When should I start planning for retirement?

Now. Time is the biggest variable in retirement planning. Starting at 25 instead of 35 gives your money an extra decade to compound, which can mean hundreds of thousands of dollars more from the same monthly contribution. Starting late is still far better than not starting. Most checklist items below apply at any age.

How do I know if I am on track for retirement?

Run a full projection that accounts for your actual savings, expected government benefits (CPP/OAS or Social Security), tax situation, and planned spending. Rules of thumb like 'save 10x your salary by 67' give a rough direction but miss too many variables. A projection that models taxes and withdrawal order is much clearer.

What is the most common retirement planning mistake?

Ignoring taxes. A $1 million RRSP or Traditional IRA is not $1 million of spending power. It is $1 million minus the tax owed on every withdrawal, which could be $250,000–$400,000 over a lifetime depending on province or state. Planning with pre-tax numbers overstates what you have.

Do I need a financial advisor to plan for retirement?

Not necessarily. Many people can build a solid plan themselves with a projection tool and the guides on this site. An advisor adds the most value in complex situations: large stock option grants, pension buyout decisions, cross-border tax obligations, or estate planning with multiple beneficiaries. For the core checklist below, a few hours of work and the right tools get you most of the way.

What if I am already retired? Is this checklist still useful?

Yes. The mid-priority and advanced sections cover tax planning, benefit timing, withdrawal sequencing, and estate planning, all of which still matter after you stop working. The first few years of retirement are often where the biggest tax savings are.

Retirement Planning Checklist: A Step-by-Step Guide

Retirement advice tends to be either too vague (“start saving early”) or too narrow (“max out your 401(k)”). This is a list of concrete actions, ordered by priority: what to do first, what to revisit annually, and what to tackle once the basics are in place.

It has 25+ action items for Canadians and Americans. Some apply to everyone and others are country-specific. Do the essentials first, then move to optimization.

Essentials: The Foundation

If you do nothing else, do these.

☐ Know your retirement number

Before anything else, work out how much you need, as a number. The common advice to “save 25 times your annual spending” is a starting point, but it ignores taxes, government benefits, and how your spending will change over time. A projection that models your tax situation and benefit timing is far more accurate.

See: How Much Do You Need to Save for Retirement?

☐ Open and fund the right accounts

The account types you use matter as much as how much you save. Each type has different tax treatment, and the mix determines your flexibility in retirement.

Canada:

RRSP: tax-deferred growth, deductible contributions, taxed on withdrawal
TFSA: after-tax contributions, tax-free growth, tax-free withdrawals
FHSA: if you qualify, tax-deductible contributions that grow and withdraw tax-free for a first home (converts to RRSP if unused)
Non-registered: flexible but less tax-efficient

Not sure which to prioritize? See: TFSA vs RRSP: Which Account to Use First

United States:

401(k) / 403(b): employer-sponsored, often with a match. Capture the full match before anything else.
Traditional IRA: tax-deferred, similar to an RRSP
Roth IRA: after-tax contributions, tax-free growth and withdrawals
HSA: triple tax advantage for healthcare, and the most tax-efficient account type in the US tax code
Taxable brokerage: flexible, no contribution limits

Not sure about Roth vs Traditional? See: Traditional IRA vs Roth IRA or Traditional 401(k) vs Roth 401(k)

☐ Set your savings rate and automate it

Financial planners commonly recommend saving 15–20% of gross income for retirement. But the right number depends on your age, target retirement date, and expected spending. Someone starting at 25 can save less each month than someone starting at 40 for the same outcome.

Whatever the number is, automate it. Set up automatic contributions on payday so you decide once, not every month. People who automate saving accumulate significantly more than those who transfer manually.

☐ Build an emergency fund

Before optimizing retirement accounts, make sure you have 3–6 months of essential expenses in a high-interest savings account. Without this buffer, any unexpected expense (job loss, medical bill, car repair) forces you to take on debt or withdraw from retirement accounts, often triggering penalties and taxes.

☐ Designate beneficiaries on every account

This is the item people skip most. Every registered account (RRSP, TFSA, RRIF, IRA, 401(k), Roth IRA) allows you to name a beneficiary. If you don’t, the account goes through your estate, which means probate fees, delays, and possibly a different distribution than you intended.

Review beneficiaries after any major life event: marriage, divorce, birth of a child, death of a named beneficiary.

☐ Pay off high-interest debt

Carrying credit card debt at 20% while earning 7–8% in the market is a guaranteed net loss. Pay off high-interest debt before investing extra money. Mortgage debt at 4–6% is a different calculation: investing often beats prepayment, depending on your tax bracket and account type.

Mid-Priority: Tax Optimization and Protection

Once the foundation is set, these items protect your plan and can save thousands per year.

☐ Know your marginal tax rate and plan around it

Your marginal tax rate determines the after-tax value of every retirement dollar. Contributions to an RRSP or Traditional IRA are most valuable when your marginal rate is high (working years) and withdrawals are cheapest when your marginal rate is low (early retirement, before CPP/OAS or Social Security kicks in).

