Retirement is something you’ve been working toward your whole life. After years of early mornings, long commutes, and disciplined saving, this is your time — and you deserve to enjoy every part of it.
But making sure your money lasts as long as you need it to? That’s where things can get a little complicated. Between inflation, healthcare costs, and the sheer length of modern retirements, keeping your finances in good shape takes some thoughtful planning.
The good news is that there are real, manageable steps you can take to stretch your savings further — without giving up the retirement you’ve earned.
What You’ll Learn in This Article
- How to build a retirement budget that reflects your real life
- When and how to collect your CPP and OAS for maximum benefit
- Six practical ways to spend less without sacrificing your lifestyle
- Why spending too little can be just as much of a problem
- How your home equity could play a role in your retirement income
Build a Budget That Reflects Your Real Life
Before anything else, get a clear picture of what you actually spend. Many Canadians underestimate their day-to-day costs or forget to account for expenses that tend to grow over time — things like home maintenance, healthcare, travel, or helping out family members.
As a general guideline, most people need about 60–70% of their current income in retirement to maintain their standard of living. Your lifestyle, health, living situation, and sources of money all play a role in determining what that number looks like for you.
When mapping out your retirement budget, consider the following:
- Expenses that typically drop: Commuting costs, work clothing, professional memberships, and lunches out tend to disappear entirely in retirement — freeing up more than many people expect.
- Expenses that often rise: Healthcare, home maintenance, travel, and leisure spending can all grow as you move through retirement.
- Expenses that stay roughly the same: Groceries, utilities, insurance, and property taxes tend to remain relatively stable.
A written budget that honestly reflects your plans can be one of the single most useful financial tools you have heading into retirement.
Time Your Government Benefits Wisely
Your CPP and OAS payments are two of the most reliable income sources in retirement — but how and when you start collecting them makes a real difference to how much you actually receive.
If you choose to delay your Old Age Security (OAS) pension, your monthly amount will increase each month you wait, up to age 70. Similarly, you can defer your CPP to increase your monthly payment. Waiting until 70 to collect CPP can increase your payment by up to 42% — a significant boost over the course of a 20- or 30-year retirement.
A few things to keep in mind when planning your benefit timing:
- Draw from your TFSA first, where possible. TFSA withdrawals don’t count as taxable income, so they won’t push you toward an OAS clawback or affect your GIS eligibility.
- Delaying benefits requires a bridge. You’ll need enough in savings or other income to cover the gap between when you retire and when you start collecting. A financial advisor can help you work out whether deferring makes sense for your situation.
- CPP and OAS can be timed independently. You don’t have to start both at the same time — you can claim your OAS pension at age 65 and wait until you turn 70 before applying for your CPP retirement pension.
Six Practical Ways to Spend Less Without Sacrificing Quality of Life
1. Make the most of age-based discounts
Every major bank offers fee-free chequing and higher-rate savings accounts once you reach 60 or 65. Carrying proof of age can also cut everyday bills instantly — from Shoppers Drug Mart’s 20% Thursday discount to reduced transit fares. These are easy savings that many people simply forget to claim.
2. Review your insurance coverage
Enrolling in your province’s senior drug plan the month you turn 65, and adding a modest extended-health policy to plug gaps in dental, vision, and out-of-country coverage, is a smart move. Shopping these plans annually pays off — premiums vary widely, and many insurers waive medical underwriting if you apply within 60 days of leaving an employer plan.
3. Right-size your transportation
If you now drive mostly to the grocery store, a lightly used hybrid — or even a car-share program — can slash insurance, fuel, and depreciation costs. Dropping from two cars to one is another option many retirees find frees up several hundred dollars a month.
4. Reduce your utility bills
Smart thermostats, LED bulbs, and running appliances during off-peak hours shave hydro costs month after month. Provincial energy-efficiency rebates can also help subsidize upgrades like heat pump installations or added insulation.
