Assess your financial situation

3.1 Build your retirement balance sheet

• ☐ List each account, owner, balance, beneficiary, tax status, fees, and access instructions.
• ☐ List each debt, interest rate, payment, maturity, security, and whether another person is

• ☐ Estimate current spending from at least 12 months of bank and credit-card history.
• ☐ Identify irregular costs: property tax, insurance, repairs, dental work, travel, family support, and vehicle replacement.

3.2 Estimate retirement income and income-tested benefits

See §7.1 — involuntary-separation election when a spouse enters care.

Withdrawals are taxable. An RRSP must be matured (e.g., converted to a RRIF or Should some withdrawals RRSP/RRIF annuity) by the end of the occur before mandatory year you turn 71; mandatory RRIF years? RRIF minimum withdrawals then begin the following year (age 72).

3.3 RRSP contribution-side mechanics

RRSP planning is not only about withdrawals. Contribution room is generally created from prior-year earned income, subject to the annual dollar ceiling and adjustments. Unused deduction room can carry forward. A workplace pension normally creates a pension adjustment that reduces the following year's new RRSP room; past-service or plan changes can also create

pension adjustments or reversals.

Item What to check

Use the latest CRA Notice of Assessment or Deduction limit My Account rather than estimating from salary alone.

A contribution can sometimes be made now Contribution vs. deduction and deducted in a later year, but overcontribution rules still apply.

Unused deduction room generally carries Carryforward room forward; confirm the exact balance before contributing.

Pension adjustment Employer pension participation can materially reduce new RRSP room.

The contributor uses their own room, while Spousal RRSP the account belongs to the spouse; attribution rules can apply to near-term withdrawals.

A limited cushion may exist, but excess Overcontribution risk contributions can attract monthly tax and filing obligations.

3.4 Know your tax and benefit sensitivity

Concept Why it matters

Marginal tax rate Shows the tax cost of the next dollar of taxable income.

Net income Used for OAS recovery tax and many credits and benefits.

RRSP/RRIF withdrawals, employment, GIS/GAINS income test interest, dividends, and gains may reduce benefits.

Includes the Ontario Energy and Property Tax Credit, Northern Ontario Energy Credit Ontario Trillium Benefit where applicable, and Ontario Sales Tax Credit; filing a return and completing required forms matters.

Dividend gross-up Can increase net income beyond cash received and affect benefits.

Only the taxable portion enters income, but Capital gains gains may still affect benefits and tax brackets.

Eligibility, supporting documents, and who Medical and disability-related credits claims an amount can materially affect household tax.

3.5 Insurance and risk audit before leaving work

Employer coverage may end, shrink, or become expensive at retirement. Obtain written details

before the retirement date, including conversion deadlines and exclusions.

Coverage Questions to ask

Is income replacement still needed? Is there Life insurance estate liquidity, debt, tax, or dependent-support exposure? Can group coverage be converted without medical evidence?

Does coverage stop when employment Disability insurance ends? Is there a residual benefit if hours are reduced before retirement?

Would a lump sum help with renovations, Critical illness private care, travel, or a spouse leaving work? Review definitions and expiry age.

What do retiree plans cover, what are Health and dental annual/lifetime caps, and how do they coordinate with CDCP or provincial programs?

What stability period applies to pre-existing Travel medical conditions? Must medication, symptoms, tests, or treatment changes be reported?

Is insurance available or affordable, or should Long-term care the plan self-fund through assets, home equity, and a care reserve?

3.6 Asset location: which investments to hold in which accounts

Asset allocation decides how much you hold in each asset class; asset location decides which account each holding sits in so the household pays less tax over time. Because RRSP/RRIF, TFSA, and non-registered accounts are taxed differently, the same portfolio can produce very

different after-tax results depending on placement. General principles:

Investment type Generally most tax- Why efficient location

Interest is fully taxed at your Interest-bearing (GICs, RRSP/RRIF (tax-deferred) marginal rate in a non-bonds, HISA) registered account; sheltering it defers that tax.

Certain foreign withholding taxes are reduced or Foreign (e.g., U.S.) dividend- RRSP/RRIF for U.S. equities recoverable in an paying equities RRSP/RRIF under tax-treaty rules; in a TFSA that withholding is generally lost.

• Location interacts with the withdrawal-order and decumulation decisions in §5.4 (withdrawal order), §5.9 (decumulation), §5.10 (smoothing) — don't optimize one in isolation.
• Holding interest-heavy assets in a taxable account while growth sits in an RRSP is often the least efficient arrangement.