Final answer:
The primary challenge for middle-income Canadians in saving for retirement is the high cost of living, which significantly reduces their capacity to save. Lack of employer pension plans also contributes to the challenge.
Step-by-step explanation:
The main challenge faced by middle-income Canadians in saving for retirement is the high cost of living. While many workers save for retirement when their current income exceeds their needs, various factors can impact their ability to do so.
The cost of living, which includes expenses such as housing, food, healthcare, and transportation, is a significant factor that can consume a large portion of one's income, leaving less available for savings. In addition to the high cost of living, lack of access to employer pension plans can also make it challenging for many to save enough for retirement.
Moreover, the presence of government programs like Social Security may influence the amount of financial capital individuals decide to save, as there is evidence suggesting that such programs may reduce the need for personal savings.