Many people in their 50s and 60s ask themselves the same question: Do I have enough to retire? Retirement planning is more than just reaching a certain number in your savings account. It’s about knowing where your income will come from, what your expenses might be, and whether you’re truly prepared for this next stage of life.
Here’s how to assess your readiness with clarity.
Understand Your Income Sources
When you retire, your income will likely shift from employment to a mix of different sources:
- Canada Pension Plan (CPP): Payments are based on your contribution history. You can begin as early as age 60 or delay to receive more.
- Old Age Security (OAS): Starts at age 65 for most Canadians and may be subject to a clawback depending on your income.
- Personal savings and investments: RRSPs, TFSAs, and non-registered accounts will likely form the core of your retirement withdrawals.
- Employer pensions: If you have a defined benefit or defined contribution pension, this can provide a reliable income stream.
- Other income: Rental properties, part-time work, or business income may also contribute.
Planning how and when to draw from these sources can help maximize income while reducing taxes over time.
Estimate Your Future Expenses
Many people assume they’ll spend less in retirement, but that isn’t always the case. Your spending will depend on your lifestyle and personal goals.
Some common retirement expenses include:
- Everyday costs like groceries, property taxes, and utilities
- Housing, whether you own or rent
- Health care, including dental, prescriptions, and private insurance
- Travel, hobbies, or new activities
- Helping children or grandchildren
- Home maintenance and vehicle expenses
It’s also important to account for inflation. Prices for most goods and services will rise over time, which means your spending may increase even if your lifestyle stays the same.
How to Prepare Yourself
Preparing for retirement isn’t just about money. It also requires adjusting your mindset, understanding your lifestyle needs, and building confidence in your plan.
Ask yourself:
- Have we tested living on a reduced income?
- Do our spending habits reflect our long-term priorities?
- Have we stress-tested our plan for things like market volatility or health issues?
- Are we emotionally ready to shift away from our working identity?
Behavioral cash flow planning can help align your spending with your values, giving you a clearer picture of what retirement will actually look like.
Book a Free Consultation to Assess Your Retirement Readiness
Let’s look at your full picture together, so you can make informed choices and retire with peace of mind.
