RRSPs and Retirement: What Most Canadians Miss

For years, Canadians have heard the same retirement advice:

Max out your RRSP.

Get the deduction.

Do the responsible thing.

And for many people, that advice made sense, especially during their highest earning years.

But something interesting happens as retirement approaches.

A new question shows up:

If I did everything right… why doesn’t this feel right?

That question usually carries a bit of unease.

Not panic.

Not regret.

Just a quiet feeling that something doesn’t add up.

The Saving Years vs. The Spending Years

When you’re working, RRSPs are about saving and tax deductions.

But retirement isn’t about saving anymore.

It’s about income.

And that’s where the shift happens.

Every dollar that comes out of an RRSP is fully taxable.

That income stacks on top of:

• Pensions

• CPP

• OAS

• Rental income

• Part-time work

• And eventually, mandatory RRIF withdrawals

What once felt simple can suddenly feel complicated.

The Assumption That Doesn’t Always Hold for Why Your RRSP Doesn’t Feel Right As You Near Retirement

Many people assume:

“I’ll be in a lower tax bracket in retirement.”

Sometimes that’s true.

Sometimes it isn’t.

If several income sources arrive at the same time, your tax rate may not drop the way you expected. In some cases, it can even rise.

That’s often when the discomfort begins.

Not because you did something wrong.

But because the withdrawal side of the story was never fully discussed.

Saving For Your RRSPs Is Not the Same as Planning for Retirement Income

There’s a difference between:

Saving for retirement

and

Planning retirement income.

Saving focuses on accumulation.

Income planning focuses on coordination, timing, and flexibility.

When RRSPs were the only tool emphasized, other options — like TFSAs — were sometimes underused. That can limit flexibility later, especially when taxes or income-tested benefits come into play.

The goal was never just to defer tax.

The goal is to pay the least amount of tax over your lifetime.

That requires looking beyond the February contribution deadline.

The Better Question About RRSPs

Instead of asking:

“Should I buy more RRSPs this year?”

A better question might be:

“How will this decision affect my income five, ten, or fifteen years from now?”

RRSPs are not bad.

In fact, they can be extremely powerful.

But they are just one piece of the retirement picture.

What matters most is how all the pieces work together over time.

Why RRSPs Feel Unsettling

When retirement feels uncomfortable despite doing “everything right,” it’s often because:

You planned for saving.

But you didn’t fully plan for spending.

That realization can feel heavy.

But it’s also fixable, especially before withdrawals begin stacking in ways that limit your options.

Retirement isn’t just about having enough.

It’s about using what you’ve built wisely.

And that’s a different conversation entirely.

If Now You Know Why Your RRSP Doesn’t Feel Right As You Near Retirement and you’d like to talk through how your RRSP fits into your retirement income strategy, we’re always happy to have that discussion.