15 Essential Steps in Your Canadian Retirement Checklist (2025 Update)

"Will I have enough to retire? How will I know when I'm ready?"

If you've asked yourself these questions, you're not alone. Most Canadians approaching retirement share these concerns. The good news? A solid retirement plan can address these worries and set you up for the retirement you've been dreaming about.

At Surcon Mahoney Wealth Management, we've helped countless clients navigate the path to a comfortable, early retirement. We've put together this essential checklist to help you prepare for this major life transition.

1. Figure Out How Much Money You'll Actually Need

Let's be honest—nobody wants to run out of money in retirement. But how do you know how much is enough?

Start by looking at what you spend now. Then think about how that might change after you stop working. Maybe you'll travel more, or maybe you'll spend less on commuting and work clothes.

Most financial experts suggest you'll need about 70-80% of your pre-retirement income to maintain your lifestyle. But your number could be different depending on your plans.

The Canadian government offers a handy tool called the Canadian Retirement Income Calculator that can help you estimate your needs more precisely. Take some time to play around with it—it's worth the effort.

2. Get the Full Picture on Your Government Benefits

The government updated CPP and OAS benefits in 2025, and you'll want to know exactly what's coming your way.

CPP payments increased by 2.6% this year to help retirees deal with rising costs. Even better, the CPP Enhancement Program that started back in 2019 is now fully implemented. This means CPP will replace up to 33.33% of your pre-retirement earnings instead of just 25%.

For OAS, you need to have lived in Canada for at least 10 years after turning 18 to qualify. If you've been here for 40+ years, you might automatically start getting OAS when you turn 65.

Planning to spend winters down south? Keep in mind that if you're outside Canada for more than six months, the government might withhold up to 25% of your pension payments in taxes.

3. Make the Most of Your RRSP

For 2025, you can contribute up to 18% of last year's earned income to your RRSP, with a maximum of $32,490. 

Remember that you can keep contributing until December 31 of the year you turn 71. After that, you'll need to convert your RRSP to a RRIF or buy an annuity, or else face a hefty tax bill on the full amount.

If you have a large RRSP balance, talk to a financial advisor about the best RRSP withdrawal strategy. Taking out too much at once could push you into a higher tax bracket, costing you thousands.

4. Don't Overlook Your TFSA

TFSAs are retirement planning powerhouses that don't get enough attention. In 2025, you can contribute up to $7,000, and if you've been eligible since TFSAs started in 2009 but haven't contributed, you've got $102,000 of contribution room waiting for you.

Unlike RRSPs, you don't get a tax deduction for TFSA contributions. But here's the upside—you won't pay any tax when you take money out. This makes TFSAs especially valuable if you're earning less than $50,000 a year.

Here's a pro tip: Consider continuing to maximize your TFSA contributions even during retirement. TFSAs can be left to beneficiaries tax-free, making them excellent tools for estate planning.

5. Create a Smart Withdrawal Strategy

One of the biggest retirement planning mistakes we see is not having a tax-efficient withdrawal strategy. The order in which you tap your different accounts can dramatically impact how much you keep versus how much goes to the CRA.

You should start with non-registered accounts, then move to tax-deferred accounts like RRSPs and RRIFs, and save tax-free TFSAs for last. But your situation might call for a different approach.

If you're married or have a common-law partner, look into income splitting to reduce your overall tax bill. Higher-income spouses can contribute to a spousal RRSP and claim the tax deduction, while withdrawals get taxed at the lower-income spouse's rate.

Also, watch out for the OAS clawback threshold, which is $90,997 for 2025. If you earn more than this, you'll have to repay some or all of your OAS benefits.

6. Decide When to Start Taking CPP and OAS

You can start collecting CPP as early as age 60, but your payments will be reduced by 0.6% for each month you take it before 65. That's a reduction of up to 36% if you start at 60.

On the flip side, if you wait until 70, your payments will increase by 0.7% for each month after 65, for a maximum increase of 42%. That's a huge difference!

Similarly, you can defer OAS to receive higher payments later—up to 36% more if you start at 70 instead of 65.

Your health, financial situation, and life expectancy all play into this decision. There's no one-size-fits-all answer, which is why personalized retirement planning is so valuable.

