6 money tips for life in retirement

Adjusting to life in retirement can sometimes mean spending more than you bring in – whether this is because of underestimated monthly expenses, unexpected costs, or overestimating retirement income – here are some ways to save money in retirement.

1. Sign up for government benefits

Check to make sure you have applied for all of the government retirement benefits you are entitled to – this may include Canada PensionPension A steady income you get after you retire. Some pensions pay you a fixed amount for life. Others save up money for you while you are working. You use that money to create income after you retire.+ read full definition Plan (CPP) payments, Old Age SecurityOld age security Canada’s largest public pension program. You qualify if you are age 65 and you have lived in Canada for at least 10 years after age 18. You may pay tax on your OAS income.+ read full definition (OASOAS See Old age security.+ read full definition), or the Guaranteed Income Supplement (GIS)Guaranteed income supplement (GIS) Extra money from the government for people with low¬ incomes who get Old Age Security. What you get depends on your income or your joint income if you have a spouse or common-law partner. GIS is not taxable.+ read full definition. Learn more about government benefits.

2. Learn about tax credits

Older Canadians may be able to use taxTax A fee the government charges on income, property, and sales. The money goes to finance government programs and other costs.+ read full definition credits to reduce the amount of tax they pay. Look for credits that are available to you, and consider working with a tax professional to understand your optionsOptions An investment that gives you the right to buy or sell it at a set price by a set date. The buy right is termed a “call” option, and the sell right is termed a “put” option. You buy options on a stock exchange.+ read full definition. Learn about key tax credits and other options available to older Canadians.

3. Track your spending

While this may seem like a simple suggestion, taking time to track your monthly expenses may help you understand how much you are actually spending. You may be surprised to see how much you spend on certain items – like eating out, travel, or groceries. Seeing what you spend can help you decide where you can cut back. Use the Retirement Budget Worksheet to estimate your monthly expenses.

4. Contribute to a TFSA

If you do have money left over at the end of the month, consider savings options that will maximize your returns. For example, consider saving money in a TFSATFSA See Tax-Free Savings Account.+ read full definition. Your savings grow tax-freeTax-free Money that you do not pay tax on.+ read full definition and you won’t pay any tax when you withdraw. Also, you can use a TFSA to save for any goal. Learn more about how TFSAs work.

5. Rent out part of your home

Consider putting your house to work for you by renting out a room or sharing your home with a friend instead of living alone. Just remember that you will pay tax on your rental income. Learn more about renting out your home.

6. Work part time

Finding part-time work in retirement can provide extra income and help you stay engaged and active.

Key point

Whether you feel you aren’t bringing in enough income in retirement, or you are spending more than you planned, there are easy ways to save more money and find extra income in retirement.

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