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Patricia and Craig* both turn 65 in 2026. Until U.S. President Donald Trump’s trade war and all the uncertainty that has caused both in the markets and the economy they had both planned to retire next year. Now they aren’t so sure that’s a realistic goal.

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The Ontario-based couple bought their dream home in 2020 and are aggressively paying down a $250,000 mortgage at four per cent. The home is currently valued at about $400,000 and the mortgage, which is up for renewal at the end of this year, is about $1,900 a month (this includes $400 to help pay down the principal).

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Their total annual expenses are $90,000. This includes about $10,000 for travel, which they plan to continue to do at least for the next 10 years. They want to maintain their current lifestyle in retirement.

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Patricia earns about $70,000 a year before tax and Craig earns about $110,000 annually before tax. Both Patricia and Craig have employer pension plans that are indexed to inflation. If they retire as planned at 65, Patricia will receive $20,000 a year and Craig will receive $10,000 annually. Their anticipated Old Age Security benefits at 65 will bring in another combined $10,000 ($5,000 each) annually. At this point, they think it’s best to start Canada Pension Plan (CPP) benefits at age 70, which should increase their annual income by $15,600 for Patricia and $16,800 for Craig. Is this a good strategy?

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Patricia and Craig continue to maximize their TFSA contributions and when Patricia retires she will receive a lump sum of $14,000, which she plans to contribute to her RRSP. Her RRSP is currently worth $45,000. Is this a good idea?

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“We’re in good health and when I retire I will be able to continue my employer healthcare coverage,” said Patricia. “Still, we’re worried and want to make sure we’ll be comfortable in retirement. Right now, we’re thinking Craig should continue working another couple of years beyond age 65. Is this necessary?

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What the expert says

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Retirement income planning is essentially an overview of what is possible financially given what is available, matching future income needs with cash flow as tax efficiently as possible. A plan will give Patricia and Craig confidence whatever the political or economic situation is, said Eliott Einarson, a retirement planner at Ottawa-based Exponent Investment Management.

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“The key is to ensure they can sustain enough income throughout retirement or the next 30 years, planning for both the earlier years when they are the healthiest and most active but without neglecting the later years when healthcare-related costs can play a larger role.”

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Patricia and Craig have determined they will need to generate $90,000 after tax annually in retirement, including $1,900 a month for mortgage payments and $10,000 for travel.