Longevity & Aging

No doubt about it: at some point we’re neither semi-retired, findependent or fully retired. We’re out there in a retirement community or retirement home, and maybe for a few years near the end of this incarnation, some time to reflect on it all in a nursing home. Our Longevity & Aging category features our own unique blog posts, as well as blog feeds from Mark Venning’s ChangeRangers.com and other experts.

Consider all your Retirement Investment Management Options for a Financially Sound Future

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Here’s a look at some of your best retirement investment management options and choices. These include pensions, RRSPs, RRIFs and more.

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Your retirement investment management plan should build in contingencies for long-term medical needs and supplemental health insurance. As well, you should factor in caring for loved ones who are unable to take care of themselves.

When you work out a plan for your retirement, make sure that you aren’t basing your future income on overly-optimistic calculations that will end up leaving you short. Retirement income can come from many different sources, such as personal savings, Canada Pension Plan, Old Age Security, company pensions, RRSPs, RRIFs, and other types of investment accounts.

Learn how your retirement investment management works in a Canada Pension Plan (CPP)

The Canada Pension Plan, or CPP, is the name for the Canadian national social insurance program. The program pays out based on contributions, and it provides income protection for individuals or their survivors in the instance of retirement, disability or death. Since 1999, the CPP has been legally permitted to invest in the stock market.

Nearly all individuals working in Canada contribute to the CPP, unless they live in Quebec, where the Quebec Pension Plan (QPP) exists and provides comparable benefits.

Applicants can apply to receive full CPP benefits at age 65. The CPP can be received as early as age 60 at a reduced rate. It can also be received as late as age 70, at an increased rate.

Here’s a look at some of the pensions or benefits provided by the Canada Pension Plan:

  • Retirement pension
  • Post-retirement pension
  • Death benefit
  • Child rearing provision
  • Credit splitting for divorced or separated couples
  • Survivor benefits
  • Pension sharing
  • Disability benefits

Use a Registered Retirement Savings Plan (RRSP) as a starting place when you look into retirement investment management

An RRSP is a great way for investors to cut their tax bills and make more money from their retirement investing.

RRSPs were introduced by the federal government in 1957 to encourage Canadians to save for retirement. Before RRSPs, only individuals who belonged to employer-sponsored registered pension plans could deduct pension contributions from their taxable income.

RRSPs are a form of tax-deferred savings plan. They are a little like other investment accounts, except for their tax treatment. RRSP contributions are tax deductible, and the investments grow tax-free.

You might think of investment gains in an RRSP as a double profit. Instead of paying up to, say, 50% of your profit to the government in taxes and keeping 50% to work for you, you keep 100% of your profit working for you, until you take it out.

Convert an RRSP to a RRIF to create one of the best investments for retirement

A Registered Retirement Income Fund (RRIF) is another good long-term investing strategy for retirement.

Converting your RRSP to a RRIF is clearly one of the best of three alternatives at age 71. That’s because RRIFs offer more flexibility and tax savings than annuities or a lump-sum withdrawal (which in most cases is a poor retirement investing option, since you’ll be taxed on the entire amount in that year as ordinary income). Continue Reading…

How should you Plan for your Spending to Change throughout Retirement?

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Special to Financial Independence Hub

 

It’s challenging enough to figure out how much you’ll want to spend at the start of retirement.  Even more challenging is deciding how your spending will change as you age.  These choices make a big difference in how much money you’ll need to retire.  They also shape the spending options you’ll have available throughout retirement.  Here I explore the good and bad parts of common wisdom on retirement spending to arrive at my own spending plan for retirement.

Spoiler alert: the “go-go, slow-go, no-go” narrative is good marketing, but it has cracks.

Two extremes

Some people focus on the early part of their retirement.  They want as much money as possible available early on while they’re still young enough to enjoy it.  They seem to think of their older selves as a different person who they care less about than their current selves.

Others focus on their older selves and worry about running out of money at some point.  These people usually spend far less than their portfolios allow, and they tend to be resistant to spreadsheet evidence that they’d be fine spending more.  Some make frugality part of their value system, and others are genuinely fearful.

A rational retirement spending plan is somewhere between these two extremes.  But where?

The default

Before retirement spending research over the past decade or so, the default was to assume that retiree spending would rise with inflation each year.  In real (inflation-adjusted) terms, we assumed that retiree consumption would be flat over time.

This doesn’t mean that consumption would be flat in the transition from working to retirement, though.  Many expenses go away in the typical retirement.  Average retirees pay less income tax, have paid off their mortgages, spend less on children, and no longer have many work-related expenses like commuting and clothing.  On the other hand, retirees often spend more on hobbies.  Some retirees are exceptions, but retirement experts say typical retirees need 45-70% of their working income to have the same standard of living.  But after retirement starts, we used to assume flat consumption over the years.

