Maybe you spent decades dreaming, saving, and planning for your retirement. Or perhaps you’re just going to dive right in with eyes wide shut.  Either way, having a financial plan matters—because no one wants to hit 80 and realize their money didn’t last.  

Maybe you want to buy an RV and drive across the country. Or perhaps you’ll teach your grandkids how to play chess or garden. You might finally dust off that pottery wheel that’s been beckoning from your garage. 

Vancity and Aviso Wealth Advisor Kalev Vesik, has helped many people prepare their finances for retirement and has advice on what not to do (and what to do instead) so you can ensure your financial needs match your retirement goals.  

Mistake #1: Drawing down too fast.

When the paycheques stop, it can be tempting to treat your nest egg like an all-you-can-eat buffet. But instead of wolfing it all down in one go it’s better to pace yourself so you can enjoy the whole menu over time, i.e., the rest of your life!  

Once you stop working, your retirement savings becomes your paycheque. If you pull money out too quickly it can increase your taxes and risk you running out of funds earlier than expected. 

“People often focus on the total dollar amount in their accounts, but don’t always think about the rate at which they’re drawing it down,” says Kalev. “If that pace isn’t sustainable, they could end up outliving their money.” 

“People often focus on the total dollar amount in their accounts, but don’t always think about the rate at which they’re drawing it down,” says Kalev, Vancity and Aviso Wealth Advisor

Timing matters, too. If you withdraw heavily in the first few years of retirement, especially if there’s a market downturn, you could have losses that your portfolio can’t recover from. This is known as a sequence of returns risk, and it can quietly derail your retirement savings. 

A smart drawdown plan starts with diversification across accounts, asset classes, and even timing. That might mean pulling from your Registered Retirement Savings Plan (RRSP) in stages, leaving your Tax-Free Savings Account (TFSA) untouched for growth, or deferring your Canada Pension Plan (CPP) to boost your guaranteed income later. 

Oh, and taxes? They don’t retire just because you did. “RRSP withdrawals are fully taxable, so taking too much out too soon can push you into a higher tax bracket,” Kalev explains. “A more strategic approach is to draw down gradually while deferring CPP and Old Age Security (OAS) if possible.” 

“RRSP withdrawals are fully taxable, so taking too much out too soon can push you into a higher tax bracket.”

Try this: 

• Review your spending needs (not wants) and build a withdrawal schedule that matches. Speak to a wealth specialist to help you build a sustainable, long-term plan.  

• Talk to your wealth specialist about deferring CPP or OAS for higher long-term benefits. 

• Coordinate RRSP and TFSA withdrawals to minimize your tax hit. 

• Consider smoothing income over multiple years to avoid tax spikes. 

• Create a budget as well as a financial plan.  

• Consider a part-time job doing what you love. Serving vino at your local winery, or groundskeeping at a nearby golf course can come with some additional perks!  

The flip side of this mistake is not using your retirement savings. Some folks have spent their entire lives saving, and it’s difficult to make the switch to spending. “You earn money to earn time,” Kalev reminds us. So don’t be afraid to spend your money to indulge in your passions—like wintering in Mexico or taking up pottery. “With a plan, you know how much money you can spend,” says Kalev. “And it becomes a lot easier.” 

Mistake #2: Counting too much on government benefits.

It’s easy to assume that CPP, OAS, and the Guaranteed Income Supplement (GIS) will cover your basic needs. After all, they’re government programs designed to support retirees. But, unfortunately, that’s not the reality. “For most people, the amount of those benefits won’t come close to covering all their basic needs,” Kalev says. “You need to treat them as a supplement, not a foundation.” 

He encourages people to think of their retirement income like a three-legged stool: “You want CPP, OAS, and GIS to be one leg. Your own savings and investments are another. And the third might be an employer pension or other income. Sure, you can try sitting on a two-legged stool, but how long before it topples over.” 

It’s also important to understand how much you’ll actually receive. CPP amounts vary depending on how long and how much you contributed, and OAS can be clawed back if your income is too high. 

“We help members look at their projected benefits and compare that to their expected spending,” Kalev explains. “Often, there’s a gap, and that’s where personal savings and investments need to come in.”  

The takeaway is to layer your income sources by using personal savings, investments, and pensions alongside government benefits, not instead of them. 

