During one of our live Q&A webinars, Common Wealth members asked our financial planning team the questions many Canadians have about retirement. How much do I need to save? Should I choose a TFSA or an RRSP? When should I start CPP? We’ve collected 20 of the most common ones here, with our planners’ answers.
1. How should I adjust my investments as I get closer to retirement?
As you approach retirement, consider when you will need the money, how much investment risk you are comfortable with, and how long your savings need to last. You may want to gradually reduce risk, but you will likely still need some growth to support a long retirement.
2. What is the best order for withdrawing my retirement savings?
The best order depends on your income, tax bracket, government benefits, and estate goals. A plan may combine RRSP or RRIF withdrawals with TFSA and non-registered savings to manage taxes and preserve flexibility over time.
3. Should I contribute to my TFSA or RRSP first?
A TFSA is often useful when your current tax rate is lower or you need flexible, tax-free withdrawals. An RRSP may be more valuable when your current tax rate is higher and you expect to withdraw at a lower rate later. Many people benefit from using both.
4. How can I balance everyday spending with saving?
Create a realistic spending plan that covers your needs, allows room for enjoyment, and includes regular savings toward your goals. Automating your savings can help you stay consistent, while reviewing your spending regularly allows you to adjust as your priorities change.
5. What does Common Wealth financial planning include?
Financial planning may include retirement projections, CPP and OAS timing, contribution and withdrawal strategies, tax considerations, and other financial goals. The scope is tailored to your needs and financial situation. Book a One-on-One Planning Session with a financial planner to discuss how we can support you.
6. When should I start CPP?
There is no single best age. Starting earlier provides income sooner but permanently reduces the monthly payment, while delaying can increase the payment. Consider your health, life expectancy, cash-flow needs, work income, taxes, and other savings.
7. Should I pay down debt or invest?
Compare the debt’s interest rate with the expected benefit and risk of investing. High-interest debt usually deserves priority, while lower-rate debt may be balanced with employer matching, emergency savings, and long-term investing.
8. What happens to my registered accounts when I die?
The result depends on the account type, your beneficiary designations, and your family situation. A spouse or common-law partner may qualify for tax-deferred options in some cases, while other beneficiaries may trigger tax. Keep your designations and estate plan up to date.
9. How much do I need to save for retirement?
There is no single amount that works for everyone. It depends on the lifestyle you want in retirement, when you plan to retire, your expected sources of income, and how long your savings need to last. A retirement projection can help you set a personalized savings goal and determine whether you are on track.
10. What happens to my Common Wealth account if I change employers?
Your Common Wealth account stays with you when you change employers. You can keep your account, continue saving through bank contributions, and may remain eligible for your discounted group fee.
11. Which account should I use to save for a first home?
An FHSA is often the first account to consider if you qualify because contributions may be deductible and eligible home withdrawals are tax-free. A TFSA can add flexibility, and the RRSP Home Buyers’ Plan may also be available.
12. How can I reduce taxes in retirement?
A tax-efficient retirement strategy coordinates withdrawals from your RRSP or RRIF, TFSA, non-registered accounts, and pension income. Planning when and how much to withdraw from each account can help manage your taxable income and preserve income-tested government benefits.
13. Does financial planning change if I am single?
Yes. Although the same planning areas apply, the strategies may be different when there is no spouse to share expenses, provide income, or receive assets through a spousal rollover. Your plan should be built around your own income, goals, beneficiaries, and future care needs.
14. How much can I contribute to my RRSP?
Your available RRSP contribution room is shown on your latest Notice of Assessment or in CRA My Account. Track all contributions made to your personal and group RRSPs during the year to avoid overcontributing.
15. Can I withdraw money from my Common Wealth account before retirement?
It depends on the account type and your workplace plan rules. TFSA withdrawals are generally tax-free, while RRSP withdrawals are taxable and subject to withholding tax. Locked-in or restricted funds may not be available for withdrawal. Check your account or contact the Support team to confirm your options and any applicable fees.
16. Can I transfer an RRSP or TFSA without triggering tax?
Yes. A direct transfer between financial institutions allows your RRSP or TFSA to remain registered, so the transfer generally does not trigger tax or affect your contribution room. Ask the receiving institution to arrange the transfer rather than withdrawing the funds yourself.
17. Should I consolidate my RRSPs?
Consolidation can make your investments, fees, beneficiaries, and withdrawal plan easier to manage. Before transferring, review any transfer fees, early-redemption penalties, locked-in funds, or other account restrictions.
18. Can I name a successor holder for my TFSA?
Only your spouse or common-law partner can be named as the successor holder of your TFSA. You may name another person or organization as a beneficiary, where permitted by provincial or territorial rules.
19. Can my spouse join Common Wealth?
Yes. Your spouse can join through a Common Wealth Family account and receive the same discounted group fee available to you. Book a plan review or contact the Support team to get started.
20. Can I keep contributing after I retire?
Retirement itself does not prevent contributions. You may continue contributing to a TFSA if you have room, and to an RRSP if you have room and are within the age limit. The best choice depends on your income and withdrawal plan.
Have a question that isn’t covered here?
Explore our Guide to Retirement video series, free for anyone to watch. Short, easy-to-follow videos created by our team cover everything from setting a retirement age to choosing between an RRSP and a TFSA, investing for the long term and planning your retirement income.
We also regularly host free webinars where you can learn from our financial planning team and ask your own questions. Our next one, From Paycheque to Purpose: A Financial Blueprint for Achieving Your Goals, takes place on Wednesday, November 25 at 12pm ET. Make sure to grab your spot!
If you’re a Common Wealth member, you can book a One-on-One Planning Session for advice tailored to your situation.
