Snippet Bait: Retirement financial planning in Canada means coordinating your RRSP, TFSA, CPP, and OAS so they work together instead of against each other. The biggest mistakes aren’t about saving too little — they’re about withdrawal order, tax timing, and OAS clawback exposure that many retirees don’t discover until it’s already costing them.
Key Takeaways
- Where you hold your savings — RRSP, TFSA, or non-registered — matters as much as how much you’ve saved.
- The 2026 OAS clawback threshold sits at $95,323 of net income, and it catches more retirees than most expect.
- Investing during retirement requires a different risk approach than investing while you’re still earning a paycheque.
- TFSA withdrawals don’t count as income for OAS clawback purposes, making them a useful tool late in retirement.
- A financial plan built before retirement is easier to execute than one assembled after the fact.
Saving Enough Was Never the Whole Job
Most people spend decades focused on one number: how much they need saved to retire comfortably. That’s an important question, but it’s only half the picture. The other half — how you draw down what you’ve built, in what order, and with what tax consequences — is where a lot of otherwise well-prepared retirees run into trouble.
This is where retirement financial planning becomes less about a single savings target and more about coordinating several moving pieces so they work together instead of against each other.
Here’s where those pieces tend to go wrong, and what to watch for instead.
Why Your Investment Strategy Needs to Change at Retirement
Investing before retirement and investing during retirement aren’t the same exercise, even though they can look similar on a statement. With a reliable paycheque and years to recover from a market downturn, pre-retirement investing generally leans into risk and prioritizes long-term growth. Once the paycheque stops, that math shifts. There’s less time to recover from losses, and inflation becomes a much bigger threat to a fixed pool of savings that now has to last decades.
A portfolio built for accumulation is not automatically the right portfolio for withdrawal. Traditional tools like a bond ladder used to offer retirees steady, low-risk income, but persistently low yields on fixed income have made that approach less reliable than it once was. Dividend-paying companies with a track record of growing their payouts, along with income-generating assets outside traditional stocks and bonds, have become part of how many retirees now try to keep pace with rising costs without taking on excessive risk.
The OAS Clawback Most Retirees Don’t See Coming
Here’s a number worth knowing if you’re within a decade of retirement: for the 2026 tax year, the Old Age Security recovery tax — commonly called the OAS clawback — kicks in once your net income exceeds $95,323. Once you cross that line, the government reduces your OAS payments by 15 cents for every dollar above the threshold, and the benefit is fully eliminated somewhere in the neighborhood of $155,000 of net income.
The tricky part is what counts toward that number. Employment income, CPP, RRIF withdrawals, taxable capital gains, and even grossed-up dividend income all factor in — which means a single large RRIF withdrawal or a property sale can push a retiree over the threshold without much warning. TFSA withdrawals, notably, do not count toward this calculation at all, which is part of why building TFSA savings before and during retirement has become such a common planning strategy.
A retiree who understands which income sources trigger clawback exposure can often restructure withdrawals to avoid losing OAS unnecessarily — but that planning generally needs to happen before the income is triggered, not after.
RRSP vs. TFSA: Why the Order Matters
Most Canadians end up holding some combination of RRSPs, TFSAs, and non-registered accounts by the time they retire, and the order in which you draw from each one has real tax consequences.
A few general principles tend to hold up:
- RRSPs suit those who earned more during their working years than they expect to need in retirement, since the tax deferral works best when your retirement tax bracket is lower than your working one
- TFSAs offer tax-free growth and withdrawals that don’t affect income-tested benefits like OAS, making them valuable both early and late in retirement
- Delaying RRSP or RRIF withdrawals — and CPP itself — until after 65 can help manage income thresholds in the years they matter most
- Pension income splitting with a spouse can lower each individual’s taxable income, which matters both for general tax efficiency and OAS clawback exposure
Most planners recommend using both RRSPs and TFSAs rather than picking one, since they serve different purposes: RRSPs for long-term tax deferral, TFSAs for flexibility and tax-free access when you need it.
Common Mistakes That Show Up Late
A few patterns show up repeatedly in retirement planning, and most of them are avoidable with earlier attention:
- Reacting emotionally to short-term volatility instead of sticking to a plan built for decades, not months
- Concentration risk from holding too much in a single asset class, sector, or region
- Treating income as separate from growth, when reinvested income can compound just as effectively as capital appreciation
- Assuming past performance predicts future results, which can blind retirees to genuinely new risks or opportunities
- Leaving a portfolio on autopilot when personal circumstances or market conditions have clearly changed
None of these are complicated concepts, but they’re easy to miss without someone actively watching for them across years, not just at tax time.
FAQs
How much money do I need to retire comfortably in Canada? There’s no universal number, but a common guideline is to target 60-80% of your pre-retirement income. Using a 4% withdrawal rule, a $1,000,000 portfolio might generate roughly $40,000 a year, on top of CPP and OAS.
What’s the best age to start retirement financial planning? Earlier is generally better, since compound growth rewards time more than contribution size. That said, meaningful planning can still make a significant difference even if you’re starting within a decade of retirement.
Does the OAS clawback apply per person or per household? It applies per individual, not per couple. Each spouse has their own $95,323 threshold for 2026, which is part of why income splitting between spouses can help reduce combined clawback exposure.
Should I manage my own retirement portfolio or work with an advisor? It depends on your comfort with tax rules, withdrawal sequencing, and ongoing rebalancing. Many retirees find that coordinating investments, tax planning, and estate considerations together produces better outcomes than managing each piece separately.
Meet the Advisor: Chris Jardine, CFP®, CIM
Chris Jardine is a Family Wealth Advisor with Beaches Financial Group, part of Bellwether Investment Management, based in North York, Ontario. Originally from a small town in southwest Scotland, Chris worked in his family’s funeral business before pursuing financial planning — an experience he credits with shaping his focus on the field. “I came across too many people with life regrets and difficulties in managing their affairs as they had not taken the time to plan ahead,” he’s said of that period.
Chris holds the Certified Financial Planner (CFP®) designation along with the Chartered Investment Manager (CIM) credential, and has spent the past decade specializing in retirement and tax planning. His work on straightforward, accessible retirement education earned him the title of Financial Literacy Champion at the Wealth Professional Awards 2026, recognizing his efforts to make retirement planning concepts more understandable for everyday Canadians.
Ready to Build a Plan That Actually Holds Up?
Retirement financial planning isn’t a single decision made the year before you stop working — it’s a set of coordinated choices about where your savings live, when you draw from them, and how to keep more of what you’ve built.
Book a meeting with Beaches Financial Group to talk through what a retirement income plan tailored to your specific situation could look like.
