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Retirement Planning and Saving Strategies for Canadians in Their 40s

  • Sahilpreet
  • Jun 25
  • 22 min read

Table of Contacts:


Introduction

Canadian couple in their 40s planning retirement savings and investments at home.

Turning 40 is a financial wake-up call for many Canadians. At this stage, retirement is no longer a distant concept – it’s a looming reality requiring careful planning. Balancing saving for retirement with mortgage payments, child expenses, and possibly aging parents can be challenging. The good news? Your 40s are often your peak earning years, offering a prime opportunity to catch up on retirement savings and take advantage of tax-efficient investment options. Current trends show that many Canadians in their 40s feel behind on retirement prep, but with the right strategies, you can build a comfortable nest egg. In this comprehensive guide, we’ll explore tax-efficient saving options (like RRSPs and TFSAs), discuss retirement readiness in Canada (CPP, OAS, inflation, etc.), and offer strategic tips for both individuals and small business owners. Let’s dive into the essentials of retirement planning – with a special focus on those in their forties and on Calgary-specific considerations.


Assessing Retirement Readiness in Your 40s


Are you on track for retirement? Many experts suggest having roughly three times your annual salary saved by age 40. For example, if you earn around $65,000, a target of about $195,000 in retirement assets is often recommended. In reality, however, a typical 40-something Canadian may have far less saved. (Recent surveys indicate the average RRSP balance for Canadians around 40 is just over $100,000, plus about $17,000 in TFSAs – well below ideal benchmarks.) The first step is to calculate your current savings and compare them against your goals. Don’t panic if you’re behind – mid-career is a critical time to refocus.

Set clear retirement goals in terms of lifestyle and income. Determine what “retirement ready” means for you: do you envision a modest lifestyle or more extravagant travel plans?


Consider using retirement calculators to estimate how much you’ll need by age 65 (accounting for at least 25–30 years of retirement). Keep in mind that inflation can erode purchasing power – in fact, rising prices are a top concern for over 75% of Canadians who worry about outliving their money. Budgeting for higher costs (like healthcare and utilities) is wise.


Government benefits will play a role, but they won’t cover everything. The Canada Pension Plan and Old Age Security provide a base income – at 65, maximum CPP is about $1,364/month and max OAS is around $727/month (if you’ve met residency requirements) – roughly $25,000/year combined. Many retirees receive less than the max, so it’s crucial to have personal savings to bridge the gap. If you’re in your 40s, now is the time to check your CPP statement (see what you’re projected to get at 65) and understand OAS eligibility (40 years of residency after age 18 yields a full OAS). Recognize that CPP and OAS alone likely won’t fund your desired retirement – they should be supplemented by private savings.


Lifestyle planning is another aspect of readiness. Visualize your ideal retirement: Will you downsize your home (lowering expenses) or travel extensively (increasing expenses)? Factor these into your savings target. Also, consider life expectancy – Canadians are living longer, often into their 80s or 90s, so your savings may need to last 30+ years. Risk management in your plan means ensuring you won’t run out of money: this involves diversifying investments, adjusting your portfolio’s risk level (your 40s is a good time to review asset allocation between stocks, bonds, etc.), and possibly securing insurance (life or disability insurance) to protect your family and finances against unforeseen events.


Pro Tip: Plan with inflation and longevity in mind. For instance, using the classic 4% rule (withdrawing 4% of your nest egg annually) can help gauge if you’ve saved enough – but remember to invest in assets that outpace inflation. In your 40s, you still have a long investment horizon (15–25 years till retirement), which is ample time for growth, but it’s also time to get serious. If you haven’t already, start maximizing contributions to tax-advantaged accounts and make retirement saving a budget priority.


Tax-Efficient Saving Options for Canadians in Their 40s


One of the greatest advantages you have in your 40s is access to multiple tax-efficient savings vehicles. Canada offers robust options to grow your money faster by minimizing taxes.


Here are the key tools and how to leverage them:

Registered Retirement Savings Plan (RRSP):

The RRSP is a cornerstone of retirement savings in Canada. Contributions are tax-deductible, meaning every dollar you contribute reduces your taxable income for the year (and possibly yields a hefty tax refund). Investments inside an RRSP grow tax-deferred – you don’t pay tax on interest, dividends, or capital gains as they accumulate. Withdrawals are taxed as income, usually in retirement when you may be in a lower tax bracket. 