It’s tempting to think that having retirees’ spending rising with inflation would have them matching the spending increases of their younger neighbours.  However, this isn’t true.  Human progress causes our consumption to rise faster than inflation over the long term.  Compared to a century ago, workers are far more efficient today, and they have a wide array of products and services available that people in the 1920s never dreamed of.  Progress will continue, and with each passing decade, more amazing products will become available.

If you want to fully participate in our progressing economy, you would need to plan for annual retirement spending increases of about inflation+1%.  It may be rational to decide you won’t need the latest iPhone or whatever amazing new product that will come along, but it’s important to realize that planning for flat consumption is already a compromise.  If you were keeping up with your neighbours at the start of retirement, you would be falling behind a decade or so later.

Go-go, slow-go, no-go

Amazon.com

The idea that we should plan to spend less each year through most of retirement has some of the best marketing around.  In his book, The Prosperous Retirement, Michael Stein referred to three general phases of retirement:

  • Go-go years: From 60-65 to 70-75.  High activity and spending.
  • Slow-go years: From 70-75 to 80-85.  Activity and spending decline.
  • No-go years: From 80-85 on.  Minimal activity with healthcare and long-term care costs.

This framework is easy to embrace for anyone who is still a long way from the slow-go age.  We’ve all seen old-timers who seem unable to do much, and more importantly, they seem very different from us.  However, if you ask someone in their early 70s if they’re into their slow-go years, don’t expect a polite response.

Already, most descriptions of the three phases have the go-go years ending at 75 instead of 70-75.  With so many baby boomers now in their 70s, it’s not surprising that they don’t like to see themselves as slow-go.

Setting these self-image issues aside, are these older boomers spending less than they did in their 60s?  If they are spending less, some will be doing so by choice and some by necessity because they have limited savings.  How significant is this group who overspent early?  Do you really want to model your own retirement in part on this overspending group?

In the end this vivid narrative paints a compelling picture of someone (but not you!) slowing down and eventually stopping altogether, but it doesn’t prove anything about how you should plan your retirement.

The research

One of the early papers researching retirement spending patterns is David Blanchett’s 2014 paper Exploring the Retirement Consumption Puzzle.  This paper along with many subsequent papers have established without a doubt that the average retiree’s inflation-adjusted spending declines in early retirement and increases late in retirement as health care and long-term care costs rise.

That seems to settle it, right?  We should follow the research and plan for declining consumption through early retirement, and possibly plan for health spending and long-term care costs late in retirement.  But there’s a disconnect.  We know what average retirees do, but is this what they should have done?

The average Canadian smokes about two cigarettes per day.  Does this mean we should all plan to smoke two cigarettes each day?  Of course not.  This average is brought up by the minority of Canadians who smoke.  If we take the smokers, whose behaviour we don’t want to emulate, out of the data, the average drops to zero.  In reality, the best plan is to not smoke at all.

Carrying this thinking over to retirement spending, we need to know how many retirees overspent early in retirement and now regret it.  You don’t want to emulate these people.  If we could remove these people from the data, the average spending from the remaining retirees might give a better picture of what you should do.  In addition, we might want to remove retirees from the data if they badly underspent.

The retirement spending smile

The Blanchett paper refers to a “retirement spending smile” that is widely misunderstood.  If we draw a chart of average retiree spending over time, it starts high, falls for a decade or two, and then rises again at the end of life.  People refer to this chart shape as a smile.  However, in Blanchett’s 2014 paper, the smile actually referred to a chart of changes in retiree spending.

So, Blanchett observed that retiree spending changes little in early retirement, then starts to decline and this decline grows in mid-retirement, then the decline slows or even reverses to spending increases late in life.

Here is a chart of Blanchett’s annual spending change data:

Notice that the points don’t really look much like a smile.  The measure of how well a curve fits some data is called R-squared.  Blanchett reports that his spending smile curve has about a 33% R-squared match with the data.  This is a rather weak match, and is a sign that he didn’t have enough data.  Another sign of too little data is the big changes over a short time.  There is no obvious reason why the spending drop should be so much more at 80 than it was at 78.

What is important but unclear is how much of this data comes from overspenders and underspenders who you don’t want to emulate.  Blanchett considers the question of whether retirees spend less “by choice or by need,” and admits that “it is impossible to entirely disentangle this effect.”  To explore this question he divides the retiree spending data into four groups based on whether their spending is high or low and whether their net worth is high or low.  He then studied each group separately. Continue Reading…

How do you intend to retire?

