Retirement planning remains essential for Canadians in the present-day setting. However, according to the Fidelity Canada Retirement Report 2025, the landscape has undergone dramatic changes and is now more complex compared to 20 years ago. The average retirement age has likewise risen to 65 from 61 in 2005.
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CRA checklist
If you’re preparing to retire, it would help to review and pass the Canada Revenue Agency (CRA) checklist before saying goodbye to working life. The CRA administers not only the tax laws but also various benefits and retirement-related programs, including retirement savings plans and pensions. Financial planners also suggest creating an investment portfolio well in advance of your retirement date.
1. Envision your lifestyle
The first of five major items on the checklist is figuring out how much you’ll need in retirement. Take the time to compute and estimate your expenses, aligning them with the lifestyle you envision. It should answer the question, “Will you have enough between now and your expected retirement date?”
2. Stay informed about CPP and OAS benefits
The second item is directly linked to the CRA. Stay informed about government benefits, particularly the Canada Pension Plan (CPP) and Old Age Security (OAS). CPP payouts vary based on individual contribution history. In 2025, the maximum pension at age 65 is $1,433, although most pensioners receive an average monthly pension of $844.53.
For the OAS (age 65 to 74), the maximum monthly amount is $734.95 (July to September 2025). Retirees can opt to defer pension payments until age 70 for higher amounts. The permanent increase is up to 42% and 36% for the CPP and OAS, respectively.
3. Utilize the RRSP and TFSA
Utilize the Registered Retirement Savings Plan (RRSP) and the Tax-Free Savings Account (TFSA) if finances allow. You have a tax-sheltered and tax-advantaged investment account. Regular contributions to these retirement planning powerhouses can fill the income shortfalls of the CPP and OAS benefits.
4. Create pension-like income
Canadian stocks are eligible investments in an RRSP and TSFA. TSX’s dividend pioneer, Bank of Montreal (TSX:BMO), and first dividend king, Canadian Utilities (TSX:CU), can provide pension-like income streams.
BMO, Canada’s oldest financial institution, has a dividend track record of 196 years and counting. This $111 billion bank started paying dividends in 1829. At $153.80 per share, the current dividend yield is 4.3%. In the first half of fiscal 2025 (six months ending April 30, 2025), net income rose 29.8% year-over-year to $4.1 billion, notwithstanding the challenging environment.
Canadian Utilities wears a crown owing to 52 consecutive years of dividend increases. If you invest today, the utility stock trades at $37.61 per share while the dividend offer is 4.9%. The $10.2 billion company provides essential services in North America and operates a global portfolio of utilities and energy infrastructure assets.
5. Pay down debt
Besides allocating funds for savings and investments, prioritize paying down debt or eliminating it as much as possible. You should not be carrying debt or be debt-burdened when heading into retirement if you want your savings and pensions to last longer.
Ultimate objective
The ultimate objective of retirement planning is to ensure financial security and enjoy the golden years. Passing the CRA checklist will largely determine your readiness for a successful transition into retirement life.
