The $1 million retirement number is only true if you forget CPP and OAS exist

"You need a million dollars to retire" has survived for decades because it's round, scary, and occasionally true. For most Canadian households it's off by a factor of two or three — in the wrong direction. The number ignores the two pensions almost everyone collects.

Every figure below is in today's dollars, assumes a 3.5% real return, retirement at 65, and money that has to last to 95.

Start with what's already paid for

At the current quarter's rates, OAS pays $762.50/month at 65. The CPP maximum is $1,508/month, but a typical earner lands closer to 60% of it — about $905/month.

• One person, OAS plus a 60% CPP: about $20,000 a year, for life, indexed.
• A couple, two OAS plus two 60% CPPs: about $39,800 a year.

That's the income you don't have to save for. Whatever spending target you have, subtract it first; the nest egg only has to cover what's left.

A couple spending $60,000: about $385K

Take a couple, both 40, who want $60,000 gross a year from 65. Benefits cover $39,800 of it, leaving roughly $20,000 a year for savings to fund over 30 years.

• Nest egg required at 65: about $384,500.
• With $100,000 saved today and $500/month going in, they're projected to reach about $478,000 — comfortably on track, with a cushion near $94,000.

That is the household the $1 million rule frightens for no reason.

The same couple at $90,000: about $956K

Raise the target to $90,000 a year and the savings have to cover $50,000 annually instead of $20,000. The required nest egg jumps to about $955,600 — two and a half times the $60K figure, for a 50% bigger lifestyle.

At $100,000 saved and $500/month, the couple is short by about $477,000. Closing that gap from 40 means contributions in the range of $17,800 a year — closer to $1,500 a month than $500.

The million-dollar number isn't a myth so much as a specific case: it's roughly what a couple spending $90K needs, or what a $60K household needs if you pretend CPP and OAS don't exist. Run $60K with zero benefits and the target is about $1.14 million. That's where the folklore comes from.

Why a single retiree needs so much more

One person spending $60,000 has only one OAS and one CPP — about $20,000 — so savings must cover $40,000 a year, double the couple's gap.

• Nest egg required: about $761,400.
• With $100,000 saved and $500/month: projected $478,000, a shortfall of about $283,000.

Living alone doesn't cost half of what a couple spends, but it comes with half the government pension. Singles need the calculator more than anyone.

Three things that move the number

1. Your CPP record. The 60%-of-max assumption is a middle case. A 35-year full contributor gets more; a decade out of the workforce gets noticeably less. Check your statement of contributions before you plan around it.
2. The return. At 3.5% real the arithmetic above holds. At 2.5% real, every target rises meaningfully, and a 40-year-old has 25 years of exposure to that difference.
3. Gross versus net. The targets are gross income. A couple drawing $60K split two ways pays very little tax; a single drawing $60K pays more. The retirement income calculator shows the after-tax version.

The takeaway

Don't start from a million. Start from your spending number, subtract roughly $20,000 per person of CPP and OAS, and size the nest egg to what's left. For a couple at $60K that's under $400,000; at $90K it's just under $1 million; for a single at $60K it's about $760,000. Put your own figures into the retirement calculator — it returns the target, your projected balance, and whether your current contribution closes the gap.

Retirement targets delivered by Metrestick. Underlying data: CRA 2026 tax parameters with OAS, GIS and CPP figures (Open Government Licence – Canada), 2026. OAS at the October–December 2026 rate; CPP shown at 60% of the 2026 maximum. Projections assume a 3.5% real return and are illustrative, not advice.