In retirement, you shift from accumulating wealth to drawing it down. A spending plan ensures you don't outlive your money while still enjoying the retirement you've earned.

Unlike a budget (which can feel restrictive), a spending plan is about aligning your money with your priorities.

List all retirement income sources:

• CPP/QPP monthly benefit
• OAS (and GIS if applicable)
• Employer pension
• RRIF minimum withdrawals
• TFSA withdrawals (flexible)
• Non-registered investment income
• Part-time work or rental income

Compare your total income to total expenses:

• Income > Expenses: You have buffer for unexpected costs or legacy
• Income = Expenses: Sustainable but watch for inflation
• Income < Expenses: Need to reduce spending or draw down capital

A common guideline is the 4% rule—withdraw 4% of your portfolio in year one, then adjust for inflation annually. However, many retirees need flexibility:

• Spend more in early, active retirement years
• Reduce spending in later years as activity decreases
• Have contingency plans for market downturns
• Consider annuities for baseline guaranteed income

Your expenses will increase over time. Factor in 2-3% annual increases, and remember that healthcare costs often rise faster than general inflation.

Review your spending plan annually. Life circumstances change—your plan should too. Track actual spending against your plan and make adjustments as needed.