Retirement planning in Canada has never been more important—or more complex. Over the years, I’ve sat down with hundreds of clients in Timmins and Northern Ontario who are approaching this stage of life. Many have done a great job saving. But even among financially responsible Canadians, I’ve seen a few common mistakes derail what should have been a confident, comfortable retirement. 

In this post, I’ll share three big mistakes I see again and again—and offer some guidance on how to avoid them. I’ll also weave in real examples from clients I’ve worked with (names removed, of course) so you can see how small decisions can add up to big savings. 

Mistake #1: Mishandling pension unlocking 

One of the most avoidable mistakes I see involves pension unlocking, especially here in mining communities where many clients retire with significant pension assets. 

Here’s the issue: when a pension is transferred into a LIRA (Locked-In Retirement Account), there are strict rules about how and when you can unlock those funds. In Ontario, you typically have a one-time window (often 60 days after conversion to a LIF—Life Income Fund) to unlock up to 50% of the account. If you miss that window, you lose the opportunity permanently. 

I’ve seen heartbreaking cases where clients, working without an advisor, converted their LIRA to a LIF at their bank without realizing this. They either missed the unlocking window or mistakenly unlocked a small LIRA first—using up their one-time unlocking privilege—only to retire later with a large LIRA they couldn’t unlock. 

In one case, the client had already used their unlocking option on a small LIRA. A few years later, they retired from the mine with a much larger LIRA but had no way to unlock the 50% portion they could have otherwise used for flexibility in retirement. 

Why does this happen? Often it’s because clients either go fully self-directed, or they rely on bank advisors who may not be fully versed in pension rules. 

How to avoid it: Work with an experienced retirement advisor who understands pension legislation and timing. There are no do-overs with LIRA unlocking—getting the right advice up front is critical. 

Mistake #2: Under-utilizing TFSAs for retirement growth 

The second mistake I see regularly is Canadians misusing their Tax-Free Savings Account (TFSA)—or not using it strategically as part of their retirement plan. 

Many Canadians hear “savings account” and treat the TFSA like a regular savings account at their bank. The name is a bit misleading—so I don’t blame anyone for this. But the reality is that a TFSA can be one of the most powerful long-term growth tools in a Canadian’s financial toolkit. 

Too often, I encounter clients with TFSAs sitting in high-interest savings accounts or basic GICs earning 0.5% to 1%. Meanwhile, these same clients have decades to invest—and they could have been using those tax-free gains to build meaningful retirement income. 

If you invest properly inside your TFSA—using an appropriate mix of equity and fixed income aligned to your goals—you can allow your money to grow tax-free for years. Then, when it’s time to draw down assets in retirement, those TFSA withdrawals won’t trigger additional tax. 

I recently met with a client whose TFSA was sitting in cash, earning next to nothing. With a simple shift to a moderate growth strategy, we helped reposition the account to support their long-term goals—turning a wasted opportunity into a key part of their retirement income plan. 

How to avoid it: Think of your TFSA as a powerful retirement investment account, not a rainy-day fund. Use it strategically to shelter long-term growth. 

Mistake #3: Overlooking pension splitting and income splitting 

One of the biggest tax-saving opportunities in retirement is pension splitting and broader income splitting between spouses. Yet I’m amazed at how often I see this opportunity being missed—simply because tax returns aren’t filed with this in mind. 

Here’s the basic idea: after age 65, certain pension income and registered withdrawals can be split between spouses. If one spouse is in a high tax bracket and the other is in a low bracket, shifting income across can reduce your total household tax bill substantially. 

I had one client whose spouse was earning about $20,000 per year, while he was drawing $70,000 in pension income. By shifting about $30,000 of his pension income to her return, we saved them roughly $3,000 per year in taxes—every single year going forward. Even better, we were able to adjust prior years’ returns and recover significant amounts retroactively. 

Sadly, I often see cases where this isn’t done, usually because clients either file returns themselves or work with someone who isn’t optimizing for these strategies. 

How to avoid it: Ensure your retirement income plan—and tax filing—are optimized for income splitting. This is where working with an advisor who collaborates with your accountant (or reviews your returns) can deliver huge value. 

Timing matters: Start early if you can 

I’ll leave you with one final thought: the timing of your retirement planning really matters. 

Ideally, you want to start working with an advisor well before your final working years—not when you’re two months from retiring with all your money still in high-risk investments. 

Recently, I met with a client who was two months from retiring, with everything still fully invested in high-risk funds. If a market correction had happened right then, they could have seen a 30% drop—just as they needed to start drawing income. 

We use a cash wedge strategy with clients to avoid this. Funds needed in the first five years of retirement are shifted to low-risk investments. The next five years are invested more moderately, and only longer-term funds remain in higher-risk assets. This staged approach helps clients sleep better—and spend more confidently—throughout retirement. 

Final thought 

Retirement planning is about making strategic decisions that protect your hard-earned money and ensure your retirement years are truly enjoyable. 

Whether it’s unlocking pensions properly, maximizing your TFSA, or using pension splitting to your advantage, a good advisor will help you navigate these decisions and uncover savings opportunities you may not see on your own. 

If you’re preparing for retirement and want to make sure you’re on the right track, I’d be happy to have a conversation. 

Darcy Larouche, a CERTIFICIAL FINANCIAL PLANNER^® professional, helps physicians turn their income into lasting wealth through smart incorporation strategies and tax-efficient planning.

Email: darcy.larouche@igpwm.ca 
Phone: 705-360-7777

^{This is a general source of information only. It is not intended to provide personalized tax, legal or investment advice, and is not intended as a solicitation to purchase securities. Darcy Larouche is solely responsible for its content. For more information on this topic or any other financial matter, please contact an IG Wealth Management Advisor.}