How To Save $1 Million For Retirement

Luisa Hough • July 18, 2016

Starting to save early for retirement is extremely beneficial in the long run, especially if you have the dream of retiring with $1 million as so many Canadians do. It’s not an easy feat, but for most Canadians, retiring with $1 million is a realistic goal. You most likely won’t be flying private or have a butler, but retiring with $1 million means you can live comfortably (especially if you follow the 4% rule, which suggests withdrawing no more than 4% of your nest egg each year to maintain the principle, if you factor in interest rates and inflation). 

So how can you actually save a million dollars? Discipline and planning will help you pave the way to seven figures by retirement. Here are 8 tips to help get you there:  

1. Save early

Let’s say you’re 25, you have no real savings, your annual earned income is $40,000, and you plan to retire in 40 years. In order to retire with $1 million, you must save $502.14 each month for 40 years at a 6% rate of return.

Now let’s say you wait until you’re 45 to start saving (maybe paying off debt has held you back), and at this point you have no real savings, your annual earned income is $72,000, and you plan to retire in 20 years. In order to retire with $1 million, you must save $2164.31 each month at a 6% rate of return. 

What to take away from this: It’s never too late to start saving, however, building wealth later in life or in the last decade before you retire can be really hard. To live well when you’re old means you should start to save while you’re young. Most millionaires in retirement that I know developed good spending, saving, and investing habits when they were young. Also, starting earlier gives your money more time to grow through compounding interest. Saving thousands a month right now may seem (or be) impossible, but you’re better tp start saving something.

2. Pay yourself regularly

Setting up automatic withdrawals (or “payments to yourself” as I like to look at them) from your checking account to your savings (or RRSP) is a great way to build wealth. It may be an adjustment at first (since you’re used to having that “extra” income), but you’ll get used to it pretty fast. You’ll also feel great knowing you haven’t dipped into cash you “should be” saving, and soon enough you won’t even miss the money.

What to take away from this: You’re doing something really good for yourself (and future you) by setting up automatic payments ! Saving should be habitual and easy, so don’t make it painful or harder than it has to be.

3. Live within your means

This one shouldn’t come as a surprise to you! I’ve talked about living within your means before, and how you should avoid the pressure to spend and keeping up with the Joneses.  

To know if you’re living above your means, answer this one question: do you carry a credit card balance that you’re having trouble paying off in full? If you answered yes, please read on. 

You don’t need the biggest home or newest car (and anyone who makes you feel that way need not be in your life). Simply establish a comfortable standard of living you can maintain. Save at least 10% of your paycheque and save your bonuses (and raises) instead of spending them. If you live within your means you won’t need to dip into your reserve funds, and you can actually watch your savings grow. 

What to take away from this: Earn more money, or spend less of what you earn (the latter is much easier to do). 

4. Manage debt

Credit cards, lines of credit, loans, and any other debt you can think of should be managed and paid off ASAP, otherwise you risk throwing away thousands of dollars in interest each year. Even if you have to stop saving for a year or two, do it! 

Oh, and maybe before you lay down the plastic again, ask yourself if you have enough cash in your checking account to cover the purchase. If the answer is no, ask yourself why you’re spending money you don’t have. 

What to take away from this: Pay off your debt as quickly as possible (high interest debt first) and be responsible with your credit card(s).

5. Don’t splurge too soon

While a home may appreciate in value and help you eventually build wealth, a car depreciates the second you take it out of the lot, so consider where you’re making your big purchases. If you can afford the monthly payments on your leased Audi, great! But, if your monthly car payments are higher than your monthly RRSP contributions (or other savings), you need to reassess what you’re doing. 

A new job or pay increase can be exciting and trigger a desire to upgrade, but rather than going out and buying the most expensive sports car in the lot, or the biggest house on the block (hello, house poor!) consider an option that’s somewhere between what you have now and what your dream is. 

What to take away from this: Splurging too soon may throw you into debt you don’t want to be in. Also, buying top-of-the-line items right away leaves little to look forward to the next time you make a similar purchase. Spend your money thoughtfully. 

6. Be frugal

Being frugal doesn’t mean you’re cheap – there is a difference! Prioritize your spending so you can have more of the things or experiences you really want. Let’s say it’s your partner’s birthday. A frugal person would probably have made dinner reservations, since it’s an occasion to celebrate. A cheap person won’t make reservations and may not even make dinner at home.  

Indulging is okay; we all need it at times. But affordable indulgences are what you should be after (example: barbecue a surf n’ turf dinner at home instead of going to a pricey steakhouse). Make sure you’re spending within the lines.

What to take away from this : Understand that paying more doesn’t necessarily mean you’re getting better value. 