Tip: In your 40s, you’re likely earning more than you will in retirement, so maximizing RRSP contributions now can result in significant tax savings today and set aside funds for later. Each year, you can contribute up to 18% of your previous year’s earned income (to an annual max, e.g. about $30,780 for 2025), and unused room carries forward. Consider making catch-up contributions if you have unused RRSP room from your 20s or 30s. A smart strategy is to reinvest any tax refund back into your RRSP or TFSA, boosting your savings further.


Also, couples can use spousal RRSPs to split future income – if one spouse is likely to have a much lower retirement income, the higher earner contributes to a spousal RRSP (getting the deduction now) and the withdrawals later will be taxed in the lower-income spouse’s hands. This can save a lot in taxes down the road!

Tax-Free Savings Account (TFSA):

The TFSA is another powerful tool, especially for mid-life savers. Unlike an RRSP, TFSA contributions are not tax-deductible, but all growth and withdrawals are completely tax-free. This means you pay no tax on investment gains inside a TFSA and can withdraw funds at any time without incurring tax or affecting income-tested benefits. As of 2025, the annual TFSA limit is $7,000, and if you’ve never contributed since TFSAs began (2009), you could have up to $102,000 in cumulative room. In your 40s, use TFSAs to complement your RRSP: for example, for shorter-term goals or as a pool of tax-free money you can tap in early retirement before RRSP/RRIF withdrawals kick in. Because withdrawals create equivalent new room in the following year, TFSAs are very flexible. 


Tip: Invest for growth in your TFSA (since you won’t pay any tax on gains). Many 40-somethings use TFSAs to hold equities or high-growth investments, effectively sheltering those earnings. Meanwhile, you might use RRSPs for income-generating investments like bonds (since interest would be taxed as income if outside a registered plan). Together, RRSPs and TFSAs form a one-two punch: RRSP for the upfront tax break, TFSA for tax-free access. Make sure you utilize both if you can.

Corporate and Non-Registered Investment Accounts:

By your 40s, you might also have savings in a regular, non-registered investment account (i.e. not RRSP/TFSA). While these don’t have special tax shelters, they are still important if you’ve maxed out registered accounts. Invest tax-efficiently here: for instance, Canadian dividends and capital gains have lower tax rates than interest income.


You can also consider tax-efficient mutual funds or ETFs that minimize distributions. Keep an eye on tax-loss selling opportunities each year in non-registered accounts – harvesting losses can offset gains and reduce taxes. If you’re a small business owner with a corporation, corporate investment accounts come into play (more on this in the entrepreneur section).


In short, every dollar you save for retirement should go into the most tax-efficient place available – fill RRSP and TFSA room first, then use taxable accounts for the overflow, structuring investments wisely to minimize the tax drag.

Pensions and LIRAs:

If you’re one of the fortunate Canadians with a workplace pension (defined benefit or defined contribution plan), your 40s are a good time to review how it fits into your plan. Employer pensions can significantly reduce the amount you need to save on your own. Check your latest pension statement to see projected benefits at your retirement age. If it’s a defined contribution (DC) plan, ensure you contribute enough to get any employer match (that’s free money!). If you left a job in the past and have a LIRA (Locked-In Retirement Account), don’t neglect it – it’s essentially an RRSP with some withdrawal restrictions. Manage its investments in line with your overall portfolio.


Additionally, be aware of your pension adjustment – large pension contributions can reduce your RRSP room. In your 40s, you might also start hearing about Individual Pension Plans (IPPs) – these are personal defined benefit plans that some incorporated professionals set up to contribute more than RRSP limits allow. Typically, IPPs make sense for high-income business owners over 40 (and we discuss them later). The key point is to factor in all sources: personal savings, government pensions (CPP/OAS), and any employer pension, to gauge if you’re on track or need to boost personal savings.

Other Savings Vehicles:

A few other options can aid retirement savings. RESPs (Registered Education Savings Plans) are for kids’ education, but using them can indirectly help your retirement – every dollar of grants and growth that funds your child’s college is a dollar you don’t have to pull from your nest egg. So if you have kids, contribute to RESPs to ease that future burden. Some 40-somethings also look at RRSP Home Buyer’s Plan (to withdraw RRSP funds for a first home) or the new First Home Savings Account (FHSA) if buying property; while these are not directly for retirement, efficient use of such programs can improve overall financial wellness as you approach retirement. Finally, consider annuities or insurance products in your late 40s or 50s as part of retirement income planning (though interest rates and personal circumstances will determine if those fit).


