When people think about retirement, they often focus on a number. "How much do I need to retire?"
It's an important question, but it may not be the most important one. A better question might be:
"How will I create a paycheque once I stop working?"
For most of our lives, our income arrives automatically. Every month or every two weeks, a paycheque shows up in our bank account.
Retirement changes that.
Suddenly, you become responsible for creating your own income.
That's why successful retirement planning isn't just about the size of your portfolio. It's about building a strategy that can provide reliable income throughout your retirement years.
Your retirement paycheque may come from several sources:
- Canada Pension Plan (CPP)
- Old Age Security (OAS)
- Workplace pensions
- RRSPs and RRIFs
- TFSAs
- Non-registered investments
- Rental income
- Part-time work
The challenge is determining when to draw from each source and how to do so in a tax-efficient manner.
For example, withdrawing too much from registered accounts early could increase your tax bill. Waiting too long could create larger mandatory withdrawals later in life. Drawing income from the wrong accounts at the wrong time may also impact government benefits or leave less flexibility for future needs.
This is where planning becomes valuable.
A retirement income strategy can help answer questions such as:
- How much can I safely spend?
- Which accounts should I draw from first?
- When should I start CPP and OAS?
- How can I minimize taxes over my lifetime?
- How can I help ensure my money lasts?
The goal isn't simply to retire with a certain amount of money.
The goal is to create an income stream that supports the lifestyle you want while providing confidence that your financial future remains secure.
Retirement isn't a number.
It's a paycheque.
Source: https://www.canada.ca/en/services/life-events/retirement/sources-income
