Preparing for retirement doesn’t need to feel overwhelming. In fact, there are a few simple steps you can take right now that could dramatically improve your confidence and clarity heading into retirement.
These six tips often come up in conversations with clients and they can be the difference between retiring with questions and retiring with peace of mind.
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1. Get Access to Your CRA My Account
If you haven’t already set up your CRA My Account, this should be your first step. This portal gives you direct access to your TFSA and RRSP contribution room, as well as important tax information we often use when building income plans.
With your CRA account, you can:
- Check your available TFSA and RRSP room
- See if a final RRSP contribution makes sense
- View any carry-forward capital losses
- Avoid tax surprises and keep your plan efficient
It’s a key tool for managing taxes in retirement.
2. Review Your CPP Estimate with My Service Canada
Your CPP pension will likely make up a large portion of your retirement income. But how much you receive depends on your contribution history and when you decide to start the benefit.
By logging into your My Service Canada account, you can:
- See your personalized CPP estimate
- Evaluate whether it’s better to start CPP at 60, 65, or 70
- Avoid guessing and base your plan on real numbers
We use this data with nearly every client when building income projections.
3. Consolidate Your Accounts
Many retirees have RRSPs, TFSAs, and investment accounts spread across multiple institutions. While this might not seem like a big deal, it can lead to unnecessary complexity and even higher fees.
By consolidating accounts, you can:
- Simplify your retirement income planning
- Avoid missed tax slips or conflicting investment strategies
- Potentially reduce investment fees
- Eliminate paperwork from multiple sources
It also makes it easier for your advisor to create a coordinated strategy and avoid any surprises come tax time.
4. Review Your Spending — Without Budgeting
You don’t need to create a strict budget, but having a clear idea of your monthly expenses is critical.
We recommend:
- Tracking spending for a few months
- Separating fixed vs. discretionary expenses
- Projecting how costs will shift in retirement (for example, less commuting and more travel)
This helps you determine how much income you’ll actually need and whether your savings will support that lifestyle.
5. Use the Three-Bucket Portfolio Strategy
Your retirement portfolio should be structured differently than it was during your working years. One simple approach is the three-bucket strategy:
- Bucket 1 (Years 1–2): Low-risk investments for near-term withdrawals
- Bucket 2 (Years 3–8): Conservative investments for mid-term needs
- Bucket 3 (Year 8+): Growth-focused investments for long-term goals
This strategy protects you from bad market timing while still allowing your portfolio to grow over time.
6. Understand How Different Income Sources Are Taxed
Not all income is taxed the same. Understanding the difference between total income, net income, and taxable income can help you avoid unnecessary taxes.
Here’s a quick breakdown:
- RRIF withdrawals, CPP, OAS, and pensions are fully taxable
- Non-registered accounts produce interest, dividends, and capital gains, each taxed differently
- TFSA withdrawals are tax-free
- Net and taxable income are used to determine eligibility for credits and OAS clawbacks
Knowing where your income falls within your tax brackets helps you avoid the clawback and keep more of your retirement income.
Final Thoughts
Preparing for retirement isn’t about perfection. It’s about progress. These six tips can help you gain clarity, reduce stress, and create a stronger retirement plan.
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