Retirement is not an event, it's a 25-35 year transition. Over that horizon, decisions that look minor early on can cost tens or hundreds of thousands of dollars. Here are the five mistakes we see most often in new engagements — and how to avoid them before they become irreversible.
Mistake 1 — Underestimating inflation. Many retirement plans built before 2021 assumed average inflation of 2%. Since then we have lived through three years above 4%, and even though the Bank of Canada target remains 2%, recent experience reminds us the path is never linear. Over 25 years, average inflation of 3% rather than 2% reduces purchasing power by about 25%. A $75,000 budget today requires $157,000 per year in 25 years at 3% — not $122,000 at 2%. Always model multiple inflation scenarios.
Mistake 2 — Forgetting tax on QPP and pension income. QPP, OAS and any employer pension are fully taxable. Too many retirees plan their expenses in gross dollars and are surprised at the first tax return. On $60,000 of pension income in Quebec, roughly $12,000 goes to federal and provincial tax. Always think in after-tax income, never in gross.
Mistake 3 — Drawing in the wrong order. The general sequence that maximizes net dollars in a Quebec couple's lifetime is rarely the intuitive one. Many start by withdrawing from the TFSA because there is no tax. Often a mistake. The TFSA is the best estate tool and the only vehicle that grows tax-sheltered indefinitely: preserve it as long as possible. Conversely, some leave their RRSP untouched until 71 and are then forced into huge RRIF withdrawals that explode marginal rates and trigger massive OAS clawback. The optimal sequence usually combines partial RRSP withdrawals between 60 and 71 to flatten future income, supplemented by non-registered as needed, keeping the TFSA for the end and the estate.
Mistake 4 — Ignoring OAS clawback. Above a net income of about $94,600 (2026 threshold), OAS is recovered at 15% of excess income, down to zero around $154,000. It is effectively an extra tax. Many retirees with a sizeable RRIF, employer pension and non-registered investment income cross that line without realizing it. Pension splitting with a spouse, RRSP withdrawals before 65 and strategic TFSA use often keep both spouses under the threshold.
Mistake 5 — Having no estate plan. A notarized will costs $300 to $700. A protection mandate, $200 to $400. Yet nearly one Quebecker in two dies without a proper will. Consequences: the law decides distribution for you, a common-law partner inherits nothing without a will, and probate often drags 6 to 18 extra months. For estates above $1M, lack of estate planning can produce an entirely avoidable final tax bill — especially on RRSPs and RRIFs transferred to anyone other than the spouse.
None of these five mistakes is irreversible if identified in time. Retirement planning is not a document you sign once and tuck in a drawer: it is a living plan you revisit every 12 to 24 months, especially the five years before retirement and the five after.