Planning for Retirement in Quebec
Apr 14 2023

Planning For Retirement in Quebec

Retirement is a significant milestone that brings both excitement and uncertainty.

Navigating the complexities of planning for retirement in Quebec can be overwhelming.

This comprehensive guide will shed light on the pertinent questions you should ask, as well as vital elements to consider, ensuring you’re well-prepared for this crucial phase of life.

Introduction to Planning for Retirement in Quebec

As you look forward to this next phase of your life, it’s crucial to ponder essential questions and evaluate the factors that will influence your financial stability during retirement.

This article aims at providing you with a comprehensive understanding of how to effectively planning for retirement in Quebec.

  • How to estimate the amount you need for a comfortable retirement in Quebec
  • The importance of proactive and informed retirement planning
  • How to address concerns and questions related to retirement savings and income


Don’t Leave Your Future To Chance. Create It!

Part 1. Retirement Savings -Factors To Contemplate

Retirement Goals and Lifestyle

When planning for retirement in Quebec, your desired lifestyle and goals are crucial determinants of the amount of savings required.

Understand the standard of living you wish to maintain and we will create a strategy to reach your goals.

Are you hoping to travel extensively, or are you looking forward to quiet days in the countryside? Your lifestyle choices significantly impact your retirement savings plan.

Assessing Duration of Savings

Another important aspect to contemplate is the potential length of your retirement. 

You should be taking into account factors such as:

  • current age,
  • health condition,
  • family history of longevity.

This will help you estimate how long your retirement savings should last.

Addressing Financial Obligation and Debts

Consider your existing financial obligations and debts when planning for retirement.

If you’ve debt, you may want to focus on clearing it before retirement, as it can significantly reduce your disposable income during this period.

Consider the Inflation Impact on Your Retirement Savings

Remember the inflation factor, when estimating your retirement savings. Inflation can significantly erode your purchasing power over time.

Part 2. Retirement Expenses - An Estimate When Planning for Retirement in Quebec

Determining Monthly Spending and Budgeting

Next, you need to estimate your retirement expenses.

This involves a detailed review of your monthly spending and budgeting.

Retirees may face higher costs for various aspects such as car insurance, household help, and healthcare expenses. Accounting for these additional expenses ensures a more accurate estimation of your retirement needs.

Another key expense is housing expenses. This is a significant aspect of retirement planning. According to the CMHC’s Senior Housing Report, the average rent for standard spaces in Quebec retirement homes was $1,922 in 2021.

Identifying Other Expenses and Goals

Apart from routine expenses, it’s essential to consider other potential costs or financial goals during retirement.

For example, you might plan to invest in a vacation home or pursue a hobby that requires funding. Or perhaps you’d like to engage in philanthropy. While these extra expenses can bring immense joy and fulfillment, they should be factored into your retirement planning to ensure that you have sufficient financial resources to support these aspirations.

Part 3. Debt Management in Retirement

Debt's Impact on Retirement Income

The presence of debt during retirement can substantially hamper your income, as a portion of it will be directed toward repayments.

Thus, it’s advisable to enter retirement with minimal to no debt.

Start preparing by accounting for your existing financial obligations and debts. Because, an unchecked pile of debts can seriously deplete your retirement savings. You can start by extinguish high-interest debts and gradually chip away at your remaining liabilities.

Eliminating debt before retirement provides financial freedom and reduces stress, enabling you to fully enjoy your retirement years.

Consider seeking professional guidance to understand effective debt elimination strategies.


Don’t Leave Your Future To Chance. Create It!

Part 4. Sources of Retirement Income

Establishing effective saving and investing practices is essential for preparing your retirement income. Disciplined saving, smart investing, and considering tax implications can help your retirement income grow substantially.

Retirement saving isn’t a one-size-fits-all approach.

Despite the availability of various strategies to help you save for retirement, stashing bundles of cash under your mattress is not the most efficient approach. 

Let’s explore a few viable alternatives to safeguard your financial future.

Tax-Free Savings Accounts (TFSA):

Tax-Free Savings Accounts are uniquely designed to allow Quebecers to save and invest money while enjoying the benefits of tax-exempt growth on interest, dividends, or capital gains within the account.