Try this: 

• Check your CPP and OAS estimates through your My Service Canada account. 

• Consider how deferring CPP could increase your monthly income. Speak to a wealth specialist about your options.  

• Build a budget that assumes government benefits are only one leg of the stool.  

• Talk to a wealth specialist about integrating public benefits with your personal savings. 

Mistake #3: Giving too much, too soon.

If you have kids, you might want to help them out with a downpayment on a home or even start an education fund for the grandkids. But financial generosity should be grounded in clarity, it shouldn’t come at the cost of your own financial security. 

“People want to help their kids, and that’s understandable,” says Kalev. “But I often remind them, the best gift you can give your kids is not needing their financial support in the future.” Have a plan in place so you know what you can give. 

“The best gift you can give your kids is not needing their financial support in the future.”

Kalev also reminds members that giving doesn’t have to mean writing a cheque. “It might mean sharing your time, offering guidance, or finding ways to support your family emotionally—that don’t put your retirement at risk.  

Or, Kalev says, “If you have money leftover at the end of the month, instead of saving it, as you once would, you can give some of it to a person or organization you care about.”  

And if you do want to give financially, there may be smart ways to do it, especially if you’re a high-income retiree. “Giving can be financially advantageous,” Kalev adds. “You can pass market-based investments with big gains to charities and avoid the tax bill. You get the donation tax credit, you keep more of your liquid day-to-day cash, and everyone wins.” He points to the Vancity Community Foundation as a one-stop shop for donating to charities.

Try this: 

• Set a personal giving cap. How much can you afford to give in a year? Speak to a wealth specialist for help determining this number.  

• Consider lower-risk ways to help, like offering interest-free support. 

• Be honest with your family about your boundaries and stick to them. It might be easier to say, “This is what my wealth specialist recommends, so I’ll be doing that.”   

• Review your long-term plan before making large gifts. 

Mistake #4: Not planning for health care costs.

You might feel healthy now, but the one guarantee in life (besides taxes) is that our bodies will continue to grow older and yes, break down. And that can mean higher prescription costs, mobility aids, home support services, or even assisted living or long-term care costs.  

“Health expenses aren’t usually a problem at the start of retirement,” says Kalev. “But they become a bigger factor later on. By then, you want to have a plan in place.”  

Kalev notes that long-term care can be especially expensive and isn’t always covered by public programs. “Some people assume they’ll never need it, but statistically, the chances go up the longer you live. And the costs can be astronomical. Private home care or private residential care could be a few thousand to upwards of $10,000 per month.” 

Factoring in these costs early can help you avoid financial surprises later and give you more options for how and where you age.  

Try this: 

• Explore long-term care insurance or self-insurance options. 

• Add a health care category to your retirement budget. 

• Think about where you want to live and what kind of support you might need. 

• Build an emergency fund that can flex with medical needs. 

• Be sure to claim all your relevant health expenses on your taxes.

Retirement is a big shift, both financially and emotionally. But you don’t have to go at it alone.  

You’ve worked hard to get to this stage. Retirement should be a time of freedom, not financial second guessing. With a little planning and the right advice, you can avoid the pitfalls and enjoy the next chapter with confidence. 

“The best day to start a financial plan was yesterday,” says Kalev. “The second-best day is today. Don’t stress or put it off, just talk to someone and tackle it head-on. You might be surprised how much better you sleep after.” 

“The best day to start a financial plan was yesterday,” says Kalev. “The second-best day is today.”

Vancity and Aviso wealth advisors like Kalev can help you think through every angle, from taxes and timing to generosity and longevity, so you can retire with confidence, not guesswork. 

Book an advice and planning appointment with a wealth specialist today. Let’s make your retirement plan as ready as you are. 

_{Mutual funds and other securities are offered through Aviso Wealth, a division of Aviso Financial Inc. .The information contained in this article was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This material is for informational and educational purposes and it is not intended to provide specific advice including, without limitation, investment, financial, tax or similar matters. Using borrowed money to finance the purchase of securities involves greater risk than purchasing using cash resources only. If you borrow money to purchase securities, your responsibility to repay the loan and pay interest as required by its terms remains the same even if the value of the securities purchased declines. Please see our Terms of Use. or complete.  This material is not intended to be investment, tax or other advice and should not be relied on without seeking the guidance of a professional to ensure your circumstances are properly considered.}