Retirement Has Changed In Canada

As the golden years of retirement draw near, it’s important to remember that your desires and plans may have changed over the years. And that’s okay! But, it’s crucial to reassess and potentially adjust your retirement plan to align with your current goals and aspirations.

Don’t forget to factor in the unexpected. Life has a funny way of throwing curveballs, but having a solid financial plan in place can make all the difference in ensuring a comfortable and fulfilling retirement. The key to success is starting early and having open, honest discussions with your family and financial advisor about your vision for your retirement.

There’s no one-size-fits-all answer to the question of when the perfect age to retire is, as every individual’s situation is unique. But, whether you’ve been counting down the days for years or are still uncertain, taking the time to plan and prepare for retirement is crucial for making your dream retirement a reality.

The timing of your retirement may vary, whether it’s at 55, 60, 65, 70 or somewhere in between. But, being prepared and having a solid financial plan in place can help you make the most of your golden years.

How Much Do You Need To Retire In Canada?

The million-dollar question (figuratively speaking, of course!) when it comes to retirement planning is “How much money do I need to retire?” Unfortunately, there’s no easy answer. The amount you need to retire will depend on various factors like your desired lifestyle, where you want to live, and what you want to do in your golden years.

A helpful starting point is thinking about what percentage of your current income you want to replace in retirement. Many financial experts recommend the “70% rule” as a guideline, meaning that your retirement savings should aim to replace 70% of your current income per year. For instance, if you’re earning $100,000 annually, you should aim for a retirement income of roughly $70,000 per year, or about $5,833 a month before taxes.

It’s also important to remember that we’re living longer, so you may need to plan for 20-30 years or more of retirement. When considering the length of your retirement and how long your savings will last, it’s best to overestimate the length of your retirement to ensure you have enough funds to cover your expenses.

Leave money to the kids or charity?

Early on in your retirement, make a plan. Does that include leaving a stack of dough to your kids? Or are you going to die at home and leave them the house? [May want to get one of then on title to avoid the probate tax & delay.]

Anyway, if you’re leaving money in your estate, then you cannot spend that. So planning must take that info account.

Retirement Income Options

As you approach retirement, it’s important to understand the different sources of income that can help support you in your golden years. In Canada, there are three main sources of retirement income: government benefits, employer pensions, and personal investments and savings. Let’s dive into each of these options.

Government Income

The government offers several financial benefits to eligible Canadians in retirement, including the Canada Pension Plan, Old Age Security, and the Guaranteed Income Supplement. Depending on your financial circumstances, you may be eligible for one or more of these programs.

Work-Related Pensions

If you’ve worked for an employer for a period of time, you may be entitled to a pension when you retire. There are two main types of pensions offered by employers in Canada: Defined Contribution Pension Plans and Defined Benefit Pension Plans.

Personal Investments

In addition to government benefits and work-related pensions, your personal investments and savings can also play a role in supporting you in retirement. This may include investments such as RRSPs, annuities, and TFSAs. These investments, which you may have been contributing to for years, can now be used to help provide you with a steady stream of income in retirement.

Continuing to Grow Your Money in Retirement

Just because you’re retired, doesn’t mean you have to stop investing and building your portfolio. In fact, it’s important to consider how you can continue to grow your money in retirement. It starts with examining your retirement income and ensuring you have enough set aside for investing and saving.

By taking steps to grow your money during retirement, you’ll be putting yourself in a better position to pursue all the exciting things you’ve been looking forward to for so long.

One option to consider is investing in a segregated fund policy, which offers guaranteed protection and the potential for growth. You could also explore combining segregated funds with an income annuity to provide a regular source of income in retirement. These options can help protect your investment from market fluctuations, giving you peace of mind as you enjoy your golden years.


What is an annuity? You give your money or some of it to an insurance company. They agree to pay you for life. There are refinements life paying your surviving spouse, guarantee to pay you a minimum number of years if you die young & others. So, you’ve traded your beans, Jack, for a promise of money. It’s actually very relaxing. You get paid. You don’t have to watch the stock market. If you have good genes, the insurer has to pay you long after you would have run out of money.

The downside? You can’t pass that money on to the kids. You can’t buy a yacht. Inflation will eat into that income stream.

Here’s a story. We have a client who is 99 years young. When she was 85 she sold her house and paid $250k for an annuity. Because she was 85 at time of purchase, she was offered a 10% annual payment stream [monthly payments]. Because she was 85, the was NO income tax to be paid. She is still collecting. The insurer sends a letter every year that she must sign to prove that she’s alive. She is eating their money. Her genes are good AND she hasn’t run out of money. She sleeps well at night.

Retirement Doesn’t Mean Saying Goodbye to Work

Retirement doesn’t have to mean the end of work altogether. If you’re looking for additional retirement income, why not consider turning one of your hobbies or passions into a job? Working during retirement can be a great way to explore new interests and pursue passions you’ve always wanted to try. You continue to meet people.

For many of us, our careers have been focused on the 9-5 grind, working to pay bills and save for the future. But now, in retirement, you have the opportunity to redirect your focus to something you’re truly passionate about. Whether it’s starting a small business based on your hobby or taking on a part-time job that aligns with your interests, there are plenty of ways to stay active and engaged in the workforce during your golden years. Work shorter hours. Tell the boss to take a hike [he needs you more than you need him.] You no longer have to save. My suggestion: work enough hours to pay your living expenses OR enough to pay for your vacations & hobbies.

Embrace the Experience

As you prepare for retirement and work with your Certified Financial Planner from Pension Solutions Canada to finalize your plans, it’s important to keep in mind the excitement of this new chapter in your life. Take some time to evaluate what you want your retirement to look like and what you want to focus on.

Retirement is a unique opportunity to prioritize the things in life that may have taken a back seat during your working years. Whether it’s traveling, spending time with loved ones, pursuing hobbies, or simply relaxing, the life of a retiree can be everything you want it to be. So, as you plan for retirement, be sure to enjoy the experience and look forward to all the adventures that lie ahead.

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