Retirement Is About More Than How Much You’ve Saved

You can do everything right on paper — save diligently, spend reasonably, and stay invested for the long haul — and still experience a very different retirement from someone who did many of the same things.

One reason is something many retirement checklists don't emphasize enough: timing.

It's easy to make retirement planning about one number: Have I saved enough?

That's an important question. But once you stop working and begin drawing income from your savings, another factor becomes increasingly important: when your investment returns happen.

Same Savings. Different Outcomes.

Imagine two people who each retire with $1 million invested. They spend about the same amount each year and, over the long run, their investments earn similar average returns.

You might expect their retirement outcomes to be similar.

They may not be.

This is known as sequence-of-returns risk. When you're withdrawing money from your investments, the order in which good and bad market years occur can have a significant impact on how long your savings last.

A market decline early in retirement can be particularly challenging. If you need to withdraw money while investments are down, you may have to sell investments at lower values. That leaves less money invested to participate in a future recovery.

The same downturn later in retirement may have a very different impact, particularly if your portfolio has had years to grow beforehand.

Same starting savings. Similar average returns. Different order. Different results.

The Years Around Retirement Matter

The transition into retirement is an important financial turning point.

Before retirement, you're generally focused on building your savings. You may be contributing to an RRSP or TFSA, participating in a workplace pension, and investing through different market conditions.

Once retirement begins, the questions change.

How much can I comfortably spend? When should I start CPP or OAS? How much should I withdraw from my RRSP or RRIF? How much should remain invested for the years ahead?

For many Canadians, retirement income comes from several sources — CPP, OAS, workplace pensions, RRSPs, RRIFs, TFSAs and other investments. How those pieces work together can be just as important as the total amount you've saved.

You Can't Control the Timing. You Can Prepare for It.

No one knows what the markets will look like when they retire.

You could experience several strong years. You could retire just before a significant downturn. You could face higher inflation at the same time.

Trying to predict exactly what will happen isn't a retirement strategy.

Instead, consider how your plan would respond.

Depending on your circumstances, that could include:

• Keeping some funds available for near-term spending so you aren't forced to sell long-term investments during a market decline.
• Maintaining an appropriate investment mix based on your time horizon, goals and comfort with investment risk.
• Building flexibility into your withdrawals so discretionary spending can be adjusted if circumstances change.
• Coordinating your different income sources, including CPP, OAS, pensions and personal investments.
• Reviewing your plan regularly as your spending, investments, tax situation and circumstances change.

None of these strategies eliminates investment risk. The goal is to give your retirement plan enough flexibility to respond when things don't go exactly as expected.

Preparation Over Prediction

It's tempting to ask what the market will do next.

Should I retire now? Should I wait? Should I move more money into cash? What if the market falls shortly after I retire?

No one can reliably answer those questions in advance.

A stronger approach is to build a plan that doesn't depend on getting the timing exactly right.

Instead, ask:

What would happen to my retirement plan if markets fell early on?

How much of my income would still be covered by CPP, OAS or a pension?

Which expenses are essential, and which could be adjusted if necessary?

Do I have enough flexibility in my plan to handle an unexpected market environment?

These questions are often more valuable than trying to predict the next market cycle.

Your Retirement Plan Should Give You Confidence

Retirement isn't simply the finish line after decades of saving.

It's a transition from building wealth to using it — and that transition deserves its own strategy.

You can't control the market environment you retire into. But you can prepare for a range of possibilities.

A thoughtful retirement-income plan can help you understand how much you may be able to spend, where that income can come from, and how your strategy might respond when markets don't cooperate.

You can't choose the timing. But you can choose how prepared you are for it.

If retirement is approaching — or you're already there — a conversation with a financial professional can help you stress-test your plan against different market and spending scenarios and identify where you may be able to create more flexibility.

 

Sources:

1. Morningstar, 2025. How to Avoid Outliving Your Retirement Savings? It’s All in the Sequence.
   https://www.morningstar.com/retirement/how-avoid-outliving-your-retirement-savings-its-all-sequence

2. Government of Canada, 2025. Sources of income during retirement.
https://www.canada.ca/en/services/life-events/retirement/sources-income.html

3. Government of Canada, 2025. Retirement planning.
https://www.canada.ca/en/financial-consumer-agency/services/retirement-planning.html
 

This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Advisor Websites to provide information on a topic that may be of interest. Copyright [October 1, 2026] Advisor Websites.