Retirement in Canada can be very good if you set it up right. We have a public pension system that pays for life, two excellent tax-sheltered savings accounts in the RRSP and the TFSA, and growing public coverage for prescriptions and dental care. None of it works on autopilot, though. The income you actually take home depends on a handful of choices most Canadians only get one shot at. Below are five strategies retirees and pre-retirees can use to keep more of their own money.
1. Think Carefully About When to Start CPP and OAS
When to turn on your government pensions is probably the most consequential financial decision you’ll make in retirement. You can start the Canada Pension Plan as early as age 60 or wait until 70. The longer you wait, the bigger each monthly cheque gets, and the increase lasts for life. You need to find a balance of what to withdraw now vs later by working with firms like Aleph Retirement Planners
According to the Government of Canada, taking CPP at 60 instead of 65 cuts your payments by 36%. Waiting until 70 boosts them by 42%. Old Age Security works the same way, with a 36% lift if you defer from 65 to 70. The maximum CPP for someone starting at 65 in 2026 is $1,507.65 per month, but the average new retiree only gets about $925. Hitting the maximum usually requires close to 40 years of contributions at or above the yearly earnings ceiling.
The right choice depends on your health, your other savings, and whether you’re still working. A federal employee with a defined-benefit pension may want to let CPP grow until 70. Someone with health concerns or limited savings may need the income sooner. The official Canadian Retirement Income Calculator lets you run your own numbers.
2. Plan the Order You Withdraw From Your Accounts
In Canada, which account you pull money from matters almost as much as how much you pull. The three main buckets work very differently:
- RRSP and RRIF withdrawals are fully taxable, just like a paycheque.
- TFSA withdrawals are completely tax-free and do not count as income.
- Non-registered (regular) investments are taxed only on the growth, often at lower rates if the gains come from Canadian dividends or capital gains.
This matters because once your net income climbs above roughly $95,000 in 2026, the Canada Revenue Agency starts clawing back your OAS. RRSP and RRIF withdrawals push your income up. TFSA withdrawals don’t. A common approach is to draw lightly from your RRSP in the early retirement years before mandatory RRIF withdrawals begin at age 72, lean on TFSA money in higher-income years to stay below the clawback threshold, and keep your highest-growth investments inside the TFSA where future returns will never be taxed.
The CRA’s official rules for RRSPs and RRIFs are here.
3. Use Pension Income Splitting With Your Spouse
If you’re married or common-law and one of you has a much bigger pension or RRIF than the other, the CRA lets you split up to 50% of eligible pension income on your tax returns. This can shave thousands off your combined tax bill every year and helps both spouses qualify for the $2,000 federal pension income credit. It’s an easy win that a lot of couples miss.
4. Use the Public Programs You’re Already Paying For
Most provinces offer cost-relief programs for seniors that go well beyond CPP and OAS. A few worth knowing:
- Provincial drug plans. Every province has some form of public drug coverage that significantly reduces out-of-pocket prescription costs for seniors. Ontario’s Drug Benefit kicks in at 65, British Columbia’s Fair PharmaCare ramps up coverage based on income, and Quebec’s RAMQ public drug insurance covers anyone without a private plan. The new federal pharmacare framework is also expanding coverage for diabetes and contraception medications.
- Property tax deferral. British Columbia, Alberta, and a number of Ontario municipalities let lower-income or senior homeowners defer property taxes until the home is sold. This can free up several thousand dollars of cash flow each year.
- Guaranteed Income Supplement. If your retirement income is modest, you may qualify for the GIS on top of OAS. Enrolment is not automatic for everyone, so it’s worth checking with Service Canada to see if you qualify.
5. Stress-Test Your Plan Against Inflation and Longevity
Outliving your savings is a bigger threat to most retirees than any market crash. A 65-year-old Canadian today has a real chance of living past 90. A plan that works at 3% inflation may not work at 5%. Most planners recommend running your numbers through several scenarios: a bad market in the first five years of retirement, a major health event in your 80s, and the loss of a spouse, which usually cuts CPP and OAS income while leaving most fixed costs in place.
This kind of stress-testing is hard to do on a spreadsheet alone. Working with an advisor who understands Canadian tax rules and retirement income can turn anxiety into a clear plan. The team at builds these projections for clients across the country.
A retirement today can easily stretch 25 or 30 years. The Canadians who enjoy theirs most treat it as a long project rather than a finish line, with a written plan, reviewed yearly, that turns CPP, OAS, RRSPs, TFSAs, and home equity into a paycheque that lasts as long as they do.