10 Steps to Successfully Transition into Retirement

As you approach retirement, it’s essential to have a solid plan in place to ensure a smooth transition into this new phase of life. One crucial aspect of this plan is your financial strategy. Consulting a fee-only financial advisor or engaging in fee-for-service financial planning can help you navigate the complexities of retirement planning with confidence. In this guide, we’ll outline 10 steps to help you successfully transition into retirement.

Assess Your Current Financial Situation

Starting to plan for retirement means looking closely at your money situation. You must carefully list what you own, what you owe, and how much you spend each month. This overview helps you make a financial plan for your desired retirement. Evaluating your money situation thoroughly and objectively shows what you have to work with and helps point the way to a future where you can live comfortably and maintain your lifestyle.

Define Your Retirement Lifestyle

Thinking about how you want to spend your retirement is like planning a big trip that fits what you really want. This is the time to focus on your dreams—like travelling the world; living in a smaller, peaceful place; or spending time on hobbies you’ve put off. Talking about what you want isn’t just dreaming; it’s an essential part of making a plan for your money that helps you live the life you want. Understanding this helps you with your budget and makes sure your money goals match up with how you see your retirement, mixing dreams and reality in a good way.

Calculate Your Retirement Needs

To get a realistic estimation of your needs, try to draw up a rough budget based on your current lifestyle, and adjust it for retirement. Consider what expenses might decrease, such as commuting costs, and what might increase, like healthcare or leisure expenses. Remember to account for inflation and unexpected costs as well. Furthermore, it may be helpful to consult a financial advisor who can provide valuable insights into this crucial stage of financial planning.

The reality of financial planning is that your plan will never go according to plan. A good financial planner will assist you in creating a few alternative plans to account for unforeseen circumstances such as long-term care costs, higher inflation, living longer, poor market returns, market crashes at the onset of retirement, and much more. Stress-testing your plan is mandatory for your financial well-being.

Explore Income Sources in Retirement

Looking at all the different ways you can get money for retirement is a smart move. Besides just saving money and investing it, think about other ways to get income, like the Canada Pension Plan (CPP) and Old Age Security (OAS). Figuring out if it’s better to start getting CPP at 60 or wait until 65 can really change how much money you have when you’re older.

Also, look into any pension plans from work or any annuities you have. Exploring these options will not only help you develop a good plan for getting income when you retire but also make sure you have a mix of sources for your money; setting a strong base for the kind of life you want to live later on.

When it comes to CPP or Pension decisions, make sure that you are getting sound, objective advice. Delaying CPP or OAS when appropriate can significantly boost your retirement well-being. Advisors incentivized to manage your money may unconsciously tell you something like, “Take the CPP and reinvest it into your RRSP,” or “Take the commuted value of your pension and invest the money”. Both can be either good or terrible advice.

Humans are emotional beings, and when emotions interfere with investing, even the most well-crafted financial plan can go awry. I’ve witnessed a situation where a retired client was advised to cash her pension and invest the money. However, she was unprepared for the 20% decline that her portfolio experienced in 2022. This significant loss led her to cash investments and reinvest the money into a GIC, derailing her retirement plans. Had her advisor taken the time to understand her goals, needs, and values, and assess the suitability of the recommendation, she would have been advised to stick with the monthly pension income. In fact, the FP Canada Standard Council reports that the top two public complaints against Certified Financial Planners (CFPs) are related to suitability (20%) and integrity (20%).

Create a Withdrawal Strategy

Planning how to take money out of your savings is like trying to steer through a river that’s sometimes peaceful and sometimes full of surprises. You need to really understand how different things—like taxes, rising prices, and changes in the stock market—work together. Figuring out just the right amount to take out each year is tricky. You want to make sure you have enough money to live the way you like without running out of savings too early. This careful planning is crucial to ensure you have enough money to support you during retirement while remaining resilient and adaptable. I suggest you review your withdrawal strategy with your financial planner at least annually and sometimes even more often when markets are significantly up or down. In our office, we have quarterly review meetings.

Consult a Fee-Only Financial Advisor

When starting to plan for retirement, it’s very helpful to work with a financial advisor who doesn’t make income based on selling you products. This kind of expert, who only gets paid by you directly, can give advice that really fits your needs and goals for when you retire. They are truly experts in retirement planning and can point out good moves and ideas you might not think of, ensuring your plan is solid and tailored to your unique situation. Working with such an advisor ensures that your path to retirement is planned with precision and adaptable to life’s changing circumstances, providing you with peace of mind and confidence in your future.

Review Your Insurance Needs

As you approach retirement, consider examining your insurance policies. Assess your health insurance to determine if it provides adequate coverage for long-term care and end-of-life needs. This examination goes beyond merely organizing your documents; it’s about ensuring you have comprehensive protection against unforeseen circumstances. Adaptations may be necessary to accommodate recent changes in your health or personal circumstances. Secure and sufficient insurance coverage can simplify your transition into retirement, alleviating concerns over potential unforeseen challenges.

Alternatively, could you ask your advisor to stress test your retirement plan to account for self-insuring and using your savings to fund long-term care costs?

Update Your Estate Plan

Updating your will and other legal documents isn’t just paperwork; it’s a way to ensure how your life’s changes are mirrored in your plans. As you approach retirement, it’s critical to make sure your will, who has the authority to make decisions for you, and who inherits your belongings when you’re gone, all align with your current desires. This step ensures your final wishes are clear and can be executed easily, which helps your family avoid complicated situations after your passing. It gives you the sense of being organized and settled, with everything arranged just as you want.

Embrace Lifestyle Adjustments

Transitioning into retirement may necessitate reevaluating your day-to-day lifestyle choices to ensure they align with your financial reality and aspirations. This could mean exploring more cost-effective living arrangements, exploring downsizing options, adopting a more mindful approach to spending, or even pursuing new avenues for income that also provide personal fulfillment. Embracing these adjustments is not about compromise but about recalibrating your lifestyle to enhance the quality of your retirement years. It’s a proactive step towards sustaining your dream lifestyle, marked by joy and financial stability.

Stay Financially Informed and Flexible

Navigating retirement requires a vigilant eye on the evolving economic landscape, with a readiness to adapt your financial strategies accordingly. Engage regularly with trusted financial news sources and consider periodic consultations with your financial advisor to reassess your plan against the current economic climate. Stay or become financially literate, but avoid getting carried away by watching market news. An excellent book to read is The Psychology of Money by Morgan Housel.

Flexibility in your financial approach allows you to respond proactively to market fluctuations, tax law updates, and other changes that could influence your retirement savings. By remaining agile, you empower yourself to maintain financial security and continue enjoying your retirement years to their fullest potential.


Congrats on your retirement milestone! When you retire, there are many factors to consider, but a good objective CFP® can be a valuable guide to ease your journey and help you structure your finances to avoid costly mistakes. Their expertise will provide you with the support and reassurance you need. If you have questions or are looking for guidance on your retirement journey, please feel free to contact me.