Your First Year of Retirement: A Financial Checklist for Ontario

You have worked for decades. You have saved. You have planned. And now it is actually happening — you are retired, or you are about to be. Congratulations.

But here is what I tell every client who sits across from me in London, Ontario after they have officially left the workforce: retirement is not the finish line. It is the start of a new financial chapter, and the decisions you make in the first 12 months matter more than you might expect. Get your income streams set up correctly, adjust your portfolio, update your insurance and estate documents, and file your first tax return properly — and you set yourself up for decades of financial security.

Miss a deadline or overlook a detail, and you could leave thousands of dollars on the table.

This is the checklist I work through with newly retired clients. It is organized roughly by quarter so you can pace yourself, but the most important thing is that nothing gets missed.

Before Your Last Day: The Pre-Retirement Wrap-Up

If you have not retired yet, there are a few things to handle while you still have access to your employer and your workplace benefits.

Understand your pension options. If you have a defined-benefit or defined-contribution pension, you will need to decide how to take the payout. Lump sum or annuity? Bridge benefit or no bridge? Survivor benefit at 60 percent or 75 percent? These decisions are permanent. Do not sign anything until you have run the numbers with an independent financial advisor who is not affiliated with your employer.

Use up your health and dental benefits. Get that dental cleaning, fill those prescriptions, order new glasses. Your group coverage typically ends on your last day of employment or at the end of the month you leave.

Ask about retiree benefits. Some employers offer extended health coverage for retirees, sometimes at a subsidized rate. Find out if this is available and what it covers before your last day.

Get copies of everything. Your final pay stub, T4, pension statement, group RRSP or DPSP statements, and any documentation related to severance or retiring allowances. You will need these for tax time.

Quarter 1: The First Three Months (Setting the Foundation)

Apply for CPP

If you are 60 or older and have decided it is the right time to start your Canada Pension Plan, apply through Service Canada or online at My Service Canada Account. Processing takes about 6 to 12 weeks, so apply early. Your first payment will arrive the month after your benefit start date.

But here is the question that matters more than the application itself: should you start CPP now? Every year you delay past 60 increases your monthly payment by 8.4 percent per year, and every year you delay past 65 increases it by another 8.4 percent, up to age 70. That is a 42 percent permanent increase if you wait from 65 to 70. For many Ontario retirees, the math strongly favours waiting. I walk through the full analysis in our CPP timing guide.

The right answer depends on your health, your other income sources, your tax situation, and whether you need the cash flow immediately. This is one of the biggest financial decisions of your retirement, so take it seriously.

Apply for OAS (If You Are 65 or Approaching 65)

Old Age Security is available at age 65 and provides a maximum of roughly $727 per month in 2026. Many Canadians are automatically enrolled, but not everyone is. Check your My Service Canada Account to confirm. If you need to apply manually, do it six months before you turn 65.

You can also defer OAS up to age 70, which increases your payment by 0.6 percent per month (7.2 percent per year). Deferral makes sense if your income between 65 and 70 would trigger the OAS clawback. The clawback starts at approximately $90,997 of net income and eliminates your OAS entirely at around $148,065.

If you are drawing significant RRIF income or have other taxable income pushing you above the clawback threshold, deferral or income restructuring may save you thousands. Our OAS optimization guide covers the strategies in detail, and the retirement income plan guide shows how OAS fits into your overall withdrawal strategy.

Set Up Your Retirement Income Stream

This is where the rubber meets the road. You need to replace your paycheque with a reliable income stream from your own savings. The question is not just how much to withdraw, but from which accounts, and in what order.

The general framework I use with clients:

Start with government benefits (CPP, OAS, any employer pension). These form your base income.
Fill the gap from personal savings. The difference between what you need to spend and what your government benefits provide comes from your RRSP/RRIF, TFSA, and non-registered accounts.
Optimize the withdrawal order. Drawing from the wrong account at the wrong time can cost you tens of thousands in unnecessary taxes over a 20 to 30 year retirement.

For most Ontario retirees, the optimal strategy involves drawing down RRSPs in lower-income years (especially before OAS starts at 65), preserving TFSA room for tax-free withdrawals when you need flexibility, and being strategic about when you trigger capital gains in non-registered accounts. I cover the RRSP side of this in our RRSP meltdown strategy guide, and the TFSA side in our TFSA withdrawal strategy guide.

Set up regular monthly or quarterly transfers from your investment accounts to your bank account. This creates a predictable cash flow that replaces the paycheque you are used to receiving.

