The retirement landscape for Canadian seniors has transformed dramatically over the past decade. Between soaring housing costs in major urban centers and the persistent inflation eating away at fixed incomes, many older Canadians find themselves navigating financial challenges they never anticipated in their golden years.
During a recent community forum in Burlington, Ontario, I watched as Maria Delgado, a 72-year-old retired teacher, described her growing anxiety about outliving her savings. “I did everything right—or so I thought,” she told the room of nodding heads. “Now I’m wondering if my nest egg will last another decade.”
Maria isn’t alone. According to Statistics Canada’s latest report, nearly 15% of Canadian seniors live below the poverty line, with women over 75 facing the highest risk. The financial security many worked decades to build now seems increasingly fragile for a growing segment of older Canadians.
After speaking with financial advisors, retirement specialists, and seniors across the country, I’ve identified five critical financial missteps that can derail retirement security. More importantly, I’ve gathered practical solutions that can help older Canadians protect their financial well-being.
The first significant mistake is underestimating healthcare costs. While we’re fortunate to have universal healthcare, many Canadians don’t budget for the substantial out-of-pocket expenses that aren’t covered by provincial plans. Prescription medications, dental care, mobility aids, and home modifications can quickly deplete savings.
“Many of my clients are shocked by how much they need to spend on healthcare,” explains Samira Khalid, a certified financial planner with thirty years of experience in retirement planning. “The average senior can expect to spend between $5,000 and $7,000 annually on medical expenses not covered by their provincial health plan.”
To address this gap, financial experts recommend purchasing supplemental health insurance before retirement and setting aside a dedicated healthcare fund separate from regular retirement savings. The Canadian Association of Retired Persons (CARP) also suggests exploring government assistance programs like the Guaranteed Income Supplement, which many eligible seniors never claim.
The second common mistake involves housing decisions. Many seniors cling to oversized family homes long after they’ve become impractical, creating a financial burden through maintenance costs, property taxes, and utilities. This attachment to the family home often comes at the expense of freeing up equity that could significantly improve quality of life.
Robert Chen, a 68-year-old former accountant from Winnipeg, admitted he waited too long to downsize. “My wife and I kept our four-bedroom home for years after the kids left. Looking back, we spent nearly $80,000 on repairs and property taxes that could have boosted our retirement income if we’d moved sooner.”
Financial advisors recommend evaluating housing options at least five years before retirement, considering factors beyond emotional attachment. This timeline allows for strategic planning around downsizing, relocating to lower-cost communities, or exploring options like life leases that free up equity while providing stable housing.
The third critical error involves inadequate protection against fraud and financial abuse. Older Canadians lose an estimated $300 million annually to financial scams, according to the Canadian Anti-Fraud Centre. Even more troubling, financial abuse by family members or caregivers often goes unreported.
“The psychological impact of financial fraud on seniors can be devastating,” notes RCMP Sergeant Teresa Wong, who specializes in elder fraud prevention. “Beyond the financial loss, victims often experience profound shame and deteriorating health following these incidents.”
Protective measures include setting up fraud alerts with financial institutions, creating a trusted contact person for accounts, regularly reviewing financial statements, and learning to recognize the warning signs of common scams targeting seniors. The Canadian Network for the Prevention of Elder Abuse offers workshops in communities across the country to help seniors protect themselves.
The fourth mistake is failing to adapt investment strategies for longevity. With Canadians living longer than ever—the average 65-year-old can now expect to live well into their 80s—many seniors maintain overly conservative investment approaches that don’t generate sufficient returns to outpace inflation.
“I see too many retirees shift entirely to fixed income at 65, virtually guaranteeing they’ll lose purchasing power over a 20-plus year retirement,” explains David Johnston, portfolio manager at a major Canadian investment firm. “Today’s seniors need growth components in their portfolios well into retirement.”
Financial advisors now recommend maintaining a balanced portfolio throughout retirement, typically including 30-40% growth investments even for retirees in their 70s. This approach helps combat the erosion of purchasing power while providing income stability. The Financial Consumer Agency of Canada provides excellent resources for seniors looking to reassess their investment approach.
The fifth and perhaps most consequential mistake is poor tax planning. Many retirees fail to structure their income and withdrawals to minimize tax implications, potentially leaving thousands of dollars on the table each year.
“Strategic tax planning can mean the difference between comfortable retirement and constant financial stress,” says Janet Williams, a tax specialist who works extensively with retirees. “Simple adjustments to which accounts you draw from first can preserve thousands in retirement income.”
Effective strategies include income splitting with spouses, staggering RRIF withdrawals, utilizing Tax-Free Savings Accounts strategically, and timing Old Age Security benefits to avoid clawbacks. The Canada Revenue Agency offers free tax clinics specifically for seniors, though these are often underutilized.
Back at the Burlington community forum, I watched as Maria Delgado’s expression shifted from worry to cautious hope as financial counselors walked through practical steps to strengthen her financial situation. “I wish I’d known some of this ten years ago,” she said, “but I’m grateful there are still things I can do now.”
For Canada’s growing senior population, financial security doesn’t happen by accident. It requires proactive planning, regular reassessment, and sometimes the courage to make difficult changes. The good news is that with the right information and support, many financial missteps can be corrected before they compromise the retirement security our seniors have worked so hard to achieve.