7. Invest  

“How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.” – Robert G. Allen

According to a study by Statistics Canada , 31% of those surveyed betweem ages 45 and 60 said their financial preparations for retirement were insufficient. Further, a study by RBC revealed 56% of non-retired Canadians were worried they wouldn’t be able to enjoy the life in which they are currently accustomed to. 

Investing is one of the most powerful tools to grow your wealth. Putting all your savings into a bank account that returns 1% is not the way to grow your wealth quickly. Investing your money provides larger returns and means you could have multiple income sources, helping you rest easier in retirement. 

Make sure to watch out for high and hidden fees , as they can eat away at your investments’ potential growth. Plenty of low-cost solutions for investors are popping up, and fee based advisors, like some robo-advisors , can offer unbiased investment advice, as well as help you set realistic financial goals that match your life goals. 

What to take away from this: Put your money to work for you , and you eventually won’t have to work so hard for it. 

8. Re-evaluate

Life changes, so don’t expect everything to go according to plan. It’s easy to say you’ll save 10% or 15% of each paycheque, but the reality is, it’s not so easy! 

Inflation, income changes, emergencies, employment changes, life expectancy, and priorities ( ever had a baby? It’s expensive, and wonderful!) in general can affect our financial plans. When it comes to saving, it’s always better to save more than to be sorry you didn’t.

What to take away from this: Stick to the fundamentals, and adapt as your life changes. 

Retiring with $1 million doesn’t have to be a dream if you plan for it. Use my tips as guidance, and you could make your dream a reality. 

 

Try out this Million Dollar Savings Calculator to see how much you should start saving each month to retire as a millionaire.

 

This article was written by Randy Cass, and was originally published here on June 8, 2016.

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Bank of Canada Rate Announcement Sept 17th, 2025

By Luisa & Candice Mortgages • September 17, 2025
Bank of Canada lowers policy rate to 2½%.  FOR IMMEDIATE RELEASE Media Relations Ottawa, Ontario September 17, 2025 The Bank of Canada today reduced its target for the overnight rate by 25 basis points to 2.5%, with the Bank Rate at 2.75% and the deposit rate at 2.45%. After remaining resilient to sharply higher US tariffs and ongoing uncertainty, global economic growth is showing signs of slowing. In the United States, business investment has been strong but consumers are cautious and employment gains have slowed. US inflation has picked up in recent months as businesses appear to be passing on some tariff costs to consumer prices. Growth in the euro area has moderated as US tariffs affect trade. China’s economy held up in the first half of the year but growth appears to be softening as investment weakens. Global oil prices are close to their levels assumed in the July Monetary Policy Report (MPR). Financial conditions have eased further, with higher equity prices and lower bond yields. Canada’s exchange rate has been stable relative to the US dollar. Canada’s GDP declined by about 1½% in the second quarter, as expected, with tariffs and trade uncertainty weighing heavily on economic activity. Exports fell by 27% in the second quarter, a sharp reversal from first-quarter gains when companies were rushing orders to get ahead of tariffs. Business investment also declined in the second quarter. Consumption and housing activity both grew at a healthy pace. In the months ahead, slow population growth and the weakness in the labour market will likely weigh on household spending. Employment has declined in the past two months since the Bank’s July MPR was published. Job losses have largely been concentrated in trade-sensitive sectors, while employment growth in the rest of the economy has slowed, reflecting weak hiring intentions. The unemployment rate has moved up since March, hitting 7.1% in August, and wage growth has continued to ease. CPI inflation was 1.9% in August, the same as at the time of the July MPR. Excluding taxes, inflation was 2.4%. Preferred measures of core inflation have been around 3% in recent months, but on a monthly basis the upward momentum seen earlier this year has dissipated. A broader range of indicators, including alternative measures of core inflation and the distribution of price changes across CPI components, continue to suggest underlying inflation is running around 2½%. The federal government’s recent decision to remove most retaliatory tariffs on imported goods from the US will mean less upward pressure on the prices of these goods going forward. With a weaker economy and less upside risk to inflation, Governing Council judged that a reduction in the policy rate was appropriate to better balance the risks. Looking ahead, the disruptive effects of shifts in trade will continue to add costs even as they weigh on economic activity. Governing Council is proceeding carefully, with particular attention to the risks and uncertainties. Governing Council will be assessing how exports evolve in the face of US tariffs and changing trade relationships; how much this spills over into business investment, employment, and household spending; how the cost effects of trade disruptions and reconfigured supply chains are passed on to consumer prices; and how inflation expectations evolve. The Bank is focused on ensuring that Canadians continue to have confidence in price stability through this period of global upheaval. We will support economic growth while ensuring inflation remains well controlled. Information note The next scheduled date for announcing the overnight rate target is October 29, 2025. The Bank’s October Monetary Policy Report will be released at the same time.