Bold Strategy: Automate your savings. In your 40s, it’s crucial to make saving a habit, not an afterthought. Set up automatic contributions to your RRSP and TFSA (e.g., monthly transfers or payroll deductions). Treat your retirement savings like a non-negotiable expense. By paying yourself first, you ensure progress toward retirement goals even while juggling other financial responsibilities.


Managing Inflation and Risk as You Save


It’s hard to discuss retirement planning in the 2020s without addressing inflation and market volatility. Many Canadians in their 40s today have seen inflation jump to multi-decade highs, which directly impacts how much money they’ll need later. Simply put, $1 million won’t buy in 2045 what it buys in 2025. So, how do you protect your future purchasing power?


Calgary Accountants and Professionals

First, invest for real returns. Keeping too much in cash or low-yield GICs might feel safe, but they may not keep up with inflation over 20 years. A well-balanced portfolio with growth assets (like equities) is important to preserve and grow your wealth in real terms. At 40, you likely have a moderate to long investment horizon – you can afford some stock market exposure for growth, as there’s time to recover from downturns. Historically, equities have outpaced inflation, whereas sitting in cash guarantees a loss of buying power over time. Of course, balance is key: as you inch closer to retirement (into your 50s), you might gradually reduce risk. But beware of being too conservative too soon.


Second, diversify your investments. Don’t put all your eggs in one basket – spread across asset classes (stocks, bonds, real estate, etc.) and geographic regions. This way, risk is managed because different investments respond differently to economic changes. Diversification helps ensure that inflation in one sector or market turbulence doesn’t derail your whole plan.


Also, consider inflation-protected securities or assets: Canada offers real-return bonds (which adjust with inflation), and holding some can hedge against inflation spikes. Real assets like real estate or infrastructure can also provide inflation-adjusted income. Many 40-something investors use dividend-growth stocks as a hedge – companies that can increase dividends over time often keep pace with inflation.


Next, regularly review and rebalance your portfolio. Life in your 40s can change quickly – a job change, inheritance, or market rally can skew your allocations. Rebalancing (selling some of what’s grown and buying what’s lagging) keeps your risk level on target. It’s typically wise to check annually. If markets have been volatile, ensure your mix of stocks vs. bonds still aligns with your comfort and goals.


Lastly, maintain an emergency fund separate from retirement accounts. This isn’t directly about retirement savings, but it’s vital for risk management. Having 3-6 months of expenses in an accessible savings account means you won’t need to dip into RRSPs or TFSAs early (and incur taxes or miss out on growth) if an unexpected expense or job loss occurs. In your 40s, job stability can be uncertain (as can health), so having a safety net protects your long-term savings plan.


Remember: Retirement planning is a marathon, not a sprint. There will be bull markets and bear markets, periods of low inflation and high inflation. Staying the course with a solid plan – and adapting it as needed – is more important than chasing fad investments or making knee-jerk reactions. If the economic news is worrying (recessions, rate hikes, etc.), revert to your plan: Does it have buffers for downturns (like bonds or cash for short-term needs)? Are you saving enough to account for potentially lower returns? Adjust gradually, not drastically.


In summary, mitigating risk and inflation involves smart investing and prudent planning. By taking calculated risks in your 40s (investing in growth assets) and gradually dialling down risk as retirement nears, you can protect your nest egg’s future value. Keep an eye on the economy but focus on what you can control: your savings rate, asset allocation, and discipline.


Strategies for Entrepreneurs and Incorporated Professionals


Retirement planning can look a bit different for business owners, entrepreneurs, and incorporated professionals. If you’re a small business owner in your 40s – whether a consultant, doctor, contractor, or owner of an incorporated company – you likely don’t have an employer pension and must be your own financial architect. The good news is you also have unique opportunities, like using your corporation to help fund retirement. Here are key strategies tailored to entrepreneurs:

Salary vs. Dividends – Optimize How You Pay Yourself:

One fundamental decision for incorporated business owners is how to compensate themselves. You can take a salary (or bonus) from your corporation or dividends, or a mix of both. This choice has big implications for retirement:

