How to Plan Your Retirement in 5 to 10 Years

I am a divorced, empty nester and a registered nurse trying to plan the next five to ten years before retirement. I am 55 years old and will receive a workplace pension. Due to life circumstances, I did not begin contributing to my company pension until I was about 40.

Here is my financial profile:

House value: approximately $700,000, with $150,000 remaining on the mortgage. I plan to pay this off aggressively within the next three years and I am currently making extra payments of $4,000 per month.
No other debt.
RRSP savings: approximately $160,000.
Annual salary: $110,000.
Projected annual pension: if I retire at 60, I would receive $38,000 per year; if I retire at 65, $44,000 per year.
CPP: I will not get the maximum benefit but expect to be in the upper range.

I am trying to figure out when I can retire and what my next steps should be.

—Joan

How to build a five- or 10-year retirement plan—and deciding when to retire

Hi Joan. Your question is a common and important one. With the retirement resources you describe—pension, RRSP, anticipated CPP and a mortgage that will be paid off—you have a strong foundation. Below are practical steps you can follow to clarify when retirement is realistic and how to shape the next five to ten years so you reach the lifestyle you want.

1. Start by identifying your current lifestyle and expenses

Before estimating retirement needs, inventory your current lifestyle and spending. List monthly and annual expenses—groceries, utilities, transportation, insurance, entertainment, travel, health-related costs, charitable giving and anything else you regularly budget for. Note which of these are likely to change in retirement (commute costs falling, health costs potentially increasing, travel increasing or decreasing).

Many people underestimate the lifestyle they expect in retirement. Understanding current costs and activities helps you project a retirement budget that supports the life you want to live rather than defaulting to an artificially low figure.

2. Organize and review your core financial documents

Create or update a net worth statement and a cash-flow statement. The net worth statement lists assets minus liabilities and shows where your wealth is concentrated—home equity, RRSP, pension benefits, other investments. Your cash-flow statement shows how money flows in and out today and under various retirement scenarios.

From the details you provided, most of your wealth is tied to your home and your RRSP. Think about your intentions for the house: do you plan to leave it to your children, sell it, rent it, or access its equity later through borrowing? Each option carries different tax and lifestyle consequences. Your RRSP savings are taxable when withdrawn, so plan RRSP withdrawals alongside pension and CPP income to manage taxation efficiently.

3. Review your cash flow today and after the mortgage is paid

Examining the way cash flows today makes the retirement decision clearer. You reported a $110,000 annual salary. The following table summarizes your major annual outflows based on the information you provided:

Lifestyle expenses	$26,399
Career contributions (CPP and EI)	$4,664
Contributions to your pension plan	$8,731
Mortgage payments	$48,000
Income taxes	$22,567
Total	$110,000

When you inspect these figures, one striking point is that your core lifestyle spending—what you need to run a household and enjoy life—is only about $26,399 per year today. Many of the other line items (CPP/EI and pension contributions) will stop when you retire, and your mortgage payments will end once you pay off the mortgage. When the mortgage is paid off, you free up roughly $48,000 a year that you can redirect to savings, discretionary spending, travel, or enhancing your lifestyle.

That extra cash gives you options: you can increase current discretionary spending, accelerate retirement savings, or set aside funds for a specific goal. Exposing these numbers helps you find a balance between living well today and saving for a fuller retirement tomorrow.

If you plan to work until 65, a simple projection of guaranteed retirement income in today’s dollars might look like this:

CPP (upper-range estimate)	$18,807
OAS (Old Age Security)	$8,105
Defined benefit pension	$44,000
Total guaranteed income	$70,912

After tax, that could translate to roughly $58,878 annually, which is more than double your current basic lifestyle spending. This suggests you have substantial retirement capacity, but the real question is what lifestyle you want to support in retirement.

4. Estimate retirement expenses carefully—and iterate

Estimating retirement expenses is a repeating exercise. Start by modeling a conservative baseline and then create alternate scenarios: modest travel, active travel, home renovations, increased health spending, or part-time work. If you target, for example, $60,000 after-tax per year, model how pension income, CPP, OAS and RRSP withdrawals would combine to meet that figure while minimizing taxes and preserving investment capital.

Use “what if” scenarios to see the impact of choices such as delaying retirement by a few years, working part-time, or drawing down RRSPs at different rates. The lifestyle choices you make—travel frequency, housing decisions, gifts to family—tend to have the greatest impact on retirement outcomes, so quantify those choices and run the numbers.

Finding a fee-only financial planner

Working with a fee-only planner can be valuable, especially when you want polished cash-flow models, tax-aware withdrawal strategies and help choosing between retiring earlier with more RRSP withdrawals or delaying to increase pension and CPP. Look for a planner who acts as a fiduciary and charges transparent fees. Meet a few advisors to find someone whose approach and communication style fit you.

Joan, I didn’t give a single answer on the exact age to retire because that answer depends on the lifestyle you choose. You already have a strong financial base: a defined benefit pension, significant RRSP assets, an expected solid CPP benefit and the ability to eliminate your mortgage in a few years. Use the same focus you’ve used to pay down the mortgage to design the retirement you want—one that balances living well now with preserving resources for the years ahead.