5 Critical Things to Do Before Retirement

We often view retirement as the end goal, but it’s actually one of the biggest transitions in someone’s life. To make that transition as smooth as possible, you need to prepare. So, today, we’re walking through the 5 critical things you should do before you retire.

Whether you’re 6 months or 5 years from retirement, this episode will help you feel confident — and avoid costly mistakes.

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You’ll Learn

Budget that reflects your new life: Pull the last 12 months of card/chequing transactions into a spreadsheet to see where money actually goes. Separate a “base lifestyle” (must-haves) from “fun extras” (travel, hobbies) so you can flex the extras in rough markets without feeling deprived.

Plan for irregulars (without panic): Roofs, cars, healthcare, and helping kids/grandkids won’t sink a plan if you pencil them in. Drop big-ticket items as dated line items in your projection so you see affordability over time.

Emergency fund vs. cash wedge: In retirement, job loss isn’t the risk—selling assets at a bad time is. Hold a three-year cash wedge equal to the gap between portfolio income and your spending needs; refill it when markets are up.

Where to park the cash (don’t overthink it): High-interest savings, short GIC ladders, or cash ETFs all work. The return difference is usually tens to a few hundred dollars a year—choose the simplest, most liquid option and move on.

From accumulation to decumulation: You don’t need a new investing style at retirement. Keep the strategy you understand, stop DRIPs 1–3 years out to build cash, and run a five-step portfolio cleanup:

Set target number of holdings and position size;
Eliminate tiny positions (top up to target or sell);
Cut duplicates (e.g., multiple banks doing the same job);
Review losers—sell when fundamentals weaken;
Trim oversized winners to control single-stock risk.

Create your own income (any strategy): Total return is what funds withdrawals. In good years, sell a few shares; in bad years, draw from the wedge. This gives you control, flexibility, and often lower fees than “income products.”

CPP/OAS timing (Canada): Get your official estimates, then model 65 vs 67–70. Delaying increases the benefit and raises your “guaranteed paycheque,” but projections show the trade-off in dollars for your situation. For many, 67–68 is a practical sweet spot; 70 maximizes longevity insurance.

The pre-71 tax window: Use lower-income years to draw RRSPs strategically, consider early RRIF conversion for credits/spousal age factors, and aim to even out your lifetime marginal tax rate to avoid a later “tax bomb.”

Purpose, routine, and relationships: Retirement joy isn’t automatic. Draft a weekly rhythm (movement, social, learning), identify “time-bucket” goals you must do earlier vs later, and have candid spouse talks about timing, daily habits, travel, and alone/“us” time before day one.

Quick wins you can do this week:

Export last year’s transactions; mark base vs fun line items; total each.
Compute your cash-wedge target: (Annual need ? portfolio income) × 3.
Do the cleanup pass on positions under 1% and obvious duplicates.
Request CPP/OAS (or Social Security) estimates and test three start ages in a projection.
Put one “purpose rep” on the calendar: a club visit, volunteer inquiry, or recurring activity.

Want to Get Ready for Retirement?

Retirement Loop is a community of over 500 Canadians who are in or nearing retirement. We have developed tools, including the RL Projections Tool, to help them navigate the transition and remain confident once they arrive. There is also a lot of power in having hundreds of people working with the same program to help each other. You can finally connect with other retirees going through the same challenges.

Canadians who enjoy their retirement:

Know which account to withdraw from first.
Build a clear financial plan covering multiple scenarios.
Use an agile budget through the go-go, slow-go, and no-go phases.
Create multiple sources of income, including CPP, OAS, investment income, and others.

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