Skip Navigation

News and Updates

Planning for retirement when it’s ten years, five years, and one year away

Planning for retirement but don’t know where to start? You’re not alone. Here are some action items you can take as your retirement date draws closer.

Ten years away

Personalize your plan
Starting your retirement planning ten years before your target retirement date helps to ensure you retire on time and with enough resources to live your golden years the way you’ve always dreamed you would. Start by visualizing your ideal retired lifestyle – are you downsized and living modestly, or travelling the world in luxury? It would be best to consider what age you want to retire at, your current financial situation, your spouse’s plans, and your personal goals for retirement. Different retirement lifestyles require different plans, so early retirement planning is crucial.
Create a budget
Begin by calculating how much you currently have saved for retirement and how much you will likely have saved by your target retirement date. Identify and add all sources of income you will receive after retirement, including your workplace retirement plan, to determine your monthly fixed income. Re-visit your ideal retirement lifestyle vision again and estimate the associated expenses – are you saving enough? Make sure to factor in future medical costs, dental treatments, and home or auto repairs.
Downsize on debt
It’s hard to build your savings while still making debt payments. Now’s the time to play catch up and focus on getting yourself debt-free. Book an appointment with a financial advisor to discuss your current debt options and to determine if it makes sense to pay off your mortgage before you retire.

Five years away

Budget check-in
At the five-year mark, you should check in with the budget you prepared earlier to see if anything has changed, such as unforeseen expenses that may have impacted your initial savings plan. If you’re still far from your savings goal, you may have to tighten your belt for the next five years and allocate more of your income toward your retirement fund. Alternatively, you can push your target retirement date back by a few years without changing your current lifestyle.
Assess risk tolerance
Many workers, as they approach retirement, are tempted to shy away from stocks to reduce their risk. Conversely, those behind on their savings may invest in riskier assets to produce higher returns. However, both often deliver mixed results. Being too conservative offers little market growth potential, but taking on too much risk can be a significant setback if markets decline.
In this stage of life, it’s important to maintain a balanced mix of stocks, bonds, mutual funds, and other assets that suit your risk tolerance and retirement timeline. If you’re unsure about your risk tolerance or have questions about diversifying your portfolio, you should consider consulting a financial advisor.
Research insurance options
According to a recent report, the average life expectancy of Canadians is currently just over 80 years1. This means you should consider insurance options that can help to provide coverage for a lengthy retirement – including health, dental and vision care plans, prescription drug coverage and travel insurance that may become necessary in your later years. It would be best if you also considered a life insurance policy that ensures your family is protected once your group coverage ends. A life insurance benefit can help cover final expenses, pay off mortgage/debt, and maintain financial security for your loved ones.
Attend a retirement workshop
Attending a retirement workshop is a great way to get an in-depth overview of the valuable information you will need to know heading into retirement. Workshops also allow you to ask specific questions and have them answered by an industry professional.
OTIP offers free retirement workshops to anyone in the education community. The workshop covers retiree health insurance benefits, tax, and estate planning before and after retirement, RRSP and investment preparations, and more. Check out OTIP Retirement Workshop to learn more and sign up for a workshop near you.

One year away

Pick up a new hobby
As your retirement date draws closer, you should start thinking about the hobbies and activities you may be interested in spending your time on during your retirement. Consider your interests and goals, and research local associations and community groups that offer related programming. There are many options: volunteering, learning a new trade, joining a community sports league, etc. Getting involved in these activities before you begin your retirement can help you develop your social circle outside of work and provide a smoother transition – helping you avoid the feeling of “what now?”
Try a practice run
Revisit your budget once more and make any necessary adjustments to calculate your updated projected retirement income. Then, try living on it for a couple of months. How does it feel? If you’re finding yourself living easily with extra cash to spare, then you’re on the right track for a great retirement! If you’re having trouble making ends meet, you’ll likely need to reassess your current retirement plan. You’ll have to identify the areas you can adjust, such as your budget, savings plan, investments and possibly your retirement timeline. The good news is that you still have time to make these changes to your plan before taking the plunge into retirement.
If you have any questions about your retirement planning, life insurance, or the RTIP health and dental plans, contact a Life and Living Benefits Representative at 1-800-267-6847 or view the available RTIP health and dental plans.

  1. Government of Canada – Retirement needs
Need help?
How can we help?