You hit $1 million by 50 — but retire too soon and you could lose hundreds of thousands. Here's how to time it right

When you retire matters just as much as the amount you have in your retirement savings, and exiting the workforce earlier than expected can have consequences you may not have thought about.

Consider this hypothetical example: Chris is a 50-year-old with $1 million invested, earning 7% annually and could still save $12,000 a year if she continued to work. For Chris, what changes at each retirement age — 50, 55, 60, 65 or 70 — isn’t only how long her money lasts. It’s about how much income it can safely generate for her.

To get a better idea of what this means, here’s what Chris’ retirement journey looks like at different ages.

Age 50: Very early retirement

With a million-dollar portfolio, Chris could technically retire at 50. But this option also leaves her the most vulnerable.

According to Statistics Canada, a 50-year-old can expect to live until at least well into their early 80s (1). That means Chris’ portfolio may need to last more than 30 years — through market fluctuations and inflation.

There’s also a tax issue. Withdrawing from a Registered Retirement Savings Plan (RRSP) early means the full amount is added to your taxable income for that year. Depending on how much Chris takes out and which province he lives in, she could be hit with a withholding tax of up to 30% at source, plus additional income tax at her marginal rate when she files (2).

Unlike the U.S., Canada doesn’t have a fixed “penalty age” for retirement account withdrawals. But that doesn’t mean early withdrawals are free — they can push Chris into a higher tax bracket and permanently reduce her RRSP contribution room, which she can never get back. For added income and flexibility, she may want to consider part-time work or contract income to keep any RRSP withdrawals small and her tax bill manageable.

And while Chris is contemplating withdrawals from her RRSP, others in their early 50s might still be looking to sock away as much as they can before retirement. If you find yourself in that group, the type of RRSP account you choose can matter a great deal, depending on your goals.

For those looking for a low-risk way to put their cash into an RRSP account, there are no-fee, high-interest savings accounts like those offered by EQ Bank. With the EQ Bank RRSP Savings Account, not only do you get to avoid monthly fees and minimum balance requirements, but you also get an annual interest rate of 1.5%, so you can maximize the tax-deferred growth on your savings.

Plus, for a limited time, get up to $200 cash when you add new deposits to your EQ Bank RRSP Savings Account.

Age 55: Early retirement

Retiring in your mid-50s is still relatively early, but it comes with one meaningful advantage: a longer runway to plan.

If he waits just a little longer, Chris benefits from five more years of compound growth and contributions. Starting with $1 million at age 50, with $1,000 in monthly contributions and 7% annual growth, her portfolio could grow to approximately $1.47 million by age 55.

He also gains more flexibility around Canada Pension Plan (CPP) timing. While she still can’t collect CPP, retiring at 55 gives her time to carefully plan when she will start collecting this benefit — and whether waiting until 65 or even 70 for a higher monthly payment makes sense for her situation.

During these early retirement years, drawing down RRSP funds gradually — while her income is lower — can be a smart tax strategy, keeping her in a lower bracket and reducing the size of mandatory Registered Retirement Income Fund (RRIF) withdrawals later.

With that longer runway to plan, another option for Chris would be to trade more directly using an online brokerage like Questrade to try get close to — or possibly exceed — her 7% annual growth target.

Questrade has long been one of Canada’s leading discount brokerages, offering various accounts to buy and sell stocks, ETFs, options and more. And now, with commission-free trades on stocks and ETFs listed in Canada or the U.S., it’s a top choice for self-directed investors who want to build their own portfolios without being burdened by fees.

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Age 60: Conventional retirement

Many Canadians retire in their early to mid-60s. It’s also a notable milestone because it’s the earliest age that Canadians can start collecting CPP (3).

However, taking CPP at 60 comes at a cost — payments are reduced by 0.6% for every month before age 65, up to a maximum reduction of 36%. And that cut is permanent.

The upside of retiring at 60 is a useful tax-planning window. Chris isn’t yet collecting CPP or Old Age Security (OAS), so her taxable income may be low enough to make strategic RRSP withdrawals attractive. By pulling money out of her RRSP while her income is low — and moving it into a Tax-Free Savings Account (TFSA) — Chris can essentially “rebalance” her savings toward an account where future growth and withdrawals will be completely tax-free (4). The more she can shift into her TFSA during these lower-income years, the less she’ll owe the Canada Revenue Agency (CRA) when she starts drawing down later in retirement.

Furthermore, by retiring at 60 rather than 55, and continuing $1,000 monthly contributions with 7% annual growth, Chris’ portfolio could grow from approximately $1.47 million to around $2.1 million.

Age 65: Full benefit retirement

Age 65 is the traditional retirement age and the point at which most government benefits kick in together. In fact, the average retirement age in Canada was 65.4 years in 2025, according to Statistics Canada (5).

At 65, Chris becomes eligible for both CPP and OAS benefits. The monthly maximum CPP payment for new recipients at 65 years of age as of this year is $1,507.65 (6). She also becomes eligible for the maximum monthly OAS payment of $743.05 for retirees aged 65 to 74 (7). Together, these two benefits can form a meaningful income floor — though for most Canadians, they aren’t enough to live on.

Waiting until 65 also gives Chris’ portfolio more time to grow. With continued contributions and 7% annual growth, her nest egg could reach approximately $3 million or more by age 65.