5. Be strategic about withdrawals
Without careful planning, tax time can come as a shock for retirees who may find they owe money for the first time in their lives, says Nicole Ewing, Director of Tax and Estate Planning at TD Wealth. The order in which you pull from different income sources can determine the tax consequences you face — and getting it right can allow your remaining funds to continue growing. Working with a financial planner to map this out is time well spent.
6. Invest in your health
Think of a gym membership, a pickleball pass, or a home garden as a hedge against diabetes, cardiac complications, and costly mobility aids — both wallet- and life-extending. Preventative wellness is one of the most underrated financial tools in retirement.
Don’t Let Caution Keep You from Enjoying What You’ve Saved
Here’s something worth saying out loud: one of the most common retirement money challenges isn’t spending too much — it’s spending too little.
Nicole Ewing at TD Wealth describes couples with millions in savings who were still terrified to spend anything, wondering whether they could afford a trip or vacation. Without a financial strategy, many people worry about meeting future costs during retirement — causing them to oversave and even deny themselves the enjoyable lifestyle they were saving for in the first place.
The goal isn’t to scrimp through your retirement years. It’s to spend with confidence, knowing your plan can support it. A clear, written plan — built with a trusted financial advisor — makes all the difference.
Your Home May Be Your Most Overlooked Financial Resource
If you own your home, there’s a good chance your biggest asset hasn’t been fully factored into your retirement income plan. Through the CHIP Reverse Mortgage from HomeEquity Bank, Canadian homeowners 55 and up can access up to 55% of their home’s appraised value as tax-free cash — with no monthly mortgage payments and no requirement to move.
The funds can be used however you need:
- Topping up your monthly income
- Covering unexpected healthcare costs
- Helping out family members
- Giving yourself more financial breathing room day-to-day
And because the money is a loan, it doesn’t count as taxable income — so it won’t affect your OAS or GIS benefits. It’s one more way to make your retirement work for you, on your terms.
Curious about how much your home could be worth to your retirement plan? Get your free CHIP Reverse Mortgage estimate today.
Frequently Asked Questions
How much money do I need to retire comfortably in Canada?
There’s no single answer — it depends on your lifestyle, where you live, and how long your retirement lasts. As a general guideline, most people need about 60–70% of their pre-retirement income to maintain their standard of living. Tools like the Government of Canada’s Retirement Income Calculator can give you a more personalized estimate.
When should I start collecting CPP and OAS?
The standard age to start CPP is 65, but you can begin as early as 60 or delay until 70. Delaying increases your monthly payment, while starting early reduces it. OAS follows a similar structure, with monthly increases for each month you defer past 65, up to age 70. The right timing depends on your health, income needs, and other savings.
Will a CHIP Reverse Mortgage affect my government benefits?
No. Because the funds from a CHIP Reverse Mortgage are a loan, they are not added to your taxable income and do not affect benefits like OAS or the Guaranteed Income Supplement (GIS). You can use the funds freely without worrying about clawbacks.
What’s the easiest way to reduce spending in retirement without changing my lifestyle?
Start with the things that don’t require any sacrifice: banking bundles designed for those 60 and older, age-based retail discounts, and reviewing your insurance coverage annually. These are low-effort changes that can save you hundreds of dollars a year without affecting how you actually live.
Do I need a financial advisor in retirement?
While it’s not a requirement, working with a financial advisor can make a meaningful difference — especially when it comes to tax-efficient withdrawals, OAS clawback planning, and building a decumulation strategy. A financial program that gives you both confidence and motivation to spend is often what it takes to truly enjoy your retirement.
The information provided in this article is intended for educational purposes only and does not constitute financial, legal, or tax advice. Every individual’s financial situation is unique, and the strategies or tips discussed here may not be suitable for everyone. Before making any financial decisions, we strongly encourage you to speak with a qualified financial advisor, tax professional, or legal expert who can assess your personal circumstances and provide guidance tailored to your needs.