Retirement Planning for 2025: 4 Steps to Take Now is all about helping you retire with clarity and confidence in an uncertain economic climate. Whether you’re a few months out or just starting to plan seriously, these four key areas will help you avoid costly mistakes, reduce tax stress, and make the most of your retirement years.
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#1 Get Laser Focused on Your Expenses
One of the biggest transitions into retirement is going from earning money to spending it. That shift can feel uncomfortable unless you know your numbers.
Break your expenses into three simple categories:
- Fixed expenses: things like property tax, utilities, food, insurance, and healthcare
- Discretionary spending: travel, dining out, or hobbies
- One-time expenses: a new vehicle, home renovation, or other large purchases
This step isn’t about cutting back. It’s about knowing what you need to maintain your lifestyle without fear of running out.
#2 Create and Stress Test a Tax-Efficient Income Plan
Once you understand your expenses, you can build an income plan that’s both sustainable and tax-efficient. Here’s what that looks like:
- Decide when to take CPP and OAS
- Don’t default to minimum RRIF withdrawals — consider drawing earlier
- Plan how to use your TFSA, RRSP, and non-registered accounts
- Make sure your non-registered portfolio is invested in a tax-efficient way
And once your plan is built, stress test it. What happens if inflation runs higher? What if investment returns are lower? Can your plan still hold up?
A good retirement plan works even in a worst-case scenario.
#3 Structure Your Portfolio into Buckets
Market volatility in retirement isn’t just annoying, it’s dangerous. The last thing you want to do is panic sell when the market dips. That’s where the bucket strategy helps.
Split your retirement portfolio into three buckets:
- First Bucket: Money you’ll need in the next 2 years — keep it safe
- Second Bucket: Money for years 3 to 8 — moderate risk
- Third Bucket: Money you won’t touch for 8+ years — long-term growth
This strategy helps protect short-term needs while still giving your investments time to grow. It also gives you peace of mind when markets are rough.
#4 Review Your Estate and Withdrawal Plan
A solid estate plan isn’t just about who gets what. It’s about minimizing taxes at death and making sure your withdrawal strategy is actually working.
Ask yourself:
- What taxes will my estate pay based on my current plan?
- Am I leaving my heirs with a big tax bill I could have reduced?
- Should I gift funds to kids now while I’m alive?
- Would a life insurance policy be a tax-efficient way to offset estate taxes?
If you’re leaving behind large registered account balances, that’s often a sign your withdrawal plan could be improved.
Final Thoughts
There’s a lot to consider when retiring in 2025. But it’s not about guessing or hoping — it’s about planning intentionally.
These four steps will help you:
- Understand your real spending
- Build a tax-efficient income plan
- Avoid emotional investing mistakes
- Leave more to your family, not to taxes
If you’d like a second set of eyes on your retirement plan, or just want to make sure you’re not missing something important, we’re here to help.
