Shannon works full-time in a public sector role that offers benefits and a small pension, and her husband earns a decent living from his job. But thanks to Canada’s high cost of living and a recent string of unexpected expenses, the couple struggles to make ends meet—let alone save for retirement. “We have good educations and somewhat good jobs,” she says. “But at the end of the month, there’s not much left over.”
Canadians today are living longer than previous generations, and not everyone has the financial means to support themselves throughout retirement. According to the latest data from Statistics Canada, 6% of Canadian seniors lived below the poverty line in 2022. And at present, nearly 8% of food bank clients are seniors.
Between inflation, economic uncertainty and other factors, it’s reasonable to expect these numbers to rise rather than fall in the years ahead. These challenges have created instability for many seniors in Canada, as well as their adult children, who may feel obligated to step in and give financial support.
Planning ahead, saving and investing are critical to a successful retirement, but what if your opportunity to build a nest egg has passed? Many Canadians aren’t able to save enough to live comfortably in their older years. And those who do may run out of money for another reason: a flawed financial plan or money mistake, a serious illness, an expensive divorce, a tendency to overspend, or simply living longer than expected.
So, while it’s true that some Canadian seniors actually underspend in retirement—out of fear of not having enough or because it’s hard to break old financial habits—others don’t have sufficient savings or run out of money over time. For Canadians in the latter camp, these financial strategies can help keep you afloat.
File your taxes
One of the first things seniors should do is file their taxes accurately and on time, says Jackie Porter, a certified financial planner (CFP) in Toronto. “If you’re a low-income earner who isn’t filing their taxes, you’re missing out on all sorts of benefits. It’s one of the worst things you can do financially.”
In addition to the Canada Pension Plan (CPP) and Old Age Security (OAS) pensions, there’s the Guaranteed Income Supplement (GIS), which provides monthly payments to low-income seniors. If you file your taxes on time, you’ll be automatically enrolled for the GIS starting at age 65, and receive tax-free payments on a monthly basis. (Cheryl is too young to be eligible for the GIS, but she should qualify in a few years.) If you believe you should be receiving the GIS, you can apply online.
Seniors should also take advantage of the tax deductions specific to their age group and income level, such as the age amount tax credit. You may even qualify for support from a free tax preparation clinic in your region.