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By Mark Seed, myownadvisor

Special to Financial Independence Hub

Unless you go back in time, retirement no longer means stopping all forms of work from the factory job: Retirement means different things to different people.

While there remains a formal definition of retirement (in that there is the action of leaving one’s job or ceasing to work) retirement has many flavours these days. The traditional definition has evolved and no longer fits what people are doing and seeking.

As I approach retirement from my own career at the end of March 2026, I wondered how you intend to retire.

How do you intend to retire?

The rise of standardized work during the 20th century coupled with an abundance of industrialized or corporate jobs gave rise to pension plans as a key employee attraction and retention benefit. So, you worked hard for 30-35 years and then you retired with your pension as part of the long-term total compensation model: a model that remains in place to today.

Defined benefit (DB) pensions give retirees fixed lifelong monthly payments based on salary and a years of service formula. Some DB plans even offer a degree of indexing to fight inflation. But all DB plans represent a premium form of dependable retirement income that is not subject to financial market drama: since the financial risk is on the employer and not on the employee or retiree.

But times are a changing …

The long retreat of DB employee benefits has been well documented, shifts have occurred in the employer-employee dynamic involving unions along with shifts in the job market to industries where a DB pension is simply just not offered.

Canada’s retirement income system is often described as having three pillars, although variations exist.

The first pillar provides benefits based on age and years of residence in Canada: so it includes the Old Age Security (OAS) pension, the Guaranteed Income Supplement ((GIS), if that applies to you for lower-income folks), the Allowance and the Age Credit. This first pillar is funded largely through general tax revenues.

The second pillar consists of mandatory earnings‑related programs so you can put the Canada Pension Plan (CPP) and, in Quebec, the Quebec Pension Plan (QPP) in that bucket. These are public pensions, funded by mandatory contributions from workers and employers, as well as income from investments made with these contributions.

And finally the third pillar is composed of the aforementioned workplace pension or as the workplace employee compensation model continues to shift, it could be a Group RRSP or another form of employee compensation as well. “Private” retirement income planning may also include your own assets: RRSPs, TFSAs, LIRAs and any non-registered investments.

Weekend Reading - Your retirement income sources

Source: Government of Canada.

I share this information for context when it comes to the following types of retirement you might pursue: how you intend to retire. Your path to retirement could be one or more of these types below.

1. Traditional Retirement

I define this as follows: you work for decades on end uninterrupted and you stop working for good. During this period of time, you might have contributed to a DB or Defined Contribution (DC) pension plan or not at all.

If you had a pension, the automatic savings nature of any workplace pension would be very good for most people — this “forced savings approach” is a huge benefit unto itself – pay yourself first as per The Wealthy Barber.

If you had a pension (the golden handcuffs idea) and depending on the type of pension you have, pension income gets paid out in different ways at retirement. Some plans cannot start before a certain age while others can be accessed earlier. Depending on your retirement-income goals this flexibility (or lack of flexibility) is an important consideration in your financial plan: one I’ve struggled with myself.

There are many benefits to traditional retirement by remaining with one key employer for decades on end (i.e., work stability; the guaranteed pension income for life; don’t have to take too much personal investment risk; could be other workplace retirement benefits like health benefits, travel benefits or life insurance benefits) but traditional retirement also seems to come at a personal cost of trading your life energy for employer time for many decades.

The traditional path to retirement may not work for many people these days. It did not work for me.

2. Semi-Retirement

I define this as follows: you want to pursue some form of life-work balance.

This was in fact something important for my wife and I to try out in 2024 and 2025:  so we did.

My wife toggled back and forth between full-time and part-time work up until her retirement in October 2025.

I continue to enjoy my part-time role at work (until the end of March 2026): I wanted to remain with my employer for a bit, still contribute, just in a reduced capacity.

After I retire from my current career, I might still work (gasp!) but only a few days per week or a few days per month. We shall see.

I will continue to blog here for another year or so too and this site doesn’t make minimum wage: I enjoy running it.

Semi-retirement is not about income but it may include some small financial compensation for doing something you really enjoy/want to pursue: trading your time or energy for some income.

This path and related definition of retirement has always appealed to me and much more so than just early retirement and not working again.

3. Early Retirement

Some bloggers or FinFluencers might express this is a “better way” to retire but when you really think about it: nobody in their 30s or 40s really retires early and never works again. I haven’t met one of them yet.

They continue to work for some income and many do so on their passion projects. Nothing wrong with that of course, being an entrepreneur, you just need to be honest with folks vs. selling some dream as you hustle a book or a podcast or something else to support your lifestyle.