  • Salary is considered earned income, which means it creates RRSP contribution room. Paying yourself (and perhaps your spouse) a reasonable salary allows you to contribute more to RRSPs, building retirement assets in a tax-sheltered way. Salary also requires contributions to CPP (you’ll pay employer and employee portions from the company), but those CPP contributions will later entitle you to CPP retirement benefits. In contrast, dividends do not count as earned income – they generate no RRSP room and don’t involve CPP premiums. So, if you only take dividends for years, you might enjoy lower CPP costs now but you’ll miss both RRSP room and CPP credits. Example: A Calgary entrepreneur taking a $100,000 salary in a year will generate $18,000 of RRSP room for the next year, whereas $100,000 as dividends generates $0 RRSP room.

  • Dividends are paid from after-tax corporate profits. They often have a lower personal tax rate (thanks to the dividend tax credit), meaning you can potentially extract money more tax-efficiently than salary (especially if you’re in a high bracket). Also, no CPP means more cash in hand today (though, as noted, no CPP pension later). Dividends can be great for flexibility – you can declare them as needed, and if your company qualifies for the small business rate, you might still come out ahead tax-wise by retaining earnings and paying dividends.


So what’s the strategy? Many small business owners in their 40s choose a mixed approach: Take enough salary to max out RRSP contributions and maybe contribute to CPP, and then take the rest as dividends to benefit from the lower tax on dividends. For example, you might pay yourself a salary of say $60k (ensuring you get RRSP room and some CPP buildup) and then take additional dividends for any extra cash you need beyond that. This way, you’re saving for retirement on both fronts – through RRSPs (via salary) and through accumulating value in the company (which dividends can efficiently tap when needed).

There is no one-size-fits-all answer – the optimal salary-dividend mix depends on your corporate profits, personal cash needs, and how much you value CPP and RRSP room versus immediate tax minimization. It’s wise to consult with an accountant to run the numbers.


Important: Keep in mind that if you plan to apply for mortgages or other personal credit, lenders often prefer steady T4 income (salary) over dividends. Some business owners who mostly take dividends switch to a salary for a couple of years before a big loan application to show consistent income. Also, dividends require the corporation to have profits (you can’t pay dividends in a year with a loss without complex moves), whereas salary can be paid (and create a corporate loss that could carry over).

Utilize Your Corporation for Retirement Savings:

As an entrepreneur, your company itself can be a vehicle for retirement wealth. With Alberta’s low corporate tax (around 11% on the first $500k of active business income), many business owners retain earnings in the corporation to invest. Essentially, you pay the low corporate tax, and instead of drawing all profits personally (which would incur higher personal tax), you invest the surplus inside the company. This can act as a form of “corporate retirement account.”


However, be cautious: investment income inside a corporation is taxed at high rates (~50%), and too much passive income (over $50k/year) can erode your small business tax rate eligibility. If your corporation’s investments generate significant income, you could inadvertently cause more of your business profits to be taxed at the higher general rate.


Strategy: Keep an eye on passive investment levels. If your corporate investment portfolio is growing large, you might periodically withdraw some funds (even if it means paying some personal tax) to invest in your personal name or contribute to RRSP/TFSA. By doing so, you keep corporate passive income under the $50k threshold to preserve your small-business tax rate. Yes, you’ll pay some tax now, but it can be worth it to prevent a bigger tax hit on your active business income. Plus, moving investments into your personal hands lets you take advantage of RRSPs and TFSAs that corporations cannot use.


Essentially, don’t let excess cash sit idly or tax-inefficiently – make it work for you either inside or outside the company in the most tax-effective way.

Many Calgary entrepreneurs also set up holding companies (HoldCos) to separate investments from the operating business. A HoldCo can receive dividends from the OpCo tax-free (under certain rules) and invest them. This can offer asset protection and ease if you sell the business later. It’s a more advanced strategy and requires professional advice, but is common in an owner’s retirement planning toolkit.


Consider an Individual Pension Plan (IPP):

For high-income owner-managers (especially those 40+), an IPP can be a powerful retirement vehicle. An IPP is essentially a defined benefit pension plan created for one person (you, the business owner). Your corporation contributes to the IPP (and gets a tax deduction), and the IPP promises you a defined pension in retirement based on a formula (often aiming to replace 2% of pre-retirement income per year of service, similar to corporate pensions). The advantage is that allowable contributions to an IPP increase with age – by your early 40s, the IPP contribution room can surpass what an RRSP allows.


