Planning for retirement doesn’t have to be overwhelming—but it does start with one very important number: how much you spend in a year.
Most Canadians thinking about retirement focus on how much they’ve saved or how their investments are doing. But here’s the truth: you can’t build a solid retirement income plan if you don’t know what your lifestyle actually costs.
The good news? Figuring it out is easier than you think.
Step One: Know Your Spending
Most people have one or two accounts they use for everyday life—where credit card payments, bills, withdrawals, and transfers all happen. Just look at your monthly bank statements and total up the withdrawals and debits for the past 12 months.
This gives you a clear, no-guesswork number: how much money leaves your account each year.
💡 Don’t be surprised if it’s 30% more than you expected—this happens to almost everyone.
Once you’ve got that number, you know what you’ll need your retirement income to cover annually. From there, you can start shaping your plan.
Think of Your Retirement Plan Like a House
It’s helpful to think of retirement planning as building a home: there’s the foundation, the walls, and the roof—each part playing a key role in creating a structure that’s secure, comfortable, and built to last.
Let’s break it down:
🧱 The Foundation: Secure, Predictable Income
Your foundation should be built with reliable income that lasts as long as you do. These are the funds you’ll use to pay for your basic needs—housing, food, utilities, and so on.
This includes things like:
- CPP and OAS (Canada Pension Plan and Old Age Security)
- Company or government pensions
- Rental property income
- Guaranteed income products like lifetime annuities
If you have a defined benefit pension, look into options like joint-and-survivor benefits, which ensure income continues for your spouse if something happens to you.
Planning tip: Delaying CPP and OAS past age 65 can increase your monthly payments significantly—sometimes a smart move if you have other savings to draw from in the meantime.
🧱 The Walls: Steady, Low-Risk Investments
These are your conservative investments—safe, income-producing assets that support the foundation and provide some flexibility.
Common options include:
- High-interest savings accounts
- GICs (Guaranteed Investment Certificates)
- Government or investment-grade bonds
- Fixed annuities
These funds can be used for travel, hobbies, gifts, or larger one-time expenses. They offer more accessibility than your foundational income sources but still prioritize stability over growth.
They also help protect your lifestyle in the early years of retirement, when you may be more active and spending more freely.
🏠 The Roof: Long-Term Growth Investments
Once your core expenses are covered and your walls are up, you can start thinking about the roof—your growth-oriented investments.
These are assets that can rise (and sometimes fall) in value, but over time, help your portfolio keep up with inflation and grow your wealth.
This might include:
- Stocks and equity mutual funds
- ETFs (Exchange-Traded Funds)
- REITs (Real Estate Investment Trusts)
- Precious metals or other long-term holdings
These investments should have a 10-year+ time horizon, meaning you don’t rely on them for day-to-day needs. They’re there for future flexibility, wealth preservation, and even legacy planning.
A helpful rule of thumb: The Rule of 100
Subtract your age from 100—that’s roughly the maximum percentage of your portfolio that could be invested in higher-risk assets. So if you’re 60, consider capping riskier investments around 40%.
Need Help Organizing the Numbers?
We’ve got the tools to help. Use our free Mortgage Affordability Calculator to see how your home-related expenses might shift during retirement, especially if you’re carrying a mortgage or considering refinancing for cash flow.
Final Thoughts: Retirement Is a Long Journey—Plan Accordingly
Retirement isn’t a weekend getaway—it could last 25 to 30 years or more. A solid plan gives you confidence that your income will last, your lifestyle will be protected, and your future is secure.
Like a well-built home, your retirement income strategy needs a strong foundation, reinforced walls, and a weather-ready roof.
Ready to build yours?
📩 Contact The Local Broker for personalized guidance on making your mortgage—and your money—work smarter for retirement.
