Financial planning during retirement typically involves six pillars, each representing one aspect of your financial life. Though each pillar stands as a single entity, they also work together to support a structure – your successful retirement. Below are the six pillars of retirement planning:

  • Estate planning. Your estate plan includes your will and powers of attorney for property and health care (known as mandates in Quebec). 
  • Legacy planning. If you wish to leave a legacy to a charity, you can choose to donate or gift life insurance, securities, real estate and more.
  • Investing. During your working years, you focused on building your assets. Now, you need to determine the most tax-effective way to turn them into an income stream while making sure you have enough to support you comfortably for the rest of your life. (See articles on retirement income.)
  • Tax planning. In retirement, tax planning primarily involves two separate needs: receiving income tax-efficiently and managing the tax liability that will be payable by your estate, upon your death. Consider the potential taxes when you plan your estate.
  • Income planning. When your financial life switches from wealth accumulation to income generation, you enter a new world of specialized income products, plans and strategies.
  • Insurance planning. In retirement, insurance needs change. You may want to consider long-term care insurance for your health and life insurance to offset tax on your estate’s capital gains.

In some cases, a single strategy or product can cover more than one pillar, as in the following illustrations.


When she was in her 40s, Susan’s parents both moved to a nursing home. The care they received was top-notch, but it used up most of their retirement savings. It was then that Susan decided she should get long-term care insurance.

It was a wise decision. Her health declined when she was in her early 70s. She was able to receive the care she needed at home, with her insurance covering the $42,000 annual cost for more than 12 years. That’s over $500,000 that would have eaten her savings, leaving less for herself and her children. 


When he was quite young, Rafael purchased a permanent life insurance policy with his wife as the beneficiary. When his wife passed away, he thought about simply cashing in the policy, which had now grown to a substantial sum, as he had no children or family he wanted to leave it to. Instead, he decided to transfer ownership of the policy to his favourite charity. In return, he was able to claim a charitable donation that qualified for the charitable tax credit.


When he retired, Norris purchased a life annuity to provide him with a guaranteed stream of income for the rest of his life. But he didn’t have a lot of other assets and still wanted to leave something to his family. That’s why he decided to use a portion of his annuity income to purchase life insurance. The insurance benefit equals the cost of the annuity and will go to his beneficiaries when he passes away.

An integrated plan is key

Effective retirement planning involves looking at your personal priorities across the six pillars and then tailoring a strategy that will help you attain the lifestyle you want. Your advisor can help you develop an integrated plan that’s right for you.