Ready, set, retire: Your ultimate guide to retirement planning at any age

July 17, 2025

Drew Maginn

As a Canadian who grew up in the 1980s and 1990s, thoughts of retirement planning often evoke images from an infamous Freedom 55 commercials produced by London Life. A fit, sun-kissed couple with salt and pepper hair, living their best retired lives on a sailboat, running on a path alongside a beach, or enjoying other semi-nautical-inspired young retirement goals.

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While retirement at 55 is still an aspiration for some, post-millennium factors, including volatile financial and job markets, an increase in the overall cost of living, people having kids and purchasing homes later in life, and an overall increase in life expectancy, means that both the Freedom 55 ad campaign and the likelihood of sipping coffee on a boat in our mid-fifties have been set adrift and replaced by financial plans that include part-time consulting in your 60’s, easing into retirement at 66, and redefining what retirement means. Statistics Canada reports that the current average age of retirement in Canada is 65.3. That number is expected to increase.

Most of us have seen charts that emphasize the impact retirement planning can have on meeting our personal goals. Still, we could benefit from further guidance on financial planning and enhancing retirement savings strategies.

The building blocks for creating a customized retirement plan

Use your current budget to estimate your living expenses in retirement to create a realistic budget that accounts for inflation but also factors in that you’ll no longer need to include commuting to work in your monthly expenses

Review your retirement income sources, such as pensions, RRSPs, Canada Pension Plan, and other investments, as well as how and when you plan to utilize them

Prepare for medical and health care needs; while you may be healthy now, you will want to include room in your budget for nursing care, cleaners, and assisted living costs

Look at where you want to live in retirement

Determine if there is anyone you will be financially supporting in your retirement

Set goals toward eliminating debt and paying off mortgages before retirement, or consider downsizing in retirement to free up more funds to help afford the lifestyle you seek

Think about how you want to spend your time in retirement and include that in your budget

Determine if you plan to work in retirement and for how long

Set a realistic savings plan to work toward your retirement goals, and review it regularly

” Whether it’s through your workplace or a hired money manager, professional financial advisors can help you make a retirement plan that will allow you to meet your retirement goals and pivot when needed ”

Setting retirement savings goals

The Government of Canada recommends starting to save a portion of every paycheque you earn, if you can afford it, by balancing your current financial priorities with your retirement savings. Additionally, it suggests consulting with your preferred financial institution to find the right plan that fits your needs. You can also access a free online budget planner tool to help you create a budget that takes retirement into account.

The ABCs of RRSPs

Understanding different savings plans can help you decide the best way to plan for your future retirement. Below are some of the most common retirement plans available to Canadians.

An Individual Retirement Account (IRA) is an account that, depending on its type, allows individual contributions to grow tax-deferred or tax-free.

Registered Pension Plans (RPPs) are established by a company or union to provide pensions to their employees; these plans are registered with the Canada Revenue Agency (CRA). RPPs are funded by the employer and the employee, or sometimes just the employer. Investment earnings grow tax-free, and contributions made by employees to their RPP are tax-deductible. However, account owners will pay tax when they receive the funds. The rules for withdrawing from your RPP depend on your province and your specific plan.

Registered Retirement Savings Plans (RRSPs) are individual retirement plans that allow you to save for retirement. They are registered with the CRA. Investment earnings grow tax-free, and contributions made to an RRSP are tax-deductible. Earnings are not taxed until withdrawn, and you can usually withdraw them at any time if they are not locked in. There are certain times when you can withdraw from your RRSP tax-free, such as via the Home Buyer’s Plan (HBP) or the Lifelong Learning Plan (LLP), but you are required to repay the amounts that you have withdrawn.

A Tax-Free Savings Account (TFSA) is a registered Canadian savings account that allows you to invest and receive earnings tax-free. Funds can be withdrawn at any time without taxation.

Tips for retirement planning in your 20s and 30s

Start early, even if your contributions are small, as the earlier you start investing, the more time your money will have to gain interest and grow
Manage your debt and build a positive credit rating
If you have an opportunity to invest in a group RRSP or RPP, do it, especially if your employer matches contributions
Work on improving your financial literacy
If you have a defined benefit pension plan, consider this in your retirement savings planning
Understand that there are competing expenses, such as buying a house, paying off student loans, or raising a family, that may reduce the amount you can save for retirement
Invest bonuses, raises, and personal windfalls

Tips for retirement planning in your 40s

Set realistic retirement goals based on your current savings
Invest appropriately based on your age and the amount of time before you plan to retire
Make retirement planning an intentional priority
If you have a defined benefit pension plan, consider this in your retirement savings planning
Increase your retirement savings when the costs of student loans, debt, mortgages, and raising a family subside
Invest bonuses, raises, and personal windfalls
Work on improving your financial literacy

Tips for retirement planning after 50

Invest bonuses, raises, and personal windfalls
Work on improving your financial literacy
Track your spending to determine your financial health and to get a better idea of how much you’ll need to set aside for your retirement budget
Work with an investment professional and consider minimizing the risk in your investments and maximizing your savings as you approach your target retirement age
Understand that changes in health and caretaking for others may impact your retirement plan

Understand the value of professional advice

Whether it’s through your workplace or a hired money manager, professional financial advisors can help you make a retirement plan that will allow you to meet your retirement goals and pivot when needed.

Final thoughts

Remember that your retirement strategy will likely evolve, and that’s normal. By being well-prepared and having a solid understanding of your budget and the financial sacrifices you’re willing to make for retirement, you’ll put yourself on the best path possible given your circumstances.

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