How Much Do You Need to Retire in London, Ontario? A Complete Guide

The Big Question Every London, Ontario Family Asks

If you live in London, Ontario and you are thinking about retirement, one question keeps coming back: how much money do I actually need? The answer depends on your lifestyle, your health, your housing situation, and how well you have planned your government benefits and personal savings. In this guide, we will break down the real numbers for retiring in London, Ontario so you can build a plan that works.

As a financial planner in London, Ontario, I help families answer this question every week. The truth is, there is no single magic number. But there is a clear process for finding yours.

Understanding London, Ontario's Cost of Living

London offers a significantly lower cost of living compared to Toronto or Vancouver, which is one of the reasons it is such an attractive place to retire. However, costs are still rising, and you need to plan accordingly.

Here is a rough breakdown of typical annual expenses for a retired couple in London, Ontario in 2026:

Housing (property taxes, insurance, maintenance): $12,000 to $24,000 if your mortgage is paid off. If you are renting, expect $18,000 to $28,000 per year.
Food and groceries: $8,000 to $12,000
Transportation (car ownership, insurance, gas): $6,000 to $10,000
Healthcare (dental, vision, prescriptions, supplemental insurance): $4,000 to $8,000
Utilities (hydro, gas, water, internet, phone): $4,000 to $6,000
Entertainment and travel: $4,000 to $15,000
Clothing and personal: $2,000 to $4,000

That puts a basic comfortable retirement in London, Ontario somewhere between $40,000 and $95,000 per year for a couple, depending on lifestyle. A modest retirement might require less, while an active retirement with regular travel could require more.

How London Compares to Other Ontario Cities

One of the biggest advantages of retiring in London, Ontario is the lower housing cost. A couple that owns a detached home in London might pay $3,500 to $5,000 per year in property taxes, compared to $6,000 to $8,000 or more in Toronto for a comparable property. Grocery costs, dining out, and entertainment are also typically 10 to 20 percent lower than in the Greater Toronto Area. This savings compounds over a 25- to 30-year retirement and means London residents may need a smaller nest egg than their Toronto or Ottawa counterparts.

That said, London is not immune to inflation. Property taxes, utility costs, and insurance premiums have all been rising steadily. Your retirement plan needs to account for costs increasing by at least 2 to 3 percent per year, and potentially faster for healthcare-related expenses.

Government Benefits: CPP and OAS

Before you worry about those numbers, remember that the Canadian government provides two key income sources in retirement.

Canada Pension Plan (CPP)

The maximum CPP retirement pension at age 65 in 2026 is approximately $1,364 per month ($16,368 per year). However, the average CPP payment is closer to $830 per month ($9,960 per year). Your actual amount depends on how long you contributed and how much you earned during your working years.

If you take CPP at 60, your payments are reduced by 36 percent. If you delay to age 70, they increase by 42 percent. For many London, Ontario retirees, delaying CPP can significantly boost lifetime income, especially if you are healthy and have other income sources to bridge the gap. Read our guide on when to take CPP for a detailed breakdown.

Old Age Security (OAS)

OAS is available to most Canadians at age 65, regardless of work history. The maximum OAS payment in 2026 is approximately $727 per month ($8,724 per year). If your individual net income exceeds approximately $90,997, OAS begins to be clawed back.

For a couple both receiving full CPP and OAS, government benefits alone could provide roughly $38,000 to $50,000 per year, which covers a significant portion of a modest retirement in London, Ontario.

The Gap: What Your Savings Need to Cover

The difference between your desired retirement income and your government benefits is what your personal savings need to generate. This is often called the retirement income gap.

For example, if a couple in London, Ontario wants $70,000 per year in retirement income and expects to receive $44,000 from CPP and OAS combined, they need their savings to generate $26,000 per year.

The 4 Percent Rule and Why It Needs Ontario Context

A common rule of thumb is the 4 percent rule: you can safely withdraw 4 percent of your portfolio each year without running out of money over a 30-year retirement. Using this guideline:

To generate $26,000 per year, you would need a portfolio of approximately $650,000
To generate $40,000 per year, you would need approximately $1,000,000
To generate $55,000 per year, you would need approximately $1,375,000

However, the 4 percent rule has limitations. It does not account for Ontario-specific tax implications, the timing of your RRSP to RRIF conversion, or the impact of OAS clawbacks on your withdrawal strategy. A proper retirement plan considers all of these factors.

RRSP and TFSA Strategies for London Retirees

How you save matters just as much as how much you save. Ontario residents have two primary tax-advantaged accounts for retirement savings, and knowing when to use each one can make a major difference to your after-tax retirement income.

RRSP (Registered Retirement Savings Plan)

Contributions are tax-deductible, reducing your taxable income today. Growth is tax-deferred. Withdrawals are taxed as income in retirement. The RRSP is most powerful when you contribute during high-income years and withdraw during lower-income years in retirement.

For London, Ontario families earning $60,000 to $150,000, the RRSP often provides the biggest immediate tax benefit. But you need a withdrawal strategy that avoids pushing you into higher tax brackets or triggering OAS clawbacks. A well-timed RRSP meltdown strategy, where you withdraw gradually between retirement and age 71, can save tens of thousands of dollars in taxes over the course of your retirement.

