Retirement is cheaper than you think. According to Statistics Canada, the average expenditure per household for those aged 40 to 54 in 2021 was $120,646. For the 55 to 64 cohort, it was $99,623, and for Canadians aged 65 and older, $61,855. Taxes tend to decline in retirement for most retirees, though it depends on the individual. Personal insurance payments and pension contributions were another contributor to the decline, with $8,418, $6,756, and $1,469 reported as the average annual expenditures for the three groups.
Investment fees can seriously impact retirement savings. A retiree paying high investment fees could significantly reduce their ability to spend in retirement. For a 65-year-old with a $1 million investment portfolio, a one percent lower return would decrease potential annual withdrawals by more than $7,000.
Overall, it is important for retirees to do their own math and personalize their retirement planning. Factors such as spending habits, investment fees, and life expectancy can significantly impact retirement savings and income. It may be beneficial for some individuals to defer their CPP and OAS payments to maximize their pension income. By considering these key elements and making informed financial decisions, retirees can ensure a secure and comfortable retirement.
