Canadians May Spend Less in Retirement Than They Think

What if you spend decades saving for retirement in Canada, only to discover that you may never actually spend most of the money you’ve accumulated? Many Canadians worry about running out of retirement savings. But research into retirement spending suggests something surprising: household spending often declines as people get older, even when they have money available. In one Canadian analysis using Statistics Canada spending data, a household headed by a 77-year-old spent approximately 40% less than a household headed by a 54-year-old. That raises an important question: Are you saving for a retirement lifestyle that you may never actually need to fund?

In this video, I’ll explain three factors that can change how much of your retirement savings you actually need to spend: declining spending with age, government retirement benefits, and the way those two factors can reduce pressure on your investment portfolio over time. Here’s what I’ll cover:

– Why many Canadians spend less money as they get older
– What retirement spending research suggests about your 70s and 80s
– Why the traditional 70% to 80% income replacement rule can be misleading
– How CPP and Old Age Security (OAS) can reduce your reliance on retirement savings
– How delaying CPP until age 70 can increase your monthly retirement pension
– Why your actual spending gap matters more than an arbitrary $1 million or $1.5 million retirement target
– A hypothetical couple retiring at 61 with $750,000 in RRSPs and TFSAs
– How retirement savings may change before and after CPP and OAS begin
– Why RRSP withdrawal timing and the OAS clawback matter
– How taxes, losing a spouse, market downturns, and long-term care costs can change the picture
– When it may make sense to spend more during the earlier years of retirement

I’ll walk through the example of Nadia and Rob, a Canadian couple retiring at 61 with approximately $750,000 saved and a $57,000 annual spending target. We’ll examine how their portfolio could fund the early years of retirement, how OAS and delayed CPP could reduce their reliance on withdrawals later, and why a retirement plan should account for changing spending rather than assuming every year looks the same.

The goal isn’t to spend recklessly or assume you’ll never run out of money. It’s to understand how much your savings actually need to provide, so you can make informed decisions about enjoying retirement while maintaining financial security.

If you’re approaching retirement in Canada and wondering whether you’re saving too much, spending too little, or delaying retirement unnecessarily, book a call with me to review your CPP, OAS, RRSP, TFSA, and retirement income strategy.

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PUBLISHED OCT 30, 2026