TFSA (Tax-Free Savings Account)

Contributions are made with after-tax dollars, so there is no deduction up front. But all growth and withdrawals are completely tax-free. TFSA withdrawals do not affect your OAS eligibility or any income-tested benefits.

The TFSA is especially valuable for retirees who want tax-free income that does not affect government benefits. For many London, Ontario couples, it becomes the most valuable account in retirement because every dollar withdrawn goes directly to spending without tax consequences.

For a deeper comparison, read our RRSP vs. TFSA guide.

Pension Income and Workplace Plans

If you or your spouse have a workplace pension, this can dramatically change your retirement equation. A defined benefit pension that pays $30,000 per year in retirement reduces your savings gap by that same amount, meaning you may need several hundred thousand dollars less in personal savings.

London, Ontario has a mix of public sector workers with strong pensions (through organizations like Western University, the City of London, or the London Health Sciences Centre) and private sector workers who may have defined contribution plans or no workplace pension at all. Knowing what your pension will actually pay, and what survivor options are available, is a critical step in the planning process.

If you have a defined contribution pension or group RRSP through your employer, the value depends entirely on how much was contributed and how the investments have performed. These accounts function more like a personal savings pool than a guaranteed income stream, and they need to be incorporated into your overall withdrawal strategy.

Creating Year-by-Year Income Projections

One of the most valuable things a financial planner can do is build year-by-year retirement income projections specific to your situation. This is not a simple spreadsheet. It is a comprehensive model that accounts for:

When each income source starts (CPP, OAS, pensions, RRIF withdrawals)
Ontario and federal tax brackets each year
Inflation adjustments to spending and government benefits
RRSP to RRIF conversion timing and mandatory minimum withdrawals
OAS clawback thresholds and how to stay below them
TFSA withdrawal optimization for tax-free income
Healthcare cost increases as you age
The impact of one spouse passing before the other

When I work with London, Ontario families on retirement planning, we build this projection together so you can see exactly what your income looks like at age 60, 65, 70, 75, 80, and beyond. The projection shows not just how much income you will have, but how much tax you will pay, when your registered accounts will be drawn down, and whether your plan can handle unexpected expenses or market downturns.

Why Projections Matter More Than Rules of Thumb

Generic retirement calculators miss the details that matter most: the interaction between CPP timing and OAS clawbacks, the tax savings of early RRSP withdrawals, and the value of pension income splitting between spouses. A year-by-year projection built around your actual numbers reveals opportunities a simple calculator cannot. For most London, Ontario families, this is the single most valuable output of the planning process.

Common Retirement Planning Mistakes Ontario Families Make

Not Starting Early Enough

The power of compound growth is enormous. Starting to save at 30 versus 40 can mean the difference between a comfortable retirement and a stressful one. Even small amounts invested consistently over decades can grow into substantial wealth.

Ignoring Tax Efficiency

Many Ontario retirees withdraw from their RRSP too aggressively in early retirement, pushing themselves into higher tax brackets. A strategic RRSP meltdown strategy can save tens of thousands in taxes over your retirement. Learn more about tax planning strategies.

Underestimating Healthcare Costs

Ontario Health Insurance Plan (OHIP) covers many basics, but dental care, vision care, prescription drugs, mobility aids, and potential long-term care are not fully covered. A retired couple in London should budget at least $4,000 to $8,000 per year for out-of-pocket healthcare costs, and consider insurance solutions for catastrophic scenarios.

Not Planning for Inflation

Even at a modest 2 percent inflation rate, your purchasing power drops by 22 percent over 10 years and 40 percent over 25 years. Your retirement plan needs to account for rising costs, especially for healthcare and property taxes in London, Ontario.

Failing to Plan as a Couple

Retirement planning for couples is different from planning as an individual. Income splitting, spousal RRSPs, CPP sharing, and survivor benefit planning can all significantly impact your retirement income. Read our couples retirement planning guide.

How Much Do You Need? A Framework

Here is a simple framework to estimate your retirement savings target for London, Ontario:

Estimate your desired annual retirement income (for example, $65,000 for a couple)
Subtract expected CPP and OAS income (for example, $44,000 combined)
Calculate the gap (for example, $21,000 per year)
Multiply by 25 (the inverse of the 4 percent rule) to get your savings target (for example, $525,000)
Add a buffer of 10 to 20 percent for unexpected expenses and inflation uncertainty

This gives you a ballpark. A comprehensive financial plan will refine this number based on your specific tax situation, health, lifestyle goals, and risk tolerance.

The Bottom Line

For most London, Ontario couples aiming for a comfortable retirement, a savings target of $500,000 to $1,500,000 is realistic, depending on lifestyle and when you plan to retire. The good news is that with CPP, OAS, and smart tax planning, you may need less than you think.

The bad news is that hoping for the best is not a strategy. The earlier you start planning, the more options you have.

Ready to Find Your Number?

Every family's situation is different. Your retirement number depends on your income, savings, debts, lifestyle goals, and health. A generic calculator cannot capture all of this.

I help London, Ontario families build clear, year-by-year retirement plans that tell you exactly when you can retire and how much income you will have.

Book a free 15-minute call and let's figure out your number together.