Fixed vs. Variable Mortgage Rates in Canada

By Luisa & Candice Mortgages • September 10, 2025
Fixed vs. Variable Rate Mortgages: Which One Fits Your Life? Whether you’re buying your first home, refinancing your current mortgage, or approaching renewal, one big decision stands in your way: fixed or variable rate? It’s a question many homeowners wrestle with—and the right answer depends on your goals, lifestyle, and risk tolerance. Let’s break down the key differences so you can move forward with confidence. Fixed Rate: Stability & Predictability A fixed-rate mortgage offers one major advantage: peace of mind . Your interest rate stays the same for the entire term—usually five years—regardless of what happens in the broader economy. Pros: Your monthly payment never changes during the term. Ideal if you value budgeting certainty. Shields you from rate increases. Cons: Fixed rates are usually higher than variable rates at the outset. Penalties for breaking your mortgage early can be steep , thanks to something called the Interest Rate Differential (IRD) —a complex and often costly formula used by lenders. In fact, IRD penalties have been known to reach up to 4.5% of your mortgage balance in some cases. That’s a lot to pay if you need to move, refinance, or restructure your mortgage before the end of your term. Variable Rate: Flexibility & Potential Savings With a variable-rate mortgage , your interest rate moves with the market—specifically, it adjusts based on changes to the lender’s prime rate. For example, if your mortgage is set at Prime minus 0.50% and prime is 6.00% , your rate would be 5.50% . If prime increases or decreases, your mortgage rate will change too. Pros: Typically starts out lower than a fixed rate. Penalties are simpler and smaller —usually just three months’ interest (often 2–2.5 mortgage payments). Historically, many Canadians have paid less overall interest with a variable mortgage. Cons: Your payment could increase if rates rise. Not ideal if rate fluctuations keep you up at night. The Penalty Factor: Why It Matters More Than You Think One of the biggest surprises for homeowners is the cost of breaking a mortgage early —something nearly 6 out of 10 Canadians do before their term ends. Fixed Rate = Unpredictable, potentially high penalty (IRD) Variable Rate = Predictable, usually lower penalty (3 months’ interest) Even if you don’t plan to break your mortgage, life happens—career changes, family needs, or new opportunities could shift your path. So, Which One is Best? There’s no one-size-fits-all answer. A fixed rate might be perfect for someone who wants stable budgeting and plans to stay put for years. A variable rate might work better for someone who’s financially flexible and open to market changes—or who may need to exit their mortgage early. Ultimately, the best mortgage is the one that fits your goals and your reality —not just what the bank recommends. Let's Find the Right Fit Choosing between fixed and variable isn’t just about numbers—it’s about understanding your needs, your future plans, and how much financial flexibility you want. Let’s sit down and walk through your options together. I’ll help you make an informed, confident choice—no guesswork required.

Your Guide To The A First Home Savings Account (FHSA)

By Luisa & Candice Mortgages • September 3, 2025
Dreaming of owning your first home? A First Home Savings Account (FHSA) could be your key to turning that dream into a reality. Let's dive into what an FHSA is, how it works, and why it's a smart investment for first-time homebuyers. What is an FHSA? An FHSA is a registered plan designed to help you save for your first home taxfree. If you're at least 18 years old, have a Social Insurance Number (SIN), and have not owned a home where you lived for the past four calendar years, you may be eligible to open an FHSA. Reasons to Invest in an FHSA: Save up to $40,000 for your first home. Contribute tax-free for up to 15 years. Carry over unused contribution room to the next year, up to a maximum of $8,000. Potentially reduce your tax bill and carry forward undeducted contributions indefinitely. Pay no taxes on investment earnings. Complements the Home Buyers’ Plan (HBP). How Does an FHSA Work? Open Your FHSA: Start investing tax-free by opening your FHSA. Contribute Often: Make tax-deductible contributions of up to $8,000 annually to help your money grow faster. Withdraw for Your Home: Make a tax-free withdrawal at any time to purchase your first home. Benefits of an FHSA: Tax-Deductible Contributions: Contribute up to $8,000 annually, reducing your taxable income. Tax-Free Earnings: Enjoy tax-free growth on your investments within the FHSA. No Taxes on Withdrawals: Pay $0 in taxes on withdrawals used to buy a qualifying home. Numbers to Know: $8,000: Annual tax-deductible FHSA contribution limit. $40,000: Lifetime FHSA contribution limit. $0: Taxes on FHSA earnings when used for a qualifying home purchase. In Conclusion A First Home Savings Account (FHSA) is a powerful tool for first-time homebuyers, offering tax benefits and a structured approach to saving for homeownership. By taking advantage of an FHSA, you can accelerate your journey towards owning your first home and make your dream a reality sooner than you think.

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