Establish Your Retirement Budget

Your spending patterns will change in retirement, and usually not in the way people expect. Many retirees spend more in the first five to ten years than they anticipated because they are healthy, active, and finally have time to travel and enjoy hobbies. Spending tends to decrease in the later years, then can spike again if long-term care is needed.

Sit down and build a realistic budget that reflects your actual retirement lifestyle, not some arbitrary rule of thumb. Include everything: housing costs, property taxes, insurance premiums, groceries, transportation, travel, gifts, health costs not covered by OHIP, and a buffer for the unexpected.

Track your spending for the first few months. You will learn quickly whether your withdrawal rate is sustainable.

Quarter 2: Months 4 Through 6 (Insurance and Protection)

Drop Disability Insurance

If you were carrying individual disability insurance, you no longer need it. Disability insurance replaces earned income, and you no longer have earned income to protect. Cancel the policy and redirect the premium savings into your retirement cash flow.

Review Your Life Insurance

This is one of the most important insurance reviews you will ever do. Your life insurance needs have likely changed dramatically. Ask yourself:

Is the mortgage paid off?
Are your children financially independent?
Does your spouse have enough retirement income on their own if you passed away?
What would the tax bill be on your estate at death?

If your mortgage is paid off and your kids are on their own, you may not need the term life insurance you have been carrying for 20 years. Dropping a $1,000,000 term policy could save you $200 to $400 per month at this stage of life.

On the other hand, if your estate will face a significant tax bill on death — from RRSP/RRIF balances, capital gains on property, or corporate retained earnings — permanent life insurance may still have a role. Our life insurance guide walks through how to evaluate what you actually need.

Set Up Private Health Insurance

In Ontario, OHIP covers physician visits and hospital stays. It does not cover prescription drugs (unless you qualify for the Ontario Drug Benefit at age 65 or the Trillium Drug Program), dental care, physiotherapy, vision care, paramedical services, or private hospital rooms.

If you are under 65 and no longer have employer benefits, you are in a coverage gap. Look into individual health insurance plans from providers like Blue Cross, Manulife, or Sun Life. The premiums are not cheap — expect $200 to $400 per month per person depending on age and coverage level — but one unexpected health event can be far more expensive.

Once you turn 65, you qualify for the Ontario Drug Benefit program, which covers most prescription medications with a modest co-pay. But you still have no dental, vision, or paramedical coverage unless you buy it privately.

If you plan to travel, get a standalone travel medical insurance policy. OHIP coverage outside Canada is essentially zero. Do not rely on your credit card travel insurance without reading the fine print carefully.

Quarter 3: Months 7 Through 9 (Estate, Investments, and Legal)

Update Your Estate Documents

Retirement is a natural trigger to review your estate plan. If you have not updated your will, powers of attorney, and beneficiary designations in the past few years, do it now. Here is what to check:

Will: Does it reflect your current wishes? Have your assets or family circumstances changed? Is the executor you named still willing and able to serve?
Power of Attorney for Property: Who will manage your finances if you become incapable? This is separate from your will and takes effect while you are alive.
Power of Attorney for Personal Care: Who will make health care decisions for you if you cannot make them yourself?
Beneficiary designations: Check every RRSP, RRIF, TFSA, and life insurance policy. Beneficiary designations override your will in Ontario, so if they are out of date, your assets may not go where you intend. A common example: someone who divorced and remarried but never updated the RRSP beneficiary from their first spouse.

Our estate planning guide for Ontario families covers the full process.

Consider Downsizing

If you are rattling around in a home that is larger than you need, the first year of retirement is a natural time to evaluate whether downsizing could free up capital and lower your carrying costs. The financial impact can be substantial, but so are the transaction costs and lifestyle considerations.

Adjust Your Investment Portfolio

Your portfolio likely needs to shift now that you are drawing income from it rather than adding to it. But this does not mean dumping everything into GICs and bonds. At age 65, you may have 25 to 30 years of retirement ahead. Your portfolio still needs growth to keep pace with inflation.

What typically changes:

Increase stability for near-term needs. Keep one to three years of planned withdrawals in cash or short-term fixed income. This prevents you from being forced to sell equities during a downturn.
Maintain growth for long-term needs. The portion of your portfolio you will not touch for 10 or more years can remain invested in equities. A reasonable equity allocation for many retirees is 40 to 60 percent, depending on your risk tolerance and other income sources.
Focus on income-producing investments. Dividend-paying equities, bond ETFs, and other income-generating assets can help fund your withdrawals without having to sell holdings.
Review your fees. If you are still paying 2 percent or more in mutual fund fees, switching to a lower-cost approach before you start drawing down can add years of retirement income.

