Forget the 10-per-cent rule when it comes to retirement savings. For years, Canada's average personal savings rate has been below five per cent of annual income.

That well-worn advice — sock away a tenth of your income to build up a reserve for retirement — has been blatantly disregarded since the mid-1990s, when the country's savings rate plummeted.

The resulting gap between what people should squirrel away for their golden years and what they are saving has financial experts and governments more than a wee bit worried. With the first year of baby boomers hitting age 65 last year, the lack of long-term savings looms large.

That's part of the reason the federal government says it introduced the tax-free savings account in its 2008 budget, hoping to jumpstart a personal savings rate that sank to 2.5 per cent the year prior.

It's too soon to tell what the effect of TFSAs has been, but this much is clear: From a peak of more than 20 per cent of income in 1982, Canada's personal savings rate registered just a quarter of that in 2010, according to Statistics Canada data.

It's difficult to say exactly why. Consumer spending is up as a portion of income, as are "transfers to government" (statisticians' term of art for taxes). And interest rates on bonds, GICs and savings accounts are way down, providing less incentive to stash away money.

Regardless of the reasons, if Canadians don't start ponying up more for the piggy bank, their golden years could well turn to brass.

The graph below shows the personal savings trend over the past 35 years.