Older couple looking stressed <\/p>\n
Jill and Daniel, both 79, have been in retirement for over a decade, but are reassessing their financial situation now that they are inching ever so close to 80. While they have been quite diligent with their money during this time, they have begun to question if the savings they have acquired, alongside their government benefits, will be enough going forward.<\/p>\n
The average annual spending for Canadian households of those 65 years and older was $78,499 in 2023, according to Statistics Canada<\/a>. With a modest $2,000 monthly income from Canada Pension Plan (CPP) and Old Age Security (OAS) and $50,000 in savings, it\u2019s natural for them to be worried about outliving their savings and looking for some guidance.<\/p>\n The average life expectancy<\/a> for 80-year-olds in Canada is just under 8 years for men, and 10 years for women. Using this Money.ca retirement calculator<\/a>, we can see that if their savings are invested and earn an average annual rate of return of 5%, they can afford to make monthly withdrawals of $528.49 for 10 years.<\/p>\n Lastly, the average monthly CPP benefit for April 2025 was $844.53. The maximum Old Age Security (OAS) payment is $808.45 for those 75 and older. This would normally translate to about $3,300 for a couple. But many seniors receive less, which makes budgeting and planning critical.<\/p>\n Let\u2019s walk through steps they can take to navigate this financial situation.<\/p>\n While owning a home outright is a huge advantage, maintaining it can be costly.<\/p>\n You can consider downsizing. Moving to a smaller, lower-maintenance home or a senior-friendly community can reduce property taxes, utilities and upkeep. Moreover, downsizing can free up capital and reduce monthly costs significantly.<\/p>\n Renting out a spare room or partnering with another senior through vetted home-sharing programs can also help with supplementing income, provide companionship and added security. Programs like Canada HomeShare<\/a> also offer seniors the opportunity to rent rooms in their home to young people who are attending post-secondary school.<\/p>\n Seniors with limited income should make sure they are taking full advantage of their Canadian Dental Care Plan (CDCP) and their provincial public drug benefits program.<\/p>\n Story Continues <\/p>\n They should also find out if they qualify for the Guaranteed Income Supplement<\/a> (GIS) as this program not only boosts their monthly income but also grants them access to other provincial income supplements and health care programs, including assisted living support.<\/p>\n Staying on top of these programs and benefits can help seniors augment their income and live well into their advanced years.<\/p>\n Read more: \u2018You\u2019re going to live on beans and rice\u2019: This senior told Dave Ramsey she has debt and zero savings \u2014 here’s his response plus 3 retirement saving tips to get you back on track<\/a><\/strong><\/p>\n Stretching $2,000 a month requires some discipline, but living a frugal lifestyle while still enjoying quality of life is key.<\/p>\n Make sure you create a monthly budget and try to cut discretionary spending.<\/p>\n Track all expenses and categorize needs vs. wants. You can consider using free budgeting tools<\/a> if you’re tech-savvy. Limit dining out, subscriptions and non-essential purchases. Buy in bulk, shop sales and utilize food assistance programs if eligible.<\/p>\n Local senior\u2019s centres, food banks and utility assistance programs can also help reduce expenses.<\/p>\n Unexpected health expenses, home repairs or other emergencies can quickly throw off a tight budget.<\/p>\n Usually people are advised to keep at least 3-6 months of expenses in a highly liquid account, such as a dedicated high-interest savings account<\/a>. This means that if you need to access funds right away, you won\u2019t have to tap into your investments or take on debt.<\/p>\n It may be tricky to do in your current situation, but retirees are generally advised to build larger emergency funds. Consult a trusted financial advisor about this if you can.<\/p>\n If you\u2019re a senior living on a tight income, it’s important to be proactive about emergency savings, optimize your home and healthcare costs, and have control over daily expenses. By taking these steps, you can avoid running out of money and feel more secure in your retirement.<\/p>\n 1. Statistics Canada: <\/a>Household spending by age of reference person (May 21, 2025)<\/p>\n 2. Statistics Canada: <\/a>Life expectancy at various ages, by population group and sex, Canada (Dec 17, 2015)<\/p>\n