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Planning Your Retirement: Tips for a Fixed Income

Updated: Apr 16

At DO Wealth, we understand the importance of financial planning, especially for Canadians approaching or already in retirement. Living on a fixed income requires careful budgeting and strategizing to ensure your nest egg lasts throughout your golden years! Our team has compiled some key resources to some frequently asked questions to help you gain a better understanding of fixed income in Canada.

Understanding Your Income

  • Government Benefits:

  • Old Age Security (OAS): The maximum monthly OAS benefit for Canadians in April - June 2024 ranges from $713.34 to $784.67 depending on age and net income level. You can find more information and eligibility requirements on the Government of Canada website: Old Age Security Pension (OAS).

  • Guaranteed Income Supplement (GIS): This benefit supplements OAS for low-income Canadians. The exact amount depends on your marital status and total income, but the maximum combined monthly benefit for a single senior from April - June 2024 is 1,065.47. But you can find the most up-to-date figure on the official website: Guaranteed Income Supplement (GIS).

  • Employer Pensions: Many Canadians have employer pensions that can be a significant source of income in retirement. Understanding your plan's payout options – lump sum, monthly payments, or a combination – is crucial when planning your retirement finances. Experienced financial advisors can help you navigate these choices and determine the option that maximizes your income and aligns with your long-term goals.

  • Personal Savings & Investments: Your savings and investments, potentially your most significant retirement income source, require careful assessment and management. This includes reviewing accounts like RRSPs and TFSAs.  Developing a withdrawal strategy is crucial.  This plan should balance your current needs with long-term financial security.  Remember, unforeseen factors like inflation and potential healthcare costs can erode your savings over time.

Budgeting and Expense Management

  • Track Your Spending: Monitor your expenses for a few months to understand where your money goes. Free online budgeting tools can help. According to a recent study, the average retired Canadian spends around $2,400 per month on household expenses, with the majority going to housing.

  • Prioritize Needs Over Wants: Distinguish between essential expenses (housing, utilities, food) and discretionary spending (entertainment, dining out). Focus on allocating funds effectively to cover necessities first.

  • Renegotiate Bills: Review your phone, internet, and cable bills—contact providers to see if you can secure a better rate. Loyalty doesn't always pay off, be prepared to switch providers if necessary.

  • Shop Around for Savings: Compare grocery stores, insurance providers, and other services to find the best deals. Consider generic drugs when appropriate. Explore discount programs for seniors offered by some retailers and organizations.

Maximizing Your Income

  • Defer OAS: You can delay receiving OAS payments until age 70 for a higher monthly payout later, with the benefit increasing by 0.7% for every month you delay receiving it.

  • Strategic Investment Withdrawals: Work with a financial advisor to develop a strategy for withdrawing from your savings and investments that minimizes taxes and ensures long-term sustainability. Consider a diversified portfolio with a mix of asset classes to manage risk.

  • Government Grants: Depending on your province and property value, you may qualify for property tax relief through programs like Saskatchewan’s Home Repair Program - Adaptation for Independence. Where eligible homeowners and landlords can access forgivable loans up to $23,000 to modify their property for someone with a housing-related disability.

Living a Fulfilling Life on a Fixed Income in Canada

Living on a fixed income doesn't mean sacrificing a fulfilling lifestyle. Here are some ways to make the most of your golden years in Canada:

  • Free and Low-Cost Activities: Communities boast numerous free and low-cost activities for seniors. Our favourites include local parks, museums on free admission days, or community events and gatherings. 

  • Travel Smart: Travel doesn't have to break the bank. Explore off-season travel deals, consider group tours for reduced costs, or plan road trips to discover closer-to-home destinations. Look for senior discounts common on travel and accommodation.

  • Lifelong Learning: Never stop learning! Universities like U of S offer low cost education opportunities for seniors, like the Saskatoon Seniors Continued Learning Inc. (SSCL). Moreover, public libraries offer a wealth of resources, from books and audiobooks to online courses and workshops. Consider learning a new skill, brushing up on an old hobby, or taking a class to stimulate your mind.

DO Wealth Can Help:

At DO Wealth, we understand the unique challenges and opportunities of living on a fixed income in Canada. Our experienced financial advisors can help you create a personalized plan that:

  • Maximizes your government benefits and pension income.

  • Develops a tax-efficient investment withdrawal strategy.

  • Manages your assets to ensure your financial security throughout retirement.

  • Identifies cost-saving opportunities and helps you stretch your budget further.

Contact us today for a free consultation and let's discuss how we can help you design a fulfilling and secure retirement.



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