You invest funds into a TFSA, diversifying across a medley of options such as cash, Guaranteed Investment Certificates (GICs), stocks, bonds, or mutual funds. The rate of return on TFSAs fluctuates typically between 0.5% and 5%. Any withdrawals you make from this personal savings account in your retirement are entirely tax-free. Consequently, TFSAs emerge as a potent supplement to your retirement income.

To embark on this journey toward tax-free savings reach out to your financial advisor. He’ll guide you through the process of registering your TFSA.

Registered Retirement Savings Plan (RRSP):

RRSP is another popular option for savings as a retirement income.
Contributions made to an RRSP are tax-deductible, reducing the amount of income tax owed for that year. The funds within RRSP grow tax-free until withdrawal. The average rate of return for RRSPs is around 3% to 6%.
There are certain rules set by the government that ordain contribution limits for RRSPs. These limits are thoughtfully devised around a percentage of your income. Any unused contributions from previous years don’t vanish; they are carried-forward.
Above all, RRSPs offer flexibility.
For those sharing the retirement journey with a partner, the Spousal or Common-Law RRSPs allow for a more equitable distribution of income They allow for income distribution between partners, making tax time a bit friendlier.
For those who are alone, self-directed RRSPs provide more control over investment choices.

Every financial decision calls for professional guidance.

Don’t hesitate to reach out to us before maximizing your RRSP. It’s a journey to financial security, and you’d want to ensure you’re on the right path.

Government Pension Plan: OAS and QPP

The Old Age Security (OAS) and Quebec Pension Plan (QPP) are often seen as the cornerstone of retirement income in Canada and Quebec. They are a government-administered social insurance program. It’s similar to a nationwide safety net, catching eligible Canadians and ensuring they have a basic level of income in their golden years.

The QPP pool is filled with contributions from multiple sources – employees, employers, self-employed individuals, and the fruits of investment income. It’s a collective effort that offers collective benefits.

The payout from the OAS and QPP isn’t a standard one-size-fits-all amount.

Instead, it carefully considers factors like:

  • the number of working years you accumulate in Canada
  • your contributions made over your working years,
  • your average earnings, and
  • the age at which you decide to start dipping into these benefits. 

But remember, the OAS and QPP aren’t meant to be the entirety of your retirement income. Consider it as a helpful partner in your journey to financial security, assisting other savings and investments to ensure a comfortable retirement.

Workplace Pension:

Workplace pensions are an integral part of the employment benefits package provided by a multitude of employers.

These pension schemes function as a vessel to collect funds for your retirement, with a good portion of it is added by the employer on behalf of the employee.

Workplace pensions come in two primary forms:

  1. Defined benefit plans.

    These promise a predetermined payout which depends on the salary earned and the duration of service.

  2. Defined contribution plans.
    These involve the employee setting aside a certain fraction of their income, often coupled with the employer matching the contribution in part or fully.

Having a good understanding of your workplace pension’s stipulations and advantages is key to optimizing your retirement savings.

It is a potent tool that can secure your financial stability during your golden years.

Life Insurance:

Life insurance plays an unacknowledged, yet vital role in a well-rounded retirement plan, on top of its traditional function of safeguarding your loved ones’ future.

In certain life insurance policies, like permanent life insurance, beneficiaries receive a death benefit, while policyholders can also accumulate a cash value.

After a few years of accumulation, you can tap into it to supplement  your retirement. It can also act as a financial safety net in unexpected situations.

You can also use life insurance as a strategic tool for estate planning. It allows for seamless wealth transfer to beneficiaries.

This can be useful for those with significant assets, such as business owners or farmers, as it can reduce the burden of estate taxes.

It is useful for seniors to comprehend the nuances of life insurance. This can pave the way for better financial security.

At Financially Secure, we can help you integrate life insurance into your retirement savings plan. Reach out to us for a thorough discussion of your financial project. We will delve into the ways life insurance can align with your retirement objectives.


Don’t Leave Your Future To Chance. Create It!

Part 5. Average Retirement Income

Use ARI As A Hint In Estimating Your Saving Goal

The Average Retirement Income in Quebec can help you map out your retirement journey. It helps create a tangible savings goal. Also, it can offers a sense of reassurance about your future financial stability.