For example, at a given salary, a 45-year-old may be allowed to contribute more to an IPP than the standard 18% RRSP limit. Also, you can sometimes make a one-time large contribution for past service (years you didn’t have an IPP but were working) when you set it up, which is a way to turbocharge your retirement fund if your company has the cash.


IPPs come with costs – you’ll need an actuary to do calculations, and there are setup/administration fees – so they generally make sense if you have significant,t consistent earnings (often $100k+ salary) and are committed to saving a lot for retirement. But for some business owners, an IPP is ideal: it’s creditor-protected, forces disciplined saving, and can even allow extra top-up contributions if the plan’s investments underperform. It’s a complex area, so talk to a financial advisor or accountant who has experience with IPPs to see if it fits your situation.

Dividend Sprinkling and Income Splitting:

As an entrepreneur, you might be able to split income with family members to both reduce taxes now and help them save for retirement. If your spouse or adult children work in the business, paying them a reasonable salary means they can contribute to their own RRSPs and TFSAs (and you effectively shift some income to a lower tax bracket). Be mindful of CRA’s “Tax on Split Income (TOSI)” rules for dividends – basically, you can’t just sprinkle dividends to family shareholders who aren’t actively involved in the business beyond certain limits without potentially punitive tax.


But if a spouse or child genuinely works in the company, paying them either wages or even making them a shareholder with dividends can spread wealth and tax obligations. For instance, a spouse with lower income could receive dividends taxed at a low rate, and they could invest that money in their TFSA or RRSP, further boosting family retirement savings. 


Key point: Any income splitting must be legitimate (commensurate with work performed or capital contributed) to stay onside of the rules. When done right, it’s a way to utilize each family member’s RRSP/TFSA room and basic tax credits to build the household’s retirement resources.

Plan Your Business Exit Strategy:

Though it might be 10-20 years away, think about how your business will factor into retirement. Is your plan to sell the business and live off the proceeds? If so, you’ll want to maximize its value and perhaps use the Lifetime Capital Gains Exemption (currently over $971,000 for qualifying small business shares) to sell tax-free up to that limit. That could form a significant part of your retirement fund.


Alternatively, do you plan to wind down and withdraw retained earnings gradually? In that case, ensure you’ve structured things for efficient withdrawals (maybe you’ll dividend out funds over several years in a low bracket once you stop active work). If you want to pass the business to your children, consider setting up a succession plan and maybe an estate freeze to manage future tax.


These are advanced topics, but your decisions in your 40s can set the stage (for example, paying off business debt, systematizing operations, etc., to make the business more saleable or transferrable).

Don’t Neglect Your Own Retirement Fund:

It’s common for entrepreneurs to reinvest everything into their business, but this can be risky. Your business is not a guaranteed retirement plan – industries change, and businesses face downturns. So, treat your personal retirement savings as a priority too. Ensure you’re diversifying your wealth: some in the company, but some in RRSPs, TFSAs, and other investments outside the business. That way, if the business hits a rough patch, your retirement won’t be entirely derailed.


In all, incorporated professionals have additional levers for retirement planning, but also more complexity. It pays to work closely with a CPA or financial planner (like our team at Sahil & Meher in Calgary) who understands corporate tax and retirement interplay. We often help entrepreneur clients structure an optimal salary/dividend mix, set up retirement plans (including IPPs), and navigate rules so that their business success translates into retirement security. With thoughtful planning, being your own boss can be a huge asset in retirement preparation – you just have to play by the rules and strategize early.


Lifestyle and Estate Considerations


Retirement planning isn’t only about dollars – it’s also about envisioning and preparing for the life you want after work, as well as protecting your legacy. In your 40s, it’s a perfect time to address a few other crucial elements:

Lifestyle Planning:

We touched on this earlier, but it’s worth reinforcing: decide what retirement means to you. Do you see yourself staying in Calgary or Alberta, or moving to a warmer locale or closer to family? Different locations have different costs (for instance, retiring in Calgary might be more affordable than Vancouver or Toronto, but what if you dream of summers in Europe?). Consider hobbies you wish to pursue – some, like gardening or local volunteering, cost little, while others, like golf or travel, can add significant expenses.


