Skip to main content



Costs don’t stop at retirement – make sure your income doesn’t, either

5 minute read

How much do you actually need to retire?

You've likely heard retirement advice your whole life, and now you're wondering how much of it is practical for you. Traditional advice suggests that you can live on about 70% of your pre-retirement income after retiring. But how can that be the case, when costs don’t stop in retirement? And just how fast does 70% of your income go if you’re not used to living off of it? 

Saving for retirement today is definitely a challenge for today’s retirees: 


But even in light of these statistics, your outlook on retirement shouldn’t be all doom and gloom. In fact, there’s there’s a lot of fun to be had with all your new-found time off. Retirement means more leisure time, and you’ll want to fill that time with hobbies, travel and entertainment.  

However, there's one problem: those activities and adventures cost money. So how can you ensure your income will carry you through? 


Leverage pension, benefits and tax credits 

Pre-retirement, your income is largely determined by your salary. While tax credits and other supports might not be entirely enough, help from the Canadian Pension Plan, Old Age Security and post-retirement tax breaks can pad out your retirement nest egg.

Let’s look at a 50-year-old Canadian prospective retiree who currently makes $80,000 and wants to maintain the standard of living they have enjoyed even after retiring. Here’s what they would consider: 


Expected retirement age 


Average life expectancy 


Current value of RRSP 


Monthly RRSP contributions to age 65 


Expected annual RRSP rate of return 

7% (6% after retirement) 

Annual RRSP income in retirement 


Current value of TFSA/additional savings 


Monthly savings contributions to age 65 


Expected annual savings rate of return 

5% (4% after retirement) 

Additional income 


Additional annual income in retirement 


Monthly workplace pension payments 


Monthly Canadian Pension Plan (CPP) payments* 


Annual pension income 


Old Age Security (OAS) 


Total estimated retirement income 


*CPP payments will vary based on individual contributions over the past 40 years. As of 2023, the average monthly CPP payment is $772.71.

In this case, our retiree—like 62% of Canadians—has no workplace pension. Based on these calculations, their post-retirement income from RRSP and savings is just over $61,000. With CPP and OAS, the total is just shy of this $80,000 goal. 

After age 75, OAS increases to $9,341, raising the total income to $80,270.

Want to see what your retirement income amount looks like? Try our retirement planner to determine how much you'll need to save to retire your way. 

Managing taxes in retirement

Your income, including pension payments, is still subject to tax. With that said, there are tax credits and strategies that can help you make the most of your retirement savings: 

  • Age amount: Allows Canadians over age 65 with income under a certain level a credit defined by each tax year.
  • Pension splitting: Eligible pension income can be transferred to a lower-income spouse or common law partner. 
  • Pension income amount: Certain pension income may be eligible for credit of up to $2,000. 
  • BC Home owner grant for seniors: The home owner grant reduces the property taxes seniors pay for their principal residence.  
  • BC Home renovation tax credit for seniors: Provides a credit up to $10,000 for renovations to a senior’s primary residence.  
  • Medical expense claim: Eligible costs can be claimed if they exceed 3% of your income or a threshold amount. 

Make your costs last your whole retirement

Planning out how to make your retirement income last requires exactly that: planning. By understanding how to grow your savings into income, you can maintain your lifestyle without the financial anxiety.  

Have some questions about what your retirement income will look like? We recommend speaking to an advisor to discover a plan that works for you.

Talk to an advisor about a retirement plan that works for you.

Start with a free 15-minute consultation.

Call us at 1-888-597-1083, visit us in branch, or fill in the form below and an advisor will reach out to you.