Canadians’ Preparation for Retirement (CPR)

  • David Boisclair
  • Ismaël Choinière-Crèvecoeur
  • Pierre-Carl Michaud
  • Pierre-Yves Yanni, Retirement and Savings Institute, HEC Montréal
image of downtown office building shot from the ground up

Conclusion: Key Takeaways


This report presents a new, detailed and soon-to-be made publicly available retirement preparedness calculator that includes an important, innovative stochastic component. The model provides aggregate retirement readiness figures for a cohort of the population, or for sub-groups thereof. It covers the following aspects:

  • Household characteristics: age, composition current earnings, past DB plan coverage
  • Initial asset and debt balances for most types of assets and debts
  • State-of-the-art life-cycle modelling of future earnings paths/dynamics
  • Projection of debt payment and savings strategies, as declared by survey respondents
  • Flexible retirement time for both spouses, as planned by survey respondents
  • Conversion of assets into annuities at the time of retirement, using actuarial fair factors
  • Possibility of using housing and business wealth to fund retirement
  • A wide range of possible values for a large number of parameters, such as returns on assets, interest rates and corresponding debt costs, and housing value


Using the stochastic version of the innovative Canadians’ Preparedness for Retirement (CPR) calculator – which, for the purposes of this report, computes 25 simulations for each household and aggregates the results – the report finds the following core results, weighted using the 2016 Census.

  • About 84% of Canadian households aged 25 to 64 years old in 2018 were on track to being “financially prepared” for retirement
  • The average preparation index is 117 but, as all averages do, this hides a wide variety of situations.
  • Lower income households are generally very well prepared – over 90% of households with an income per person below the median are projected to be “prepared”
  • Unsurprisingly, households most at risk of being “unprepared” largely fall into the sub-group with higher than- median income, but no RPP or savings; the average wage income of the group deemed “prepared” is significantly lower than that of the “unprepared” group. Those with DB RPPs are better prepared than average.
  • Probabilistically, the vast majority of households are almost certain to be “prepared”; a very small minority face dire prospects, while about 7% of households face a 35% to 65% probability of being prepared for retirement. Only 18% of households have less than an 80% chance of being prepared.