7. Look for Additional Income Sources

While government benefits help, they probably won't cover all your retirement needs. That's why it's smart to develop other income streams.

Many of our clients find that investing in reliable dividend stocks provides a steady stream of income to supplement their government benefits. Other options include part-time work, rental income, annuities, or guaranteed investment certificates (GICs).

Having multiple income sources gives you more financial stability and flexibility in retirement.

8. Plan for Healthcare Costs

Healthcare expenses are one of the biggest surprises for many retirees. Experts estimate that at age 65, the average Canadian spends about $5,400 annually on healthcare, and this amount increases with inflation.

While provincial health plans cover doctor visits and hospital stays, they typically don't cover:

• Prescription drugs
• Dental care
• Vision care
• Long-term care
• Home care services

Consider getting private health insurance to cover these gaps. You might be able to convert your workplace coverage, join a retiree group plan, or purchase personal health insurance.

9. Think About Long-Term Care

Nobody likes to think about needing help with daily activities, but it's a reality for many seniors. Long-term care insurance can help cover costs if you need assistance at home, in a retirement residence, or in a care facility.

Most experts recommend looking into long-term care insurance between your mid-50s and early 60s. Buying it younger typically means lower premiums.

To qualify for benefits, you'll usually need a doctor to certify that you can't perform at least two daily activities (like bathing, dressing, or eating) without substantial help.

10. Update Your Estate Plan

Having an up-to-date will is crucial for ensuring your wishes are honored after you're gone. If you already have one, review it regularly—especially after major life events like marriage, divorce, or the birth of children or grandchildren.

Consider setting up a power of attorney as well. This gives someone you trust the authority to make financial decisions if you become unable to do so yourself.

Working with an estate planning professional can help minimize taxes and ensure your assets go where you want them to.

11. Review Your Insurance Coverage

Your insurance needs change as you age. The life insurance that protected your young family might not make sense anymore if your children are financially independent.

On the other hand, you might want more coverage for healthcare or long-term care. Review all your policies—life, home, auto, and travel—to make sure they align with your current situation.

12. Protect Yourself from Financial Fraud

Unfortunately, seniors are frequently targeted by scammers. Fraud is actually the most common crime against older Canadians.

Educate yourself about common scams, such as:

• Investment scams promising unrealistic returns
• Identity theft
• Romance scams
• "Grandparent" scams where someone pretends to be a relative in trouble

Consider setting up a trusted contact person with your financial institutions who can be alerted if there are concerns about your financial decisions.

13. Test-Drive Your Retirement Lifestyle

Before you fully commit to a retirement lifestyle, try it out temporarily. If you're planning to move to a smaller community or spend time abroad, stay there for an extended period first.

Take a few weeks to experience your planned retirement activities. You might discover that the hobby you thought would fill your days isn't as enjoyable as you expected, or that you need more social interaction than you anticipated.

This test run can help you make adjustments before making permanent changes.

14. Understand How Working in Retirement Affects Your Benefits

Many Canadians continue working part-time after "retirement," either for extra income or simply because they enjoy it. But working can affect your benefits.

If your income exceeds the OAS clawback threshold ($90,997 in 2025), you'll have to repay some or all of your OAS. Working can also impact other income-tested benefits.

That said, working part-time can provide not just additional income but also social connection and purpose during retirement.

15. Plan for Inflation and a Long Life

Inflation is like a slow leak in your retirement savings. At a 2.5% annual inflation rate, what costs $50,000 today will cost almost $82,000 in 20 years.

While CPP and OAS are indexed to inflation, not all employer pensions have this protection. Check with your pension administrator to find out if yours is indexed.

Also, remember that retirement could last 30 years or more with today's life expectancies. Make sure your financial plan accounts for this possibility.

Ready to Create Your Personalized Retirement Plan?

This checklist covers the essentials, but everyone's retirement journey is unique. At Surcon Mahoney Wealth Management, we specialize in creating personalized retirement plans that address your specific needs and goals.

Our team can help you navigate complex retirement decisions, optimize your tax strategy, and create a plan that gives you confidence about your financial future.

Ready to take the next step? Contact us today to schedule a consultation. Let us help you answer that question, "Will I have enough to retire?" with a confident "Yes!"