“How much money do I need to retire?” Here is a common question Canadians are asking, especially as the cost of living seems to be rising everywhere. The specific dollar amount will depend on your precise location and circumstances.
There’s a difference between asking how much you need to retire in a city like Vancouver or Toronto versus elsewhere in Ontario. Some locations are far more expensive than others.
All things considered, Toronto offers an incredible lifestyle for the right retiree with the savings and income to afford it. In this post, we’ll answer some of the most common questions you might have about how much you need for retirement.
Knowing how much your home is worth can be foundational to your retirement plans in Toronto. Our team can help! Book your complimentary evaluation with our team right here.
How Much Money Does It Take to Retire in Canada?
How much do you need for retirement? Is $2 or $3 million enough? A seven-figure sum might seem astronomical, but less so when you break it down into a monthly income. Plus, it can take decades to accumulate that money, and savings have a way of depleting quickly once you start tapping into them.
A simple retirement calculation would tell you that $2 million works out to $80,000 per year for 25 years. Whether or not that is enough is subjective. If your home is paid off and you plan to live modestly, that might be plenty for retirement.
Keep in mind that determining how much you will actually need and how far your retirement savings will go is highly nuanced. We are not financial advisors, but ideally, you’ll have your funds in some kind of interest or dividends-bearing account. A healthy return means your nest egg will go much further. We recommend speaking with a qualified financial advisor to help you clarify your goals and refine your strategy.
Your home isn’t just a place to live. It is a valuable financial investment. Explore a few of the equity and income possibilities in the posts below:
- Exploring Alternative Paths to Passive Income in Toronto: Beyond Landlordship
- Should You Turn Your House into an Income Property?
- 5 Things To Know About Investing in Toronto Real Estate
Assessing Your Unique Situation
Different factors also come into play as everyone has unique challenges and resources. Your debt load, assets, and current income and savings are all critical to your future plans. Ask yourself the following questions:
- At what age do you wish to stop working?
- Do you have any unearned income, such as an investment or trust account?
- What are your current monthly expenses?
- Will those expenses go up or down based on the retirement lifestyle you wish to enjoy?
- Do you own your home, and if so, is there still a monthly mortgage?
- Do you plan to stay in your home or sell it to rent or buy a smaller condo?
- Are there any health issues that you might need to account for as you age?
The Cost of Living in Toronto
What is a good monthly retirement income in Toronto? First, consider your personal lifestyle preferences and what it will take to achieve them. Whether you own or rent, housing will likely be your highest monthly cost – unless you are mortgage-free.
Toronto real estate prices fluctuate, but it’s no secret that values have risen dramatically over the last decade. As real estate values climb, rent prices are never far behind. According to Zumper, renting a one-bedroom apartment requires well over $2,000 per month as of 2025.
If you want more than one bedroom or a townhouse, you can expect monthly costs to increase accordingly. Keep in mind that you’ll still need to account for food, transportation, utilities, and entertainment while maintaining a rainy-day emergency fund.
All of these are imperative for a comfortable and worry-free retirement. Car insurance and gas can also be more expensive in Toronto, but housing prices are by far the most significant difference.
Is selling your home part of your future plans? The posts below can help you maximize your results:
- Navigating Toronto’s Shifting Real Estate Market: A Guide to Successful Home Selling
- Unlocking the Keys to a Successful Home Sale in Toronto: Insider Tips and Tricks
- Home Renovations That Add Lasting Value
Planning Early for Retirement in Toronto
Contributing to a registered retirement account is an excellent idea that can improve your financial position as you get older. The younger you begin, the longer those funds have to accumulate and compound. What is the average retirement savings in Canada? Unfortunately, most Canadians don’t have enough liquid cash to sustain them once they are no longer earning a regular income.
This is where real estate comes in. When it comes to saving money and growing wealth, almost nothing beats buying and owning a home for the long term. When your mortgage is paid in full, you are truly in an enviable position as a retiree.
Are you looking for the perfect location for downsizing? Here are some of our
Best Toronto Neighbourhoods for Active Retirees.
Exploring Your Options for Retirement in Toronto
Having no mortgage or rent payments is a huge burden off your shoulders, and your equity opens up more options.
- You could stay where you are and age in place. A reverse mortgage could provide a source of income if you need it; just be sure you understand the benefits and risks involved.
- Selling your home and moving to something smaller and less expensive frees up your equity and provides more discretionary income.
- You can keep the house in your name and rent it out as you live elsewhere. This allows you to keep building equity while the monthly income covers the carrying costs of the property.
- If you’ve always dreamed of becoming a snowbird and heading south for the winter, now is your chance!
Everyone chooses a different path for their retirement years. For many people, owning real estate plays a major role in achieving those goals.
Does buying or selling a home align with your retirement plans? Our West Toronto real estate agents can help you form your strategy. Reach out today at 416-769-3437 or email info@sidorovainwood.com to learn more.
