HERE’S WHY AT 45, THE AVERAGE CANADIAN RRSP ISN’T ENOUGH
Canadians are feeling the pressure. A recent BMO survey showed a sharp rise in personal finance worries between March and April 2025. Nearly three in five Canadians are more concerned about their financial situation now than they were just a month prior. The cost of living, economic recession, and job security are all top of mind. And amid this growing anxiety, one thing is becoming clear: by age 45, the average Canadianâs Registered Retirement Savings Plan (RRSP) just isnât enough.
What you need
Most financial advisors suggest having at least three to four times your annual salary saved in your RRSP by your mid-40s. But a recent look at national averages suggests many Canadians arenât there. The average RRSP balance is estimated to be around $144,000 for those in their mid-40s. That may seem like a decent amount, but when stretched across potentially 30 to 40 years of retirement, it falls short. Add in inflation, rising healthcare costs, and the possibility of needing to help aging parents or children, and it becomes clear why many are concerned.
This is where dividend stocks can help fill the gap. One that stands out in todayâs market is ARC Resources (TSX:ARX). Itâs not just a solid energy company; itâs a consistent cash generator that has become a popular choice among Canadian investors looking to boost long-term income.
About ARC
ARC Resources focuses on natural gas and condensate production, primarily in Western Canada. What makes it attractive is the dividend stock’s ability to generate strong free cash flow and return capital to shareholders. At writing, ARC pays a quarterly dividend, giving it a yield of around 2.6%. That income lands in your account every month, which is especially helpful when inflation keeps driving up the cost of groceries and other essentials. In fact, here’s what a $25,000 could earn investors right now from dividend income alone!
Recent earnings reflect this strength. For the first quarter of 2025, ARC reported production of 354,000 barrels of oil equivalent per day, a 5% increase year over year. Revenue came in at $1.71 billion, with net income hitting $400 million. That translates to earnings per share (EPS) of $0.62, well ahead of estimates. The dividend stock also reduced its net debt by 11%, maintaining a strong balance sheet while continuing to reward shareholders.
Bottom line
In todayâs market, many Canadians are asking themselves whether their RRSPs are really on track. With inflation eating away at purchasing power, relying solely on savings just wonât cut it. Thatâs why integrating high-quality dividend stocks into a retirement plan can be a smart move, especially when those dividend stocks offer income and the potential for capital appreciation.
The BMO survey didnât just highlight rising fears; it also offered advice. Canadians are taking steps to protect their financial futures, including working with advisors, building emergency funds, and staying disciplined with savings. Adding well-managed companies like ARC Resources to the mix can support those efforts and give investors more confidence in their long-term plans.
At 45, itâs not too late to pivot. If your RRSP isnât where you hoped it would be, thereâs still time to make up ground. But doing so will take more than just setting aside money; it means putting that money to work. Investing in companies that deliver consistent income and steady growth, like ARC, is one way to take action and feel more secure about the decades ahead.
The post Here’s Why at 45, the Average Canadian RRSP Isn’t Enough appeared first on The Motley Fool Canada.
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Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
2025-06-10T01:27:54Z