Health and activity level also come into play. In your 40s, it’s a great time to invest in your health (exercise, balanced lifestyle) to hopefully save on medical costs later and ensure you can enjoy retirement. Maybe factor in a budget for things like an RV, a cottage, or a long-desired world trip – whatever is on your bucket list. By identifying these now, you can tailor your savings and investment strategy to fund them.

Estate Planning:

Ensure you have an updated will and power of attorney in place. It’s surprising how many people reach their 40s without these documents. A will directs how your assets are distributed if something happens to you, and a power of attorney (for property and personal care) appoints someone to make decisions if you become incapacitated.


While it’s not pleasant to think about, it’s a key part of protecting your family and your accumulated wealth. From a retirement perspective, also consider beneficiary designations on RRSPs, TFSAs, and insurance policies – naming your spouse (or children, etc.) can allow those assets to pass outside the estate (often faster and with tax deferral in the case of RRSP/RRIF to spouse).


If you have a large estate or complex family situation, talk to an estate planner or lawyer about strategies to minimize taxes and hassles (like testamentary trusts, life insurance to cover estate taxes, etc.).

Insurance and Risk Management:

By your 40s, you might have dependents relying on your income. Adequate life insurance ensures that if an unexpected tragedy occurs, your spouse and kids can still have a secure future (including retirement for your spouse). Term life insurance is relatively affordable in your 40s and can provide coverage through your peak earning years.


Similarly, consider disability insurance or critical illness insurance – a serious injury or illness could derail your ability to earn and save, so having a policy payout in that case can protect your retirement savings (so you’re not forced to withdraw them early to cover expenses). Many professionals have these through work or associations, but double-check the coverage. Think of insurance as a safety net for your retirement plan – you hope not to need it, but if life throws a curveball, your savings goals remain intact.

Plan for Debts in Retirement:

Ideally, aim to enter retirement debt-free, especially without a mortgage. In your 40s, it’s a good time to make a plan for paying off major debts before your 60s. This might mean accelerating mortgage payments (taking advantage of prepayment privileges) or eliminating any lingering student loans or credit lines. Carrying debt into retirement can put pressure on your fixed income and add risk (especially if interest rates rise). It’s a balancing act – you also want to invest – but try to strike a balance: don’t neglect retirement savings just to be mortgage-free, yet don’t overspend on lifestyle and end up with big debt later. Budget and plan so that by the time you retire, your housing, car, and consumer debts are minimized or gone. That way, your pension and savings can go towards enjoying life, not servicing loans.

Keep Learning and Adjusting:

Finally, recognize that retirement planning is ongoing. The financial landscape changes – tax laws evolve, new savings products emerge (for instance, the TFSA was introduced in 2009, FHSA in 2023, etc.), and your personal circumstances will change too. Stay informed, perhaps by following trusted financial news or consulting your financial advisor annually.


Small tweaks – like adjusting contributions, reallocating investments, or refinancing a mortgage – can have big long-term impacts. And if you find in your mid-40s that you’re quite behind, don’t despair; instead, take action: increase savings rate, delay retirement age, target a bit, or maybe plan a partial working retirement.


It’s never too late to improve your situation. Conversely, if you’re ahead of schedule, you might decide to retire a bit earlier or adopt a more conservative investment stance. The key is to be proactive and flexible.


Conclusion


Your 40s represent a pivotal decade on the road to retirement. By taking strategic action now, you can significantly improve your financial security for the decades ahead. We’ve covered how maximizing tax-efficient accounts like RRSPs and TFSAs can supercharge your savings – an essential step while you’re likely in your peak earnings. We’ve also highlighted the importance of CPP and OAS as foundational income (while reminding that they won’t be sufficient alone), and how to integrate them into your plan. Inflation, market ups and downs, and unexpected life events are inevitable, but with prudent planning – diversifying investments, protecting against risks, and adjusting contributions – you can navigate these challenges.


For Calgary’s entrepreneurs and professionals, we delved into specialized strategies: balancing salary vs. dividends, leveraging your corporation for retirement (or setting up an IPP for higher contributions), and using income-splitting opportunities within the rules. With Alberta’s favourable tax environment for businesses, there’s a real chance to build wealth inside your company – just be sure to also extract it smartly for your personal retirement needs.