The biggest mistake I see new retirees make is either getting too conservative too early (and running out of money at 85) or staying too aggressive (and panicking during the next market correction). The right balance depends on your full financial picture.

Consider the RRIF Conversion Timeline

Your RRSP must be converted to a Registered Retirement Income Fund (RRIF) by December 31 of the year you turn 71. Once converted, you are required to withdraw a minimum amount each year based on your age.

But here is the planning opportunity: you do not have to wait until 71. If you are retired and in a lower tax bracket, it may make sense to start voluntary RRSP withdrawals or convert to a RRIF earlier. Drawing down your RRSP at a 20 percent tax rate now is far better than being forced to withdraw at a 40 percent rate later when mandatory minimums push you into a higher bracket.

This is the heart of the RRSP meltdown strategy, and it is one of the most valuable tax planning moves available to Ontario retirees.

Quarter 4: Months 10 Through 12 (Tax Planning and Year-End)

Plan for Your First Tax Return as a Retiree

Your first tax return after retirement will look different from any return you have filed before. Here is what to expect:

You may have multiple income sources. Employment income (partial year), CPP, OAS, pension income, RRSP/RRIF withdrawals, investment income, and possibly severance or retiring allowance. Each is taxed differently.
You may qualify for new credits. The pension income tax credit ($2,000 of eligible pension income taxed at zero) and the age amount (available once you turn 65, subject to income clawback) can reduce your tax bill.
Pension income splitting. If you are 65 or older and receiving eligible pension income (RRIF withdrawals, life annuity payments from a pension), you can split up to 50 percent with your spouse. This can save thousands in taxes by shifting income from the higher-earning spouse to the lower-earning spouse. You make this election on your tax return.
Installment payments. If your tax owing at the end of the year exceeds $3,000 (federal) or $1,800 (Ontario), the CRA will require you to make quarterly installment payments the following year. Many new retirees are surprised by this. Set aside funds for it.

Working with a financial advisor who understands retirement tax planning can save you far more than the cost of the advice.

Make Year-End TFSA Contributions

If you have not maximized your TFSA, do it before year-end. Every dollar in a TFSA grows and can be withdrawn completely tax-free. In retirement, TFSA withdrawals are invisible to the CRA — they do not affect your OAS clawback calculation, your GIS eligibility, or your age amount. This makes the TFSA the single most flexible retirement income tool available.

If you made TFSA withdrawals earlier in the year, remember that the contribution room is only restored on January 1 of the following year. Do not re-contribute in the same year you withdrew or you will face overcontribution penalties.

Review and Adjust Your Plan

At the end of your first year, sit down and review how things went. Ask yourself:

Did I spend more or less than I budgeted?
Is my withdrawal rate sustainable for 25 to 30 years?
Did my investment portfolio perform as expected?
Are my income sources set up correctly?
Did I encounter any tax surprises?
Are there government benefits I am not receiving that I should be?

This annual review is something I do with every client. It is not a one-time event. Retirement planning is ongoing, and the plan should evolve as your life, the tax code, and the markets change.

The Ongoing Checklist: Every Year Going Forward

Beyond the first year, here are the items that should be on your radar annually:

Review your withdrawal strategy. Market conditions, tax brackets, and your spending needs change. Your withdrawal plan should change with them.
Check your OAS and GIS eligibility. Income changes from year to year can affect your government benefits.
Rebalance your portfolio. Bring your asset allocation back in line with your target at least once a year.
Review your estate plan. Especially after any major life event — death of a spouse, sale of property, change in family circumstances.
File your taxes on time. Late filing when you owe installments creates penalties and interest.
Revisit your insurance. As you age, your needs continue to evolve. Long-term care insurance, for example, is worth evaluating in your late 60s or early 70s before health conditions make it unavailable.

You Do Not Have to Figure This Out Alone

Retirement is the most complex financial transition most people go through. You are juggling CPP timing, OAS optimization, RRSP drawdowns, tax brackets, insurance decisions, estate documents, and investment strategy — all at once, and all with permanent consequences.

This is exactly the kind of work I do with clients at Calm Money. If you are in your first year of retirement, or about to be, I would be glad to sit down and make sure nothing falls through the cracks. You can learn more about how I work on my retirement planning page or take a look at the full retirement planning checklist I use with clients.

If you are ready to talk, reach out and we will get your retirement off to the right start.