First of all, consider yourself lucky that you are one of the few remaining workers in Canada that can still count on a pension plan at work. The once common defined benefit pension plan that paid out a guaranteed amount to a retiree every year until death is quickly dying out. In its place, most employers will offer to match any retirement contributions you make to your RRSP, up to a certain amount and then it’s up to you to decide what to do with this savings.
If you are extra lucky, your defined benefit pension pension also increases its yearly payment to you based on the rate of inflation. An “indexed” pension is the gold standard and very few people have one.
To answer the question above: if you have an indexed pension plan and you will have qualified for a full pension, usually after 30+ years of continuous service, there is no need to save further for retirement. Pensions use different methods of determining what your yearly payment will be, but after 30+ years of working, your pension will most likely be around 60% of your working years income. This is more than the 50% rule that we are striving for, so you don’t need any other savings.
Just make sure you have paid off all your debts, including your mortgage before your retire.
If you do not have enough qualifying years for a full pension, because you started your career late or took time off to raise a family, you may or may not need to suplement your pension plan savings to make sure you have enough to retire comfortably.
I’m a department head for a high school in Toronto. I graduated from the Ivey School of Business at Western University and have been a DIY investor for over 20 years.