In Your Money or Your Life, author Vicki Robin equates ample savings (and investments) with freedom. This means you have the freedom “to leave your job if the boss is intolerable or the benefits have just been yanked.”  With sufficient savings (and investments) you have the opportunity to transform your life, including achieving Financial Independence if you want to.

Robin likens financially independent thinking to cartography: you need to create your own map. Your map will depict the delta between your life today and the one you want to lead. The results of financially independent thinking will allow you to step back from your assumptions and emotions about money and observe them objectively.

The concepts related to early retirement are not new but certainly lots of modern social media marketing have propelled this thinking into a new discussions and forums.

I’m a big fan of financial independence, just not any Retire-early part of FIRE marketing.

4. Mini-Retirements

Popularized by Tim Ferriss’ 2007 bestseller, The 4-Hour Workweek, Ferriss proposes you redistribute your retirement over many decades. Other books and articles have suggested the same over the years.

In this form of retirement you work in bursts or stints. For example, you might work for a few years and then take a few years off work only to work yet again.

When it comes to mini-retirements, I’ve considered this approach but quickly dismissed it since I was always more focused on my crossover point and becoming financially independent vs. needing to work to fund periodic time off only to work again …

Crossover Point

We realized our crossover point in 2024.

In doing so, that allowed us to start shifting both of our workplace schedules to part-time as part of a transition to retirement sooner than most.

How do you intend to retire?

The answer to this question is very personal and quite subjective.

Which type of retirement is right for you?

“It depends” is the common personal finance answer to pretty much everything but it’s so true.

Traditional retirement never appealed to me nor did any sort of mini-retirement either. So, I guess I’ve opted for the semi-retirement path and if you want to suggest that I’m an early retiree well that’s probably somewhat correct too.

Your financial planning and retirement income planning will depend on many personal factors but the ingredients to any retirement or some form of financial independence are pretty generic:

  1. Spend less than you make and invest the difference: This obvious expert advice really never goes out of style. A high, consistent savings rate is a get wealthy eventually path to retirement.
  2. Kill all high-interest debt and remove all debt from you life when you can: Debt management comes in the form of removing ongoing credit card debt, killing off high interest loans, and managing any other consumer debt well. If you are always paying other people first it will be hard to get ahead in life.
  3. Educate yourself / gain financial literacy over time: Another obvious truth but it’s critical to educate yourself so you develop a better understanding of not only how to manage your finances but also the motivations of others around you. Otherwise, you will pay other people lots of money to do your financial thinking for you.

Whether you are in the early days of your financial journey, preparing for retirement, or successfully in retirement, I would be happy to learn what is working for you. How do you intend to retire? How did you retire?

Leave a comment below. I look forward to your engagement.

Yours in happy planning and celebrations for what lies ahead in 2026.

Happy New Year!

Mark

Weekend Reading - Expenses that may disappear edition

Source: Carl Richards, Behavior Gap.

Mark Seed is a passionate DIY investor who lives in Ottawa.  He invests in Canadian and U.S. dividend paying stocks and low-cost Exchange Traded Funds on his quest to own a $1 million portfolio for an early retirement. You can follow Mark’s insights and perspectives on investing, and much more, by visiting My Own Advisor. This blog originally appeared on his site on Dec. 31, 2025 and is republished on Findependence Hub with his permission.

What if you run out of life? Save-Spend balance

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Mrs. T and I went on an Alaska cruise years ago, before kids and had a great time.

By Bob Lai, Tawcan

Special to Financial Independence Hub

Let’s be honest here, inflation is real. Very real! Despite being as frugal and careful with our expenses as possible, we are seeing an increase in our living expenses; arguably, just like everyone else.

Unfortunately, many of these expenses are completely outside of our control …

  • We were just informed by the city that our property tax increased by 11.5% this year
  • Our monthly equalized Fortis-BC payment increased by 20% due to natural gas rate adjustments
  • Gas prices recently hit over $2 per litre
  • Groceries cost way more now. I mean, a bag of Hardbite chips is over $5, and avocado costs $2 at regular price? What is this, highway robbery?

Let’s not forget the rising interest rates, leading to higher mortgage payments.

And those are just core expenses. Now if we consider discretionary expenses as well …

  • It’s not unusual to see hotels at over $250 per night, or even over $300 and even $400! In fact, recently a lawyer complained about the hotel prices in Vancouver. And is not alone!
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  • Staying at an Airbnb is just as costly and sometimes it costs even more than staying at a regular hoteltweet 2
  • Airfares are far more expensive than pre-COVID. Good luck finding tickets to Europe for under $1,000 per person.
  • Dining out is more expensive. A bowl of ramen costs close to $20 with taxes and tips added. We spent over $120 for the four of us dining out at a local White Spot last month, and we only had burgers, a couple of milkshakes, and a dessert to share.

