Home Bank accounts
Credit cards
Savings and investments
Home Banking Solutions
Credit Cards
Going Further
Tips and Tools
Wealth Management

Retirement planning for women: what's different?

09 July 2019 by National Bank
Retirement planning for women

Retirement planning is not always the same for men and women. There are several factors that could explain this difference, including a higher life expectancy, longer spells without pay due to motherhood and different concerns and priorities. What can you do to achieve your dream retirement? Preparing well and applying these tips will equip you for a secure retirement.

Why should you change your approach?

The debate about gender income inequality regularly pops up in the public arena. However; a closer look at the figures shows that differences in the lifetime income and saving capacity of men and women go beyond pay inequalities:

  • Statistics show that women tend to be less well prepared than men for retirement, with 60% of them expressing concerns about running out of money.
  • In 2018, 50% of women entrusted their retirement planning to their spouse, a percentage that rose to 61% among those born between 1980 and 2000. Yet, statistics show that 50% of them will go through separation during their lifetimes.
  • Women also live about 4 to 5 years longer than men. Therefore, they need to save more to finance these additional years of life.
  • Women often shoulder most of the burden of family responsibilities, taking extended maternity leave or working part time to take care of their children. This results in lower income, which in turn reduces their retirement contributions and saving capacity.

Consider these 5 factors

Retirement planning goes beyond monthly savings. It's about creating an overall plan with a professional, while taking into account your situation and goals. Did you know that many people mistake the Registered Retirement Savings Plan (RRSP) for a retirement plan? The RRSP is a financial tool used to prepare your retirement plan. To help us set up the right retirement plan for you, consider the following five factors:

  1. Time: will you be retired in 20 or in 40 years? How long is your retirement likely to last? Today, the average life expectancy for Canadian women is 84, versus 61 in 1920. This life expectancy is likely to keep rising over the next 50 years. You should therefore consider saving accordingly.
  2. Inflation: it has a direct impact on your purchasing power. For example, the trip you plan to take in 10 or 15 years will cost more than if you took it tomorrow morning. You will therefore need to save more.
  3. Healthcare: while expenses like RRSP contributions and mortgage payments will drop or disappear completely during retirement, others will emerge, such as domestic help, transportation assistance and home care. Don't underestimate your expenses during retirement.
  4. Asset allocation: like the saying goes, "don't put all your eggs in one basket." Think diversification. The more you diversify your investments, the lower your risk.
  5. Rate of withdrawal: how can you maintain your lifestyle without overspending or depriving yourself? Should you first draw from your TFSA, RRSP or cash savings? For your peace of mind, you should have a strategy for how soon and how often you will spend your income during retirement.

Set up your retirement plan in 4 simple steps

First of all, don't worry! You don't need to be a financial expert to plan your retirement. It's like planning a trip. Your travel agent will start by discussing your destination, then recommend flights and packages based on your situation. These four steps are the foundation of a sound retirement plan and can be followed by everyone⁠—men and women alike!

Step 1: Set your life goals

At what age do you plan to retire? How do you imagine spending your retirement? Do you have any specific goals or ideas? Start by noting down and ranking your priorities.

Step 2: Gather your documents

Before meeting with your advisor, make sure you have gathered all the necessary documents on your current investments, contributions to government plans, and the like. This is crucial because it will help them understand your personal situation and assist you in setting up the best possible plan.

Tip: the advisor plays a key role in devising your strategy so it's vital to pick someone you're comfortable with. Take the time to meet with them and ask questions. You need to build a trust-based relationship with your advisor.

Step 3: Set up your plan

Your advisor will carry out a complete analysis of your financial situation considering the above factors. Next, they will recommend solutions based on your situation, concerns and goals.

Step 4: Update your plan

Lastly, be aware that your plan isn't set in stone. It should change to account for life events. You should update it as soon as there's a major change in your situation, such as the arrival of a baby or a change of employment. Schedule an appointment with your advisor without delay.

Budget carefully for your retirement

Retirement budgeting may seem difficult and complicated, but it's easy with the right tools and support. This step also gives you a clear overview of your expenses and helps you make smarter decisions.

Check out these two simple tools:

  1. The Quebec Pension Plan (QPP) budget calculator
  2. The Government of Canada's budget calculator

Taking control of your finances is the first step towards a more secure retirement.

Make the most of your retirement income sources

Knowing your retirement income sources will help you and your advisor make the most of your disbursement strategy. Did you know that if you retire at 60 you will incur a 36% penalty from Retraite-Québec? If you retire at 70 instead, you'll get a 42% bonus.

The main sources of retirement income include:

  • Government plans

In Quebec, the Quebec Pension Plan (QPP) provides residents with a basic retirement income. If you live outside of Quebec, you'll receive income under the Canada Pension Plan. All Canadians can also receive benefits from the federal government under the Old Age Security (OAS) Program.

How much will you receive in total from these two plans? Assuming that you retire at age 65 and that you contributed the maximum throughout your life, you'll receive a total of about $20,000.

  • Supplemental retirement plans (SRP)

These are plans provided by your employer (pension plans), under which it contributes towards its employees' retirement income.

Ask yourself the following questions: do you have a defined benefit plan or a defined contribution plan? Is it indexed or not?

  • Personal savings 

These are investments (registered and non-registered), real estate holdings and other savings that can supplement your income from government plans.

Should you invest in an RRSP, an RESP, a TFSA or another account?

Even if your retirement is still far off, it's important to get informed and start planning as soon as possible. It's also never too early to set up a plan and seek advice.

Ready to plan a happy retirement?

Contact an advisor


Legal disclaimer


Any reproduction, in whole or in part, is strictly prohibited without the prior written consent of National Bank of Canada.

The articles and information on this website are protected by the copyright laws in effect in Canada or other countries, as applicable. The copyrights on the articles and information belong to the National Bank of Canada or other persons. Any reproduction, redistribution, electronic communication, including indirectly via a hyperlink, in whole or in part, of these articles and information and any other use thereof that is not explicitly authorized is prohibited without the prior written consent of the copyright owner.

The contents of this website must not be interpreted, considered or used as if it were financial, legal, fiscal, or other advice. National Bank and its partners in contents will not be liable for any damages that you may incur from such use.

This article is provided by National Bank, its subsidiaries and group entities for information purposes only, and creates no legal or contractual obligation for National Bank, its subsidiaries and group entities. The details of this service offering and the conditions herein are subject to change.

The hyperlinks in this article may redirect to external websites not administered by National Bank. The Bank cannot be held liable for the content of external websites or any damages caused by their use.

Views expressed in this article are those of the person being interviewed. They do not necessarily reflect the opinions of National Bank or its subsidiaries. For financial or business advice, please consult your National Bank advisor, financial planner or an industry professional (e.g., accountant, tax specialist or lawyer).