In 2019, Statistics Canada unveiled that senior couples over the age of 65 in Canada had an average household expenditure of $48,453 per year. This average can serve as an indication towards the sum you need to accumulate for a comfortable retirement. However, it is essential to acknowledge that this figure represents an average, susceptible to fluctuation based on a many variables:

  • geographic location,
  • living arrangements,
  • health-related expenses,
  • the impact of inflation, and
  • other unique personal circumstances 

A survey conducted by the Canadian Imperial Bank of Commerce (CIBC) found that the average Canadian estimates needing a personal nest egg of around $756,000 for a worry-free retirement. This number falls within the widely accepted range of $800,000 to $1,000,000 that financial experts often suggest as a target for a financially secure retirement. Yet, you should remember that these are an estimation only, not unanimous solutions.

Again, everyone’s retirement journey is personal and unique. Therefore, it’s crucial to contact an experience financial advisor who will carefully consider your lifestyle expectations, future plans, and financial situation, to shape your own ideal retirement income.

The Shifting Perception of Retirement Savings

The perception of how much is needed to retire comfortably has undergone a shift in recent years.

According to a BMO survey, Canadians now believe they need $1.7 million in savings to retire, reflecting a significant 20% increase from 2020.

However, financial experts caution against fixating on reaching a specific monetary goal. The idea of needing a “magic dollar” to retire comfortably has evolved, with a greater emphasis placed on personalized financial planning.

Part 6. Approach for Higher-Income Earners when planning for retirement in Quebec

It is widely accepted individuals will need roughly 70% of their pre-retirement income to maintain their current lifestyle once they retire. Despite its popularity, this rule may not always align with the needs of higher-income earners who might need a tailor made approach.

When you’re used to a higher income, your lifestyle and spending habits are likely reflective of that. Luxury experiences or discretionary spending, such as travel, gourmet dining, or high-cost hobbies, might be an integral parts of your retired life.

If you plan to keep your current fixed costs such as expensive property taxes, pricey insurance premiums, or other expenses associated with an elevated lifestyle, then 70% of your current income may not suffice.

Also, retirement ambitions, such as global travel, expensive hobbies, or grandchildren’s education can influence your retirement income requirements. You will need to plan for more financial resources.

Again, retirement planning is a personalized solution, not a universal formula. This is particularly true  for higher-income earners. You need a comprehensive review of current lifestyle and future aspirations to accurately estimate your specific retirement income needs.

Part 7. Planning for Retirement


Bottom line, retirement planning is less of a direct route and more of a winding journey full of complex decisions and diverging paths. This process calls for a deep understanding of your retirement goals and income sources and obligations. 

Planning for retirement in Quebec isn’t solely about financial preparedness; it’s equally about fostering a sense of calm. The unparalleled peace that comes with the assurance of financial stability in your golden years is priceless.

Picking the appropriate retirement saving strategies is key to achieving the retirement you envision.

An experienced financial advisor can serve as your guide in this complex journey.

Embarking on this journey early can have a striking impact on your retirement savings. The power of compounding can make a huge difference on your retirement funds, if leveraged over a significant period.

And importantly, it’s never too late to take control of your future financial health. Whether you are retiring soon or you’re just starting out on your career, making proactive strides toward retirement planning today can secure a comfortable and stress-free retirement tomorrow.

Planning for retirement in Quebec isn’t much about financial preparedness, as it is about fostering a sense of security. The unparalleled peace that comes with the assurance of financial stability in your golden years is priceless.

We can help you create a system that integrates life insurance into your overall retirement savings strategy. Feel free to connect with us to discuss your long-term financial plan and explore how life insurance can contribute to your retirement goals.


Don’t Leave Your Future To Chance. Create It!

Liliana Danila Financial Security Advisor in Montreal

She is specialized in designing and implementing retirement strategies that prioritize your financial security. The Insured Retirement Program is just one of the strategies that she offers to help you achieve your retirement income goals. As an experienced professional, she is ready to guide you through the process, tailor a plan to your unique needs, and ensure you a comfortable retirement.

Contact her today to schedule a consultation and take the first step toward a secure and fulfilling retirement.

Financiallysecure’s content is meant for general informational purposes only and should not be considered financial, tax or legal  advice.