Age 55 comes with even more stress than you’re already dealing with. Suddenly, retirement is knocking at the door. That’s when rules such as “have six times your salary saved” start appearing. Helpful? Maybe. Yet salary tells you surprisingly little about how much retirement will actually cost.
Someone earning $120,000 with a paid-off mortgage could need less than someone earning $80,000 who expects to rent indefinitely. A better number starts with spending.
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Find the gap
Estimate what you’ll spend annually in retirement, then subtract reliable income such as Canada Pension Plan (CPP), Old Age Security (OAS) and a workplace pension. What remains is the amount your investments need to provide.
Current government benefits offer a useful reference point. The average CPP payment for new 65-year-old beneficiaries was $877.01 monthly from July through September 2026. The maximum OAS payment for someone aged 65 to 74 is currently $762.50 monthly.
Your actual amounts could be very different. CPP depends on contributions and starting age, while OAS depends partly on years of Canadian residence and can face the recovery tax at higher incomes. Still, suppose someone expects $60,000 of annual retirement spending and roughly $20,000 from CPP and OAS in today’s dollars. Their portfolio needs to supply about $40,000.
Work backwards from 65
Using a rough 4% starting-withdrawal guideline, the above suggests a retirement portfolio around $1 million. That number is considerably more useful than “six times salary.” At 55, compound growth still has 10 years to help.
A $558,000 portfolio growing at a hypothetical 6% annually would reach roughly $1 million by 65 without another contribution. Starting with less doesn’t wreck the plan. Someone with about $513,000 today who added $500 monthly and earned 6% could also approach $1 million over the next decade.
Those are illustrations, not promises. Inflation, investment returns and retirement timing will move the target. Yet now, investors have a number they can actually work toward. The next question becomes what deserves a place in that portfolio.
POW
Power Corporation of Canada (TSX: POW) is one I’d consider for the income portion. Power is a holding company with major interests in Great-West Lifeco and IGM Financial, giving shareholders exposure to insurance, retirement services, wealth management and asset management. Essentially, it owns businesses that make money helping everyone else prepare for retirement, which is highly convenient.
Second-quarter adjusted net earnings reached $974 million, up from $883 million a year earlier. Adjusted earnings per share (EPS) climbed to $1.55 from $1.38. Power also returned $1.5 billion to shareholders through dividends and share repurchases during the first half of 2026.
The company also raised its quarterly dividend 9% this year to $0.67 per share, or $2.67 annually. At a recent price around $89.25, that’s roughly a 3% yield. The more interesting valuation number is net asset value (NAV). Power reported adjusted NAV of $112.94 per share at the end of June. The recent share price therefore sits about 21% below that figure. That doesn’t guarantee the discount closes. Holding companies can trade below the value of their underlying businesses for years.
Bottom line
Financial markets are a risk, however. Falling asset values can reduce wealth-management fees, while insurance results, interest rates and economic weakness can pressure Great-West. POW belongs alongside other Canadian dividend stocks, not as someone’s entire retirement account.
So at 55, I wouldn’t obsess over whether savings equal five, six or seven times salary. Calculate the annual retirement-income gap instead. If investments need to provide $40,000 annually, a rough $1 million retirement target gives you something concrete to attack over the next decade.
Power Corporation can contribute growing dividends and financial-sector growth along the way. The more important number, though, is the gap between the retirement you want and the income already waiting to fund it.
