Aug. 3: BEST OF THE BLOGOSPHERE

August 3, 2026

Avoid an “early retirement nightmare” with these steps: Dale Jackson

Writing for BNN Bloomberg, Dale Jackson reports that early retirement can either be a dream, or a nightmare.

He offers up, in his insightful article, some ideas designed to help shift your early retirement towards “dream” and away from “nightmare.”

He begins by noting that while Canadians are generally working longer, “it’s an ironic twist that nearly half are involuntarily forced into retirement due to job loss, health issues or the need to care for someone else.”

When the unexpected happens, he continues, the help of a financial advisor is often of great assistance. “Even if your advisor only manages a portion of your big financial picture, they probably have other clients in the same situation and could present options you never considered,” he remarks.

With an advisor’s help or on your own it is essential to have a handle on what your day-to-day expenses are, Jackson writes. If your retirement income falls short of covering those expenses, “the growing trend toward part-time work, or the establishment of a small business can possibly supplement those expenses,” he points out.

Managing debt in retirement can also be a challenge, the article notes.

“If you have debt, talk to your bank about consolidating high interest debt (such as credit card balances) into one manageable low-interest loan payment plan. For most Canadian homeowners a home equity line of credit (HELOC) provides the lowest rates because the property is secured as collateral. Reverse mortgages are also an option for homeowners but normally charge much higher interest rates,” he writes.

If you have a pension plan through work, know your options. Defined benefit plans can often be deferred and collected at a future date. With defined contribution plans, you usually can keep your savings invested via your employer’s administration (to collect later) or can transfer it to another registered retirement savings plan (RRSP). In either case, find out what your options are, Jackson stresses.

It’s also important to fully understand the tax consequences of withdrawing money from RRSPs. “Income splitting with a spouse is a great strategy but is limited for Canadians under 65 years. In any case, it is best to withdraw from your RRSP at the lowest possible marginal tax rate and top up any additional funds required through a Tax-Free Savings Account (TFSA),” Jackson reports.

He also advises those of us going through an earlier-than-planned retirement to not “panic, and sell potentially lucrative or income-generating investments, or become too conservative.”

That’s because “you still need your savings to grow in equities during retirement and resorting exclusively to fixed income probably won’t get you to your goals. You will, however, need to keep a portion of your portfolio in cash, or near cash, to meet short-term living expenses,” he explains.

Finally, an earlier than expected retirement party may mean you want to draw your Canada Pension Plan (CPP) at age 60, the earliest date you can access it, Jackson writes. Old Age Security starts – at the earliest – at age 65.

Dealing with multiple small RRSPs in retirement can be a hassle, particularly when you are converting RRSP savings into income via a registered retirement income fund (RRIF) or an annuity. Members of the Saskatchewan Pension Plan can choose to transfer any amount from RRSPs they may have into SPP to consolidate your retirement nest egg.

Check out SPP today!

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