What to Do if You’ve Fallen Behind on Your Retirement Savings

Practical Steps for Canadians in Their 50s to Catch Up with Confidence

If you're in your 50s and feeling behind on your retirement savings—you're not alone. Life happens. But there’s good news: you still have time to take control and build a solid financial future.

The key? Start now, stay consistent, and take advantage of the tools, accounts, and strategies available to you in Canada.

1. Increase Your Contributions — Even by a Little

At this stage, one of the most powerful moves you can make is to save more and save often. If you're employed and have steady income, use this window to ramp up contributions aggressively.

What to Do:

  • Maximize RRSP contributions

    • Check your Notice of Assessment for unused RRSP contribution room.

    • RRSPs reduce your taxable income and allow your money to grow tax-deferred.

    • For 2024, the RRSP contribution limit is 18% of earned income up to $31,560.

  • Top up your TFSA

    • The 2024 TFSA limit is $7,000, and cumulative room (if you’ve never contributed) could be over $95,000.

    • TFSAs offer tax-free growth and flexible withdrawals with no tax on income.

  • Set up automatic monthly transfers

    • Even $250–$500/month can snowball when invested.

    • Automate so it’s consistent and painless.

  • Redirect windfalls

    • Tax refunds, bonuses, inheritance, or even expense reimbursements should go to savings before being spent.

2. Slash Unnecessary Spending and Redirect to Retirement

Cutting expenses is the fastest way to free up cash for savings—without needing to earn more.

What to Do:

  • Track every dollar for 30 days using a tool like Mint, YNAB, or a spreadsheet.

  • Cancel unused subscriptions (streaming, magazines, gym memberships).

  • Negotiate bills: Call your phone/internet provider to get a better rate.

  • Eat out less frequently: Even reducing by 1–2 meals out per week can save $200+ monthly.

  • Downsize your vehicle or sell a second car you rarely use.

Tip: Funnel the money you free up directly into your RRSP/TFSA. Create a “found money” retirement fund.

3. Reassess Your Retirement Timeline

If you’re behind, one of the best things you can do is give yourself more time. Working longer has a triple benefit:
- More time to save
- Fewer years to fund
- Higher CPP payout (if delayed)

What to Do:

  • Consider delaying CPP to age 70

    • Your CPP pension increases by 8.4% per year after age 65.

  • Explore phased retirement

    • Transition to part-time or consulting instead of full retirement.

  • Do the math: Run retirement scenarios for different retirement ages (60, 65, 68, 70) to see what’s realistic.

4. Optimize Your Investment Strategy

In your 50s, your portfolio should start shifting to preserve capital, while still growing.

What to Do:

  • Check your current asset allocation

    • Are you too conservative? Too aggressive? The right mix depends on your retirement date and risk tolerance.

  • Diversify across accounts

    • Use RRSPs, TFSAs, and non-registered accounts strategically for tax efficiency.

  • Rebalance annually

    • Markets fluctuate—make sure your mix of stocks/bonds/ETFs still matches your goals.

  • Seek professional help if you’re unsure. A certified financial planner can help optimize your risk/return balance.

5. Plan for Big Expenses (Especially Healthcare)

Healthcare costs increase significantly with age—even in Canada. Many retirees overlook the impact of out-of-pocket health expenses.

What to Do:

  • Budget for dental, vision, prescriptions, and long-term care.

  • Get supplemental health insurance through Blue Cross, Manulife, or your workplace plan.

  • Set up an emergency fund of 3–6 months of expenses to handle unexpected medical costs.

  • Look into critical illness or long-term care insurance if still eligible.

6. Generate Extra Income (If Needed)

If your savings gap is large, adding income—even temporarily—can help fill the hole faster.

What to Do:

  • Freelance or consult in your industry.

  • Monetize a hobby (tutoring, baking, photography, handyman work).

  • Rent out a room or your basement through platforms like Airbnb.

  • Sell unused items: furniture, electronics, collectibles.

Tip: Treat side income as “bonus retirement money”—don’t spend it. Save or invest it right away.

7. Get Professional Guidance and Build a Recovery Plan

You don’t need to do this alone. A licensed financial advisor or retirement planner can help you:

- Project how much you’ll need in retirement
- Create a tax-efficient withdrawal strategy
- Adjust your savings and investments
- Take advantage of government benefits like GIS, OAS, CPP

What to Do:

  • Book a retirement planning meeting with a CFP. Many offer free consultations.

  • Create a written plan with milestones, targets, and a realistic timeline.

Conclusion: You're Not Too Late—You're Right on Time to Start

Falling behind on retirement savings is common—but staying behind doesn’t have to be. With a clear plan, consistent action, and the right mindset, you can course-correct and build a strong foundation for your future.

The key is to act today.
Every dollar you save, every expense you cut, and every smart financial move you make brings you closer to a comfortable, confident retirement.

Mike Gomes, CFP