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5 Tips for Choosing Your Retirement Date

Published on: January 30th, 2023


Deciding when to retire can feel like a Herculean task. Do you retire on your 65th birthday? Beginning of the year? End of the year? Consider these five things when choosing your retirement date.

Step back gradually

Many people find the transition from working life to retired life stressful – and with good reason! Giving up your daily routines can take a toll on your mental health. If you struggle with not having a daily routine, it might be worth it to retire gradually. Consider reducing your work hours over a period of weeks or months before retiring cold turkey. This lets you create new routines outside of work that you can continue into retirement, making the transition less daunting.

Beginning or end of the year

Arguments for retiring at the beginning or end of the tax year largely centre on how it will affect your bill from Canada Revenue Agency. If you have a bonus coming at the end of your employment or if you will be drawing on your retirement income immediately, it might be a good idea to retire at the very beginning or end of the tax year so you’re not drawing on your retirement funds in a year where you are in a higher income tax bracket with your earned income. If possible, you can wait to draw on those funds when you are in a lower tax bracket.

Anniversary of your start date

If your company offers a defined benefit pension, it might be worth it to schedule your retirement date for one day after the anniversary of your start date. That gives you credit for your last full year worked toward your pension and doesn’t leave any credits on the table. Check with your employer to see how your retirement date will affect your pension contributions.

Extended Summer Vacation

Going back to the idea of a gradual transition to retired life, perhaps scheduling your retirement for the spring or summer would be beneficial to you so that the transition feels like an extended summer vacation. We all enjoy our summer vacations, and can you imagine how great it would feel to not have the back-to-work blues? It might just be the best way to trick your brain into a less stressful transition.

RRIF withdrawals

Retire with your spouse?

There are arguments to be made on both sides of whether you and your spouse should retire together. Many of them come down to financial issues, but transition from your own routine and work life to being with your partner 24/7 can also be a difficult adjustment. You and your spouse may have to put in some extra work in these transition years, but it can be a wonderful, joyful time if you do.

The bottom line

What retirement date is right for you is such a personal and unique experience that we cannot offer one-size fits all advice. Your Assante advisor can look at the big picture and, together, you can make sure you retire at the right time, financially and emotionally, and have all the tools you need to live your best retired life.

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