Ep 188 - 6 Costly Retirement Mistakes Canadian Retirees Keep Making (And How To Avoid Them)

In this episode, Joe Curry breaks down six costly retirement mistakes Canadians make around CPP timing, RRSP withdrawals, TFSA usage, and OAS clawback. Learn how proper retirement income planning can help you reduce taxes, protect benefits, and create a more efficient, coordinated retirement strategy.

Key Takeaways

Taking CPP too early can significantly reduce your lifetime income
Starting CPP at 60 may feel right, but delaying it often provides stronger, inflation-protected income later in retirement.

Avoid letting your RRSP grow untouched for too long
Strategic RRSP withdrawals in your 60s can help reduce future taxes and prevent large RRIF withdrawals.

OAS clawback is driven by income, not assets
Without planning, multiple income streams can unintentionally push you over the clawback threshold.

Your TFSA is a powerful tax-free retirement income tool
Using your TFSA strategically can help fund large expenses without increasing taxable income.

Plan for the survivor scenario early
Losing a spouse can reduce benefits and increase taxes. Planning ahead helps protect the surviving partner.

Insights Worth Sharing

“CPP isn’t just an investment - it’s longevity insurance.”

“Delaying income decisions often improves the long-term success of your retirement plan.”

“A large RRSP left untouched can quietly become a tax problem later.”

“The TFSA gives you flexibility when you need income without tax consequences.”

“Retirement mistakes don’t feel big in one year - but over decades, they add up fast.”

6 Retirement Mistakes That Can Quietly Cost Canadians Thousands

If you’ve done a good job saving for retirement, you might assume the hard part is behind you. But in reality, how you draw income in retirement can matter just as much, if not more, than how you invested along the way.

In this episode, I walk through six common retirement mistakes I see Canadians make, and how small decisions around timing and sequencing can cost tens or even hundreds of thousands of dollars over time.

The first big mistake is taking CPP as early as possible. While it’s tempting to start payments at 60, doing so permanently reduces your benefit. For many Canadians, especially those with other assets, delaying CPP creates a stronger foundation of guaranteed, inflation-adjusted income later in life. It’s not about breakeven, it’s about protecting your future income.

Next is the belief that you should avoid touching your RRSP. I understand the hesitation. It represents years of hard work. But leaving a large RRSP untouched can lead to significant tax problems later. Once RRIF withdrawals begin, you may be forced to take out more income than you need, pushing you into higher tax brackets and triggering OAS clawback.

That leads to another common issue: not planning for the OAS clawback. Many retirees don’t realize they’ve crossed the threshold until it shows up on their tax return. With the right planning - like managing RRSP withdrawals earlier and using TFSAs strategically - you can often reduce or avoid this entirely.

And that brings us to one of the most underused tools in retirement: the TFSA. While many people treat it like a savings account, it’s actually one of the most powerful income tools available. Withdrawals are tax-free and don’t impact your OAS or tax bracket, making it ideal for funding larger expenses without creating tax problems.

Another overlooked area is planning for the surviving spouse. When one partner passes away, income often drops, but taxes can increase. Without proper planning, the surviving spouse may face higher tax rates and reduced benefits. Building flexibility into your plan early can make a meaningful difference.

Finally, many people simply wait too long to do real retirement planning. The earlier you start - ideally in your mid to late 50s - the more options you have. But even if you’re already retired, it’s not too late to improve your plan.

The key takeaway is this: retirement decisions don’t exist in isolation. CPP, RRSPs, TFSAs, OAS, and taxes all work together. When you coordinate them properly, you can create a more tax-efficient, flexible, and secure retirement.

Learn more about our retirement planning process at MatthewsAndAssociates.ca