You get the picture. At this point, I wouldn’t be surprised that our 2023 annual expenses will be considerably higher than the previous years.

Feeling frustrated with our expenses

The other day I was looking at our budget/expense tracking spreadsheet. To my horror, I noticed that we have been overspending in our Play account by a significant margin. To be more specific, we have dined out far more so far in 2023 than in other years. We have had three months where we spent over $1,000 on dining out! (On average, we usually spend around $350 on dining out per month)

While I know we’ve spent big money on a few occasions, like Kid T2.0’s birthday dinner with 15 people, a big dim sum lunch with 9 people, dinners a few times in Whistler with Mrs. T’s family, Mrs. T’s birthday lunch with 11 people, and celebrating our wedding anniversary, I was surprised to see that we spent over $1,000 on dining out for May.

Sure, we ate out multiple times during our recent 4-day trip in Calgary, but that was around $500 in total. I couldn’t explain how we spent the other $500.

I was frustrated and bummed out about spending so much money dining out yet again. For the life of me, I couldn’t figure out how we spent the other $500. I did recall having takeout sushi for about $120 but I couldn’t think of other dining-out occasions.

After going through the credit-card statements and spreadsheet, I realized we have had many smaller dining out expenses. $20 here and there, $30 here and there, and the amount quickly added up.

During this frustrated & annoyed state, the only thing I could think of was that we needed to take some extreme action.

“No dining out or take-outs for June!” I declared to Mrs. T.

“And what do you plan to spend our money on?” Mrs. T asked.

I couldn’t answer her question at all. All I could think of is that we need to reduce our spending, so we can save more. I think deep inside I was worried that we’d run out of money because of the increase in our overall expenses.

Even with me writing about having a save-spend balance (i.e. spending money to enjoy the present moment and saving money for the future), all I could think of are…

Save! Save! SAVE!

Unfortunately, my save, save, save, and save some more mentality was creeping in very quickly.

What the heck is going on here? Continue Reading…

Contradictory Retirement Plans

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By Michael J. Wiener

Special to Financial Independence Hub

I get a lot of friends and family asking for help figuring out their retirement finances when they’re just a few years from retiring.  These discussions follow a common pattern: people say they want to spend more in their 60s while they’re still able to enjoy new experiences, but they make plans that involve spending less in their 60s than they will have available in their 70s and beyond.  They resist a simple idea even after I show them how much more they could be spending early on.

I’ll illustrate what’s going on with an example that borrows from some of the real cases I’ve helped with.

Meet Dan

Dan is a single guy about to retire at 60.  Here are his relevant financial details:

TFSA: $200,000
RRSP: $300,000
Pension: $4000/month indexed to inflation + $800/month bridge until he is 65
CPP: entitled to 90% of the maximum amount ($826 at 60, $1290 at 65, $1832 at 70)
OAS: entitled to the full amount ($740 at 65, $1006 at 70, 10% increase at 75)

Dan tried to work out what to do on his own initially.  His thinking was mostly short term.  To compensate for his drop in income when he retires, he would take his CPP right away, and take his OAS at 65.  He wants some money to do some traveling over the next decade, and his work pension isn’t enough.

Here’s a chart of Dan’s inflation-adjusted income based on these plans.  Note that in nominal terms, his income will go up with inflation each year, but we show it in constant 2025 dollars.

The first thing to notice is that Dan hasn’t included his RRSP or TFSA in these plans.  He didn’t really think about them; he just assumes that they are for “later.”  By default, Dan will have to convert his RRSP to a RRIF when he’s 71, and will have to start drawing from the RRIF when he’s 72.  Let’s add in Dan’s RRIF income, assuming conservatively that his RRSP/RRIF will earn 2% above inflation.

We see now that contrary to Dan’s stated goal of having more income for traveling in his 60s, he’s actually planning to live small in his 60s.  This is the point where I suggest starting to draw from his RRSP/RRIF right from the start of retirement.

Immediately, we run into a problem.  Dan doesn’t think of himself as the sort of person who spends his RRSP.  That’s for old people.  He doesn’t feel very old.  He doesn’t like this idea.  He’s still the kind of person who saves money.

Not everyone can get past this point.  Some live small for years to give themselves a large income in their 70s and beyond.  Let’s hope that Dan can get used to the idea of starting to live now.  Here’s a plan that smooths out Dan’s RRSP/RRIF income: Continue Reading…