This is the idea behind the RRSP meltdown strategy and Roth conversion ladder: convert or withdraw in low-income years to avoid higher taxes later.

☐ Get the right insurance in place

Life insurance: needed if anyone depends on your income. Term insurance is almost always the right choice: it’s cheap, simple, and covers the years your dependents need it. Whole and universal policies are complex and expensive; most people do better buying term and investing the difference.
Disability insurance: protects your most valuable asset, your ability to earn income. Most employer plans cover 60–70% of salary. Consider supplemental coverage if you’re self-employed or have a high income.
Long-term care (age 50+): the cost of assisted living or home care can consume an entire retirement portfolio. Insurance or a self-insurance plan (dedicated savings) is worth evaluating.

☐ Review your investment allocation

Your investment mix should evolve as you approach and enter retirement. The old rule of holding your age in bonds is too simple, but the principle holds: reduce portfolio volatility as your time horizon shortens.

Hold enough in stable assets to cover 2–5 years of withdrawals, so you’re never forced to sell stocks in a downturn. Beyond that, keep equities: a 30-year retirement needs real growth to stay ahead of inflation.

☐ Consolidate scattered accounts

Most people pick up several retirement accounts over a career, such as an old 401(k) or a forgotten RRSP. Consolidate where you can. Fewer accounts mean lower fees, easier tracking, simpler beneficiary management, and a clearer asset allocation.

In Canada, RRSP transfers between institutions are straightforward. In the US, rolling an old 401(k) into an IRA gives you broader investment options and typically lower fees. See: 401(k) Rollover to IRA Rules

☐ Create or update your estate plan

At minimum: a will, a power of attorney for finances, and a power of attorney for healthcare (called a healthcare proxy or advance directive in the US). Without these, courts decide who manages your money and medical decisions if you become incapacitated, and they may not choose who you would.

If your estate is more complex (business ownership, real property in multiple jurisdictions, blended family), work with an estate lawyer. The cost is small next to the cost of getting it wrong.

Advanced: Maximizing After-Tax Retirement Income

These strategies can add tens of thousands of dollars to your lifetime after-tax income. They take more planning.

☐ Plan your withdrawal sequence

The order in which you draw from different account types in retirement (taxable, tax-deferred, and tax-free) can save $50,000–$150,000 in lifetime taxes. Most retirees pull from whatever is easiest. A better sequence fills low tax brackets on purpose and saves tax-free accounts for when they’re most valuable. It is one of the highest-impact decisions in retirement. See: Retirement Withdrawal Order Strategy

☐ Time your government benefits

Canada: CPP can be taken anywhere from age 60 to 70. Each year of delay past 65 increases the benefit by 8.4%. OAS starts at 65 (or can be deferred to 70 for a 36% increase). The right timing depends on your health, other income, and whether early benefits would trigger the OAS clawback.

See: When to Take CPP: Age 60, 65, or 70?

United States: Social Security can be claimed from age 62 to 70. Each year of delay past your full retirement age (66–67 for most) increases the benefit by 8%. For married couples, spousal and survivor benefit coordination adds another layer of optimization.

See: Social Security Spousal and Survivor Benefits

☐ Manage tax brackets in early retirement

The years between retirement and when mandatory withdrawals or government benefits start (typically 65–72) are a useful tax-planning window. Income is often lower than it will be later, so you can:

Convert RRSP to RRIF/TFSA or Traditional IRA to Roth at low tax rates
Realize capital gains in low-income years
Draw down registered accounts before mandatory minimums force larger (and more heavily taxed) withdrawals

The window closes once CPP/OAS or Social Security begins.

☐ Coordinate with your partner

For couples, retirement planning is one joint plan with two sets of accounts, benefits, and tax returns. Income splitting (pension splitting in Canada, filing jointly in the US), staggered retirement dates, and coordinated benefit timing can produce much better outcomes than planning separately.

See: Pension Income Splitting in Canada and Savings Splitting Strategy for Couples

☐ Stress-test your plan

A single projection based on average returns shows one likely outcome. It doesn’t show what happens if the market drops 40% in your first year of retirement, or if inflation runs at 5% for a decade. Monte Carlo simulation runs thousands of scenarios and shows the probability of your plan surviving different market conditions.

See: Monte Carlo Simulation for Retirement and Historical Backtesting

☐ Revisit annually

Review your plan at least once a year and after any major life event. Check:

Are your savings on track for your target?
Has your expected retirement date changed?
Do your beneficiaries still reflect your wishes?
Has the tax code changed in ways that affect your strategy?
Is your investment allocation still appropriate for your timeline?

Run Your Own Projection

A checklist tells you what to do. A projection tells you whether it’s working.

cinder.fi’s free retirement calculator models taxes, government benefits, withdrawal sequencing, and inflation for both Canadian and American households. Enter your actual numbers and see a year-by-year projection of your retirement income, taxes, and account balances.

No account required to get started. Your data stays on your device.

May 26, 2026 · 7 min read