During your working years, you will put away savings for your retirement. After retirement you will use these savings to pay for your day-to-day needs. This process is called decumulation.
After spending decades saving money, it can be a challenge to get into the decumulation mindset. One key is to pace your spending. Many people now enjoy a long retirement into their 80s or 90s so you want to make sure your money lasts as long as possible. Set up or revise your budget. There are items you will no longer need to purchase, such as clothing for work. However, your living costs could increase in later years with medical expenses, supportive living and caregiver costs. Find a good balance between spending on items that are not necessary and saving your money for the future.
Converting your savings into income will likely have tax and other implications depending on the type of account you have for your savings. Your Registered Retirement Savings Plan (RRSP), for instance, must be converted into a Registered Retirement Income Fund (RRIF) when you are 71 years old. Be aware of the different features of your savings and investment accounts.
Speak to your financial advisor and develop a retirement plan early on to ensure that your needs are met and that you are able to make your income last as long as possible.