The Real Cost of Retirement in Canada: Is $5,000/Month Enough?

A common rule of thumb is that you need 70% of your pre-retirement income to maintain your standard of living. But rules of thumb don't pay the bills. Let's look at the real numbers for 2026.

The Three Stages of Retirement Spending

Retirement spending isn't a flat line; it's often described as a "smile" curve:

1. The Go-Go Years (65-75): Spending is high. You are traveling, renovating, and enjoying hobbies. Costs here often match or exceed working-life spending.
2. The Slow-Go Years (75-85): Spending drops. You travel less and stay home more. This is the bottom of the "smile" curve.
3. The No-Go Years (85+): Spending rises again, driven primarily by health care and assisted living costs.

The Inflation Factor

If you retire at 65, your money needs to last potentially 30 years. Even modest inflation of 2-3% will cut your purchasing power in half over that time.

This is why indexing is crucial. CPP and OAS are indexed to inflation, which provides a safety net. However, most private investments and some workplace pensions are not fully indexed.

Running Your Numbers

Don't guess. Use a calculator to project your fixed income sources first (CPP, OAS, DB Pensions). Then, determine the gap that your savings need to fill.