benefits from publicly funded healthcare, marginally lower living costs, and less expensive housing in many regions. An American retiree must self-fund comprehensive healthcare coverage and navigate higher property values and daily expenses in most desirable retirement locations.

Inflation represents the shared enemy for both populations. Consequently, many North Americans are adjusting retirement expectations—postponing retirement timelines, adopting leaner budgets, or pursuing part-time work during early retirement years. The specific strategy depends on individual circumstances, but the underlying principle remains: understanding your country’s unique cost structure is the first step toward building a sustainable retirement.