Lifespans are Increasing, But So Is the Cost of Living
Data from Statistics Canada found that in 2022 Canada was home to nearly 13,500 centenarians, a 43% increase from 2018. A longer life expectancy, while it’s something that many celebrate, also means you’ll have to make the money stretch into your later years.
Taking your CPP before age 65 means you’re receiving less money that will need to last for a longer period of time. Inflation also means that the money you’re receiving will be worth less than when you first started receiving it (although the government does increase CPP payments a little each year). Leaving yourself short in retirement can mean a very tight budget that doesn’t meet your needs. Then the temptation to go into debt to cover medical and lifestyle expenses increases. If you own your home, you may consider a reverse mortgage or utilize a Home Equity Line of Credit (HELOC) beyond your ability to keep up with the payments.
You might be interested in a free webinar to help you digest all of this information. Living Well on Retirement Income is a fun and interactive session that will teach you how to increase income, reduce expenses, and live without having to rely on credit in your retirement years.
Dawn of Your Golden Years, 5 Steps to Take as You Prepare for Retirement
What Are Your Sources of Income When you Retire?
Before deciding whether to take your CPP benefits early or to defer them by up to 5 years, make sure you know what all of your sources of income will be once you retire. This is a crucial first step as it will help you build a sustainable retirement budget. Your retirement income will usually come from one or more of the following:
- CPP/QPP retirement pension
- Old Age Security (OAS) and if you have low income in retirement, the Guaranteed Income Supplement (GIS)
- Earnings, if you continue to work in retirement
- Employment-related pension plans
- Registered Retirement Savings Plans (RRSPs)
- Tax-Free Savings Accounts (TFSAs) and other investments
Canadian Retirement Income Calculator
Debt payments can eat up a significant portion of your retirement income. If you’re wondering how to retire debt-free, check out 10 Steps to Retire Without Debt. This webinar focuses on learning more about government pensions available to you, and the steps you can take to increase your income and decrease your debts ahead of retirement.
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