In crafting your retirement plan, maintain a long-term perspective but revisit it regularly. Retirement planning isn’t “set it and forget it” – it’s an evolving process that should adapt as you move from your 40s to 50s and beyond. Don’t hesitate to seek guidance; a professional accountant or financial planner can provide personalized advice, optimize tax strategies, and help project your retirement readiness with sophisticated tools. Our team at Sahil & Meher Accountants and Consultants in Calgary has extensive experience helping clients balance short-term needs with long-term retirement goals, whether it’s refining tax strategies or mapping out a 20-year savings plan.


Most importantly, take action. The fact that you’re researching retirement planning in your 40s is a great sign – it means you care about your future financial well-being. Now, convert that knowledge into a plan: create a budget that prioritizes savings, set up those automatic contributions, adjust your investment portfolio if needed, and ensure your family is protected. The efforts you make in this decade can compound into significant wealth by the time you retire.



Retirement Planning Tax Accounting Calgary

Retirement should be a time to enjoy the fruits of your hard work – whether that means travelling the world, spending time with family, volunteering, or simply relaxing. By implementing the saving strategies and tips outlined in this guide – and tailoring them to your unique situation – you’ll be well on your way to a financially secure and fulfilling retirement. Remember, the best time to start planning was yesterday; the second-best time is today. So start now, stay focused, and don’t be afraid to ask for help. Your future self will thank you for the foresight and discipline you apply today.


Bold Takeaway: Planning for retirement in your 40s is both urgent and rewarding – urgent because time is marching on, but rewarding because every smart decision now can significantly improve your quality of life later. Whether you’re an individual professional or a business owner, a solid mix of tax-smart saving, informed investing, and risk management will pave the way for a comfortable retirement. It’s about working smarter with your money now so that your money can work for you in the future. Happy planning – you’ve got this!





Works Cited


  1. Bank of Montreal Retirement Survey – Canadians’ Retirement Worries: Highlights that Canadians believe they need on average $1.54 million to retire (down from $1.7M the year prior), and 76% are worried they won’t have enough because of rising prices (inflation)benefitscanada.com. Inflation over the past year impacted the ability to save for 63% of respondents, leading many to cut spending or plan to work longerbenefitscanada.com. (Benefits Canada, Feb 20, 2025)

  2. Fidelity Retirement Guidelines via Spring Financial – Savings Benchmarks by Age: Recommends having 3× your annual salary saved by age 40, as part of an age-based retirement savings milestone (e.g. 1× by 30, 3× by 40, 4× by 45, etc.) springfinancial.ca. For example, by age 40 a person earning $50k/year should target ~$150k in retirement savings springfinancial.ca. These are general guidelines assuming consistent saving (15% of income from age 25) and a retirement at 67, maintaining lifestyle springfinancial.ca. (Spring Financial, updated 2023)

  3. State of Canadian 40s’ Savings – Average RRSP & TFSA Balances: As of 2024, the average RRSP balance for 40-year-old Canadians is about $103,000, and the average TFSA balance is around $17,000 moomoo.com. Financial planners suggest that many in this age group are falling short of the ideal benchmarks – with an average income of ~$65k for 35-44 year-olds, 3× salary would be ~$197k, but typical combined savings are closer to ~$120k, indicating a gap moomoo.com. (Motley Fool via Yahoo Finance, Dec 6, 2024)

  4. Government Benefits – CPP and OAS Figures: For 2025, the maximum CPP retirement pension at age 65 is about $1,364.60 per month, and the maximum OAS pension at 65 is about $727.64 per month meridiancu.ca. Actual amounts vary based on one’s CPP contributions and years of residency in Canada (for OAS) meridiancu.ca. Canadians can take CPP as early as 60 (with reduced benefits) or delay to 70 (for increased benefits), and OAS can be deferred up to 70 for a higher amount. (Meridian Credit Union, 2025)

  5. Retirement Strategies for Business Owners – Individual Pension Plan (IPP): An IPP is described as a defined benefit pension plan for one person, typically a business owner over 40 years old with high income (usually $100k+ T4 income) mawer.com. IPPs allow larger tax-deductible contributions than RRSPs for older individuals – contribution room increases with age and can surpass RRSP limits after age 40 mawer.com. They are appropriate for owner-managers seeking to maximize retirement savings and who have the corporation’s cash flow to fund the plan. (Mawer Investment Management, 2020)

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