How to invest after retirement

Just because you’ve stopped working doesn’t mean your money has to. After you retire, you can invest your retirement savings to cover your living expenses and more. There are different options and investments you’ll want to consider, and you’ll need a plan.

Start with a budget

Think about what you want your life in retirement to look like and how much money you’ll need for the lifestyle you want. Create a retirement budget for the next few decades that covers both essentials and nonessentials. 

A budget can help you keep the money you’ll need in low-risk investments and still give you the chance to invest in opportunities with potentially more risk and return for later.

Stay smart about risks when investing during retirement

You want to make sure you have a stable income to draw from in your retirement.

When you retire, the basic investing recommendations are the same as they were before: 

  • The closer you are to needing the money, the lower the risk you should take with it. 
  • The further out you are, the more risk and potential return you may want to seek. 

Think about longevity 

You’ll also need to consider longevity risk, which is the possibility that you could outlive your savings. You can use a retirement income calculator to find out how long a certain amount of money in a certain kind of retirement income plan is likely to last.

Understand your retirement investment options

Your total income in retirement comes from your retirement savings, individual and workplace savings plans, plus your government benefits: Old Age Security (OAS), Canada Pension Plan (CPP)/Quebec Pension Plan (QPP), and the Guaranteed Income Supplement (GIS).  

When you retire, you might need to move your money from your retirement savings plans to a retirement income plan—such as a Registered Retirement Income Fund (RRIF), life or term-certain annuity, Life Income Fund (LIF), or cash. 

Plans such as  LIFs, Locked-in Retirement Income Funds (LRIFs), and Restricted Life Income Fund (RLIF). RLIFs provide you access to income for life while your money grows tax deferred and offer you a choice of investment options. You need to decide how much money to withdraw, what investment to withdraw from, and how often you'd like to be paid.

Different types of income plans have different rules, withdrawal limits, and tax implications. Sign into your account online or look at your latest statements to see your plan details. 

Generate income in retirement from your investments

After you retire, you’ll want to consider not only an investment’s risk and return profile, but also its ability to generate income. There are a few investment types that offer income: 

  • Annuities
  • Equities 
  • Fixed-income investments


Annuities are contracts, offered by insurance companies, that agree to pay you a certain amount of money at a certain time and for a certain period. There are a few different types of annuities, and you should make sure you understand which one may be right for you. 


Although equities, also known as stocks or shares, tend to fluctuate more in value than other investments, you may decide it’s worth the risk to invest to get regular dividend payments. Dividends are the money paid by corporations to shareholders from after-tax earnings.

  • Common shares—Compared with interest income, Canadian dividend income gets preferential tax treatment. The dividend tax credit doesn't apply to foreign dividends.
  • Preferred shares—Preferred shares pay dividends just like common shares but offer some protection because dividends on preferred shares are paid out before those on common shares (but they’re still not guaranteed). Dividends on Canadian preferred shares have the same preferential tax treatment as common share dividends. Preferred shares are also like bonds because they can have an end date, are sensitive to interest rates, and have classes and other similar features. 

Fixed income 

Fixed-income investments are lower-risk investments that generate predictable or guaranteed streams of interest income.

  • Bonds—The most common type of fixed income are bonds. When you buy a bond, you’re loaning the money to the government or institution that offers it. Bonds grow to a stated value at their maturity (end date), which can create dependable income if you sell at maturity, but up until that date, their price can fluctuate with changing market conditions and interest rates. You can use bond laddering to help reduce your need to sell your bonds before they mature; if, for example, you know there’s money you won’t need until the latter part of your retirement, you could purchase 10- and 20-year bonds with the plan to sell them at maturity. 
  • Guaranteed investments—You can invest in products such as guaranteed income certificates (GICs) for a specific length of time and earn interest. When you open a GIC, you lock into a timeframe and interest rate for the deposit. You may also want to ladder these so they’re ready when you need them.

 Make the most of your savings

During uncertain times, you’ll want to make sure to regularly review your plan and rebalance your investments as needed. You may want to work with a financial advisor to help set a budget, understand your investment options, and sort out some of the more complex tax and investment aspects of retirement income planning.

The commentary in this publication is for general information only and should not be considered legal, financial, or tax advice to any party. Individuals should seek the advice of professionals to ensure that any action taken with respect to this information is appropriate to their specific situation.