Male Ramsey Show host
Ann’s story is one a lot of Canadians will recognize.
The 50-year-old called into The Ramsey Show to admit something she’d been carrying for some time: She was living paycheque to paycheque, had no retirement savings and didn’t know where to begin (1).
She wasn’t good with money and never had anyone in her family teach her how to budget. A recent and costly hospital stay made it impossible to ignore her poor money management any longer.
Ann isn’t alone. A 2025 H&R Block Canada survey revealed that 85% of Canadians polled feel that living paycheque to paycheque is the new norm — up from 60% just a year earlier (2). Nearly half said they’re unable to save for long-term goals like retirement because their income goes straight to immediate needs. Furthermore, the average Canadian puts only 7% of their pay toward savings, well below the commonly recommended 20%.
Ann’s situation is urgent, but it isn’t hopeless. Co-host George Kamel offered some perspective: “The fact that you even decided this at 50 is amazing, because I know you think it’s too late for you, but there’s someone who’s going to call in, probably today, who goes, ‘Hey, I’m 62 and I got nothing saved.’ Ann’s doing great. She’s got a 12-year head start.”
Ann brings home US$2,800 (C$3,800) a month. Her rent takes US$1,500 (C$2,050) of that — more than half her income before she’s paid a single other bill. Plus, she carries a US$450 (C$615) monthly car payment on a vehicle worth US$16,000 (C$22,000), plus US$10,000 (C$14,000) in high-interest payday loans and US$15,000(C$20,500) in medical debt.
Co-host Ken Coleman’s first instinct was the car. Selling it and replacing it with a cheaper vehicle could effectively give her back more than US$5,000 (C$6,800) a year. On housing, Kamel suggested that rent should ideally sit around a quarter of your take-home pay — for Ann, that would be around US$750 (C$1,025) a month. Finding a roommate or moving somewhere cheaper could free up close to US$1,000 (C$1,370) a month alone.
The math Kamel ran was striking: If Ann lowered her rent by US$1,000 and eliminated the car payment, she’d have around US$1,500 a month to work with. At that rate, she could be debt-free in roughly 27 months — and then turn that same US$1,500 toward building savings.
Story Continues
The principle here applies directly to Canadians in a similar position. Housing and transportation are two biggest drains on most budgets, and they’re also the two places where significant changes are possible. Smaller expenses — the streaming subscriptions, the daily coffees — feel easier to cut but rarely move the needle far enough on their own.
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If Ann’s situation prompted you to do a quick mental calculation about your own retirement savings, you’re not alone — and the benchmark can feel daunting.
Fidelity Canada suggests that by age 50, you should ideally have saved around six times your annual income, and ten times by age 65 (3). On a $60,000 salary, that would mean $360,000 put away by 50 and $600,000 by retirement.
If that number made your stomach drop, take a breath. These are targets, not report cards. According to BMO’s 2025 retirement survey, only 21% of people are currently saving more than 10% of their income for retirement — and the bank notes how 10% is the rule of thumb, not a catch-up rate (4).
Starting later means needing to save significantly more, though the gap narrows considerably once Canada Pension Plan (CPP) and Old Age Security (OAS) benefits are factored in. For most Canadians, those government benefits rescue the amount of personal savings you’ll need.
One practical tool worth knowing about: the federal government’s Canadian Retirement Income Calculator (5). It lets you estimate your CPP and OAS payments based on your contribution history and see what gap remains. It’s free, takes about 10 minutes and gives you a far more personalized picture than any benchmark can.
Ann’s situation highlights the true cost of never being taught proper financial management — something many Canadians share. Without anyone to show you the ropes, saving for retirement can feel less like a plan and more like a guess.
The most important thing, The Ramsey Show hosts stressed, is to start. Even modest contributions made consistently over 15 years can grow significantly. This is thanks to compounding — the idea that the money you earn on your savings starts earning money of its own. The longer it runs, the more powerful it becomes.
Starting at 50 instead of 25 means less time for that strategy to work in your favour, which is why reducing expenses and increasing income matters so much when you’re catching up.
If you’re starting later, aim to put a higher percentage of your income — 20% or more if possible — to help close the gap faster. If that feels out of reach right now, start with what you can build up as you focus on decreasing debt.
There is an advantage that is readily available to you — a pair of registered accounts specifically designed to make savings more efficient.
A Registered Retirement Savings Plan (RRSP) lets you contribute up to 18% of your previous year’s earned income (up to $33,810 for 2025) and deduct that amount from your taxable income. That means the Canada Revenue Agency (CRA) effectively helps fund your contribution through a tax refund. The money grows tax-deferred until you withdraw it during retirement, ideally when your income — and tax rate — is lower.
A Tax-Free Savings Account (TFSA) works differently: Contributions aren’t tax-deductible, but every dollar of growth and every withdrawal is completely tax-free. The 2025 contribution limit is $7,000 and if you’ve never opened one, your accumulated room since 2009 could be as high as $102,000.
If your employer offers a workplace pension or group RRSP with matching contributions, that’s the closest thing to free money in personal finance — getting the full match should be your first savings priority before anything else.
Ann called in feeling like she’d failed. What she’d actually done was wake up at 50 with enough time to make a real difference — and the willingness to do something about it.
That matters more than most people give it credit for. If you’re in a similar place, the path forward isn’t mysterious: Cut the biggest expenses first, aggressively tackle high-interest debt and start putting money away in an RRSP or TFSA as soon as you have funds to set aside. CPP and OAS will help bridge the gap in retirement, but they work best as a foundation rather than a plan.
Find a financial advisor who can help you map out a realistic picture — not a frightening one.
— with files from Melanie Huddart
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Youtube (1); H&R Block (2); Fidelity (3); BMO (4); Government of Canada (5)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.