Are You Making These Planning Mistakes For Your Future?

Ideally, retirement should be a time when you take a break from the daily grind to travel the world, play with your grandchildren or pursue other interests. However, this can only happen if you had built up a comfortable nest egg. According to a study by the Fraser Institute, most Canadians are not saving enough for retirement. As a result, many retirees end up frustrated, struggling to survive on their Canada Pension Plan (CPP) and Old Age Security (OAS).

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Here are some retirement planning mistakes you need to avoid at all costs:

Not starting soon enough

When starting a career in their twenties, most people dismiss retirement planning, thinking that their 60s are too far off. However, time catches up faster than they imagined. Starting early allows your retirement savings to compound over time. You can also save a larger percentage of your income, especially if you do not have a family. To understand how much your money can grow over the years, you need to find the best retirement calculator in Canada.

A good retirement savings calculator will show you how much you need for retirement and the amount you have saved currently. The calculator takes into consideration your investment fees, registered and non-registered savings, inflation, income tax and annual returns to come up with these estimates. However, the calculator has its limitations. For example, it cannot be used to foresee future changes to tax rates or government retirement programs.

Accumulating too much consumer debt

If you want to enjoy your golden years, getting debt-free should be a top priority. Paying off your debts will free up more money which can then be redirected to your retirement savings. One of the best strategies of avoiding debt is by using cash instead of a credit card. People usually spend more when using credit cards. In addition, credit cards also come with fees and charges. Avoiding debt will also require making a realistic budget and sticking to it.

Depending on your home to fund retirement

For some people, their retirement plan is to purchase a home, wait for its value to appreciate, then sell it off and use the proceeds to fund their retirement. However, this strategy doesn’t always work. First, the value of your home might not increase as expected. In addition, any profits realized from the sale will be reduced through expenses such as agent fees, moving costs and renting a new house.

Not preparing for the unexpected

As they say, shit happens. You need to be prepared for unexpected events which could disrupt your retirement plans. For example, if you happen to get divorced, your CPP and OAS credits will get split between you and your ex. In case of death, the remaining spouse will lose part of the deceased’s CPP and OAS income. One of best ways of dealing with such unexpected situations is to stagger retirement. This will require one spouse to work longer than the other.

Retiring too soon

While the idea of taking an early retirement might sound great, the reality can be quite disconcerting. Many people find their identity and fulfillment in their jobs. As a result, most retirees find themselves depressed and bored when they stop working. In addition, your CPP earnings are based on how long you have been working and how much you have saved. Therefore, working for a little while longer could greatly boost the size of your pension.


Don’t spend your retirement years getting stressed about cash. Begin a retirement plan today to enjoy a work-free and debt-free life. You can get more information about CPP and OAS on the Government of Canada website.


Charles Mburugu is a HubSpot-certified content writer/marketer for B2B, B2C and SaaS companies. He has worked with brands such as GetResponse, Neil Patel, Shopify, 99 Designs, Oberlo, Salesforce and Condor. Check out his portfolio and connect on LinkedIn.

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