This page answers how much to invest each month: the savings-rate guideline most planners use, how it shifts with your age and pension, and a five-step method for working out your own monthly target from a retirement goal. It is part of our investing basics guides. Once you have a number, how to automate your investments covers making it happen every month, and the investment calculator projects where it leads.
The 15% guideline (and why it varies)
The most widely cited target savings rate for retirement is Fidelity Investments’ guideline of 15% of pre-tax income, including any employer contributions. The rule of thumb assumes:
- You start at age 25
- You keep saving until 67, a span of 42 years
- Your savings replace about 45% of your pre-retirement income, with government benefits adding to that
Fidelity’s guideline is built for the US, where Social Security plays the role that CPP and OAS play in Canada.
On a $80,000 gross salary, 15% = $12,000/year = $1,000/month.
But 15% is not right for everyone:
| Starting to save at | Fidelity’s savings rate |
|---|---|
| Age 25 | 15% |
| Age 30 | 18% |
| Age 35 | 23% |
| Later than that, or behind on savings | Higher still, or a later retirement; the five steps below calculate your own figure |
| Has a defined benefit pension | Lower personal savings needed; calculate the gap |
Why the start date changes the number
The later you start, the higher the monthly amount needed to reach the same target, because each dollar has fewer years to compound. $500 a month from age 35 to 65 at a 7% return (compounded monthly, end-of-month contributions) grows to about $609,985; the same $500 from age 30 grows to about $900,527. The compound interest calculator shows the effect for any amount, and the guides for your 20s, your 30s and starting at 50 apply it to each stage.
How to calculate your personal target
Step 1: Estimate your retirement income target
Take your current after-tax income and multiply by 70%–80%, a common rule of thumb for what you will want to spend annually in retirement. Your own budget is a better guide if you have one.
Example: $75,000 after-tax income × 75% = $56,250/year retirement spending goal.
Step 2: Subtract expected government income
Your CPP Statement of Contributions (in My Service Canada Account) estimates your CPP pension, and OAS depends on your years of residence in Canada; the full OAS amount for ages 65 to 74 is currently $9,150 a year.
Example (assumed figures): CPP of $12,000 + OAS of $9,000 = $21,000/year.
Step 3: Calculate the savings gap
Annual retirement spending – annual government income = annual savings drawdown.
$56,250 - $21,000 = $35,250/year needed from personal savings.
Step 4: Work backward to the savings target
Using the 4% rule: $35,250 ÷ 0.04 = $881,250 in savings needed.
Step 5: Calculate required monthly investment
Using a future value formula (or a retirement calculator), find the monthly contribution needed to reach your target by your retirement age, assuming a 6%–7% average annual return.
Example:
- Retirement target: $881,250
- Years to retirement: 30 (age 35 to 65)
- Expected return: 7%
- Current savings: $0
Monthly investment needed (monthly compounding, end-of-month contributions): approximately $722/month
$722/month is about 12% of $75,000, and a smaller share of the higher gross income behind a $75,000 after-tax income.
Where the monthly amount goes
A common order is any employer RRSP or pension match first (the match is added on top of your own money), then the TFSA and RRSP, then a taxable account once registered room is used. Whether the TFSA or the RRSP comes first depends on your tax rate now compared with retirement: see TFSA vs RRSP for beginners. To check how much room you have, see how much TFSA room you have and the RRSP contribution room calculator.
If you can’t hit 15% right now
Most people cannot start at 15%. Here is a realistic ramp-up approach:
| Year | Approach |
|---|---|
| Now | Automating whatever you can afford, even $100/month, is a common starting point |
| Next raise | Redirecting 50% of the raise to investments is one option (so you still see a net income increase) |
| Year 2 | Increasing by 1% of income |
| Year 3 | Increasing by 1% of income |
| Year 5 | Reassessing and setting a new target |
Automating contributions (a monthly transfer to your TFSA or RRSP on payday) is more effective than reviewing your budget and deciding each month whether to invest. The habit of automation compounds as powerfully as the interest.
Monthly investment by income (15% guideline)
| Annual income | Monthly 15% target |
|---|---|
| $40,000 | $500/month |
| $55,000 | $688/month |
| $70,000 | $875/month |
| $85,000 | $1,063/month |
| $100,000 | $1,250/month |
| $120,000 | $1,500/month |
Related resources
- How Much Do I Need to Retire?: The full retirement number framework
- How Much TFSA Room Do I Have?: Check your available contribution room
- How Much RRSP Room Do I Have?: Know your RRSP capacity
- How Much Emergency Fund Do I Need?: Build this first before investing aggressively
Sources
The figures and rules on this page come from these sources, last checked against them between September 24, 2026 and September 29, 2026. How we check facts.
- Fidelity Investments: How much do I need to retire? | Fidelity
- Fidelity Investments: How much money should I save each year for retirement? | Fidelity
- Government of Canada: Old Age Security payment amounts
- Government of Canada: Old Age Security pension recovery tax