Retirees Spend 80% of Their Money on These 5 Things in Canada | How Do You Compare?

When you picture retirement, you probably think vacations, golf, or relaxing by the lake.
But the reality? Most Canadians spend around 80% of their retirement budget on just five things.

At Blueprint Financial, we’ve built hundreds of retirement plans, and almost everyone overspends in at least one of these areas.

See which one on this list jumps out at you that you can improve  — and start plugging the leak.

Let’s break down the top five spending categories for Canadian retirees.

The Top 5 Spending Areas

#5. Health Care – 5.25%

Canadian retirees spend about $3,121 a year on health care, or roughly $260 a month. I was surprised to see health care crack the top 5, seeing as how we have supposed “free” health care in Canada. 

While that is modest compared to the U.S., it still feels like a big deal once you are living on a fixed income. 

NOTE that these numbers and all the following ones are for households, so if you’re single, you can scale it down by about half.

What surprises a lot of my clients is how much these costs rise as you get older. Data shows that Canadians in their 70s and 80s face significantly higher out-of-pocket expenses than those in their 60s. It makes sense when you think about it: prescriptions become routine, dental work gets more frequent, vision and hearing costs pile up. But most people are caught off guard by how quickly it adds up.

Ways to save:

• Shop around since pharmacy prices can vary more than you might expect.
  
• Use generic medications, which Health Canada requires to meet the same safety and quality standards as brand names.
  
• Check for provincial or seniors’ programs that help with prescriptions, dental, or vision after 65.
  
• Prioritize preventive health. Spending on fitness, good nutrition, and regular checkups may reduce the need for costly treatments later.
  
• Claim the medical expense tax credit if your medical bills are high relative to your income. Many out-of-pocket costs qualify and can reduce your taxes. I made another whole video about this if you want to learn more.
  
• Pro tip: Ask HR if you can continue or convert your group health benefits when you leave work. Some employers extend coverage into retirement, and many plans let you convert without medical underwriting. You usually only have 30 to 60 days to decide.

#4. Recreation – 6.41%

The average Canadian retiree spends about $3,812 a year on recreation, or roughly $317 a month. This includes travel, entertainment, hobbies, gym memberships, and other leisure activities.

I thought this would rank much higher, since so many retirees picture travel and leisure as the centerpiece of retirement. For some, it does become a major expense — especially with multiple trips or costly hobbies — but the national average is lower than you might expect. What makes this category stand out is the return on investment. Research shows that experiences like travel and hobbies create more lasting happiness than material things, so this is often money well spent.

Ways to save:

• Travel off-season to get cheaper flights and hotels.
• Use seniors’ discounts at museums, recreation programs, and entertainment venues.
• Try house swaps or extended stays to make longer trips more affordable.
• Plan ahead for travel insurance, since premiums rise quickly with age.
• Find low-cost activities you enjoy. Find low-cost activities you actually enjoy. For me, that’s pickleball — and I’ve been crushed by players in their 60s and 70s more times than I can count. It’s humbling, but it proves this is a sport you can play for as long as you can walk.Beyond pickleball, things like walking groups, aquafit, or local community programs are great ways to stay active and social without spending much.
• Leverage rewards points from everyday spending to cover travel or recreation costs.

Many Canadians underestimate just how much these five categories eat into their retirement. At Blueprint Financial, we build retirement plans for Canadians that help people spend confidently without worrying about running out of money. We’re fee-for-service planners, so our advice is transparent and unbiased. Build the life you want, with the right Blueprint.

#3. Transportation – 14.04%

The average Canadian retiree spends about $8,344 a year on transportation, or roughly $695 a month. This category includes vehicle ownership costs such as gas, insurance, maintenance, depreciation, along with public transit, taxis, and rideshares.

Cars are one of the biggest money drains in retirement. Even if you drive less, the fixed costs of ownership remain. Insurance rates can start to creep up again after 65, fuel prices are unpredictable, and major repairs can catch you off guard. Many retirees are surprised to see how much of their budget goes into simply keeping a car in the driveway.

Ways to save:

• Downsize from two cars to one. For couples, this move alone can save thousands each year.
  
• Leverage transit passes. Seniors often qualify for discounted monthly passes in most major cities, making public transit far cheaper than driving.
  
• Car-share or rent for special trips. Services like Turo or occasional rentals can cover your needs without the costs of full-time ownership.
  
• Stay on top of maintenance. Preventive service extends your car’s lifespan and helps avoid costly breakdowns.
  
• Re-shop your insurance. Not every province will allow this, but rates vary widely between providers, and bundling home and auto can reduce premiums.
  
• Consider fuel efficiency. If you replace your car, a hybrid or electric vehicle can cut running costs significantly, especially with provincial rebates.
  
• Buy at the sweet spot. The best value cars are usually three to four years old. At that age, the steepest depreciation has already passed, but the car is still relatively new and reliable.
  
• Walk or bike for short trips. Many retirees save money and improve their health by swapping short drives for active transportation.

Transportation often feels like a fixed cost, but there is more flexibility than most retirees realize. Even small adjustments, like cutting back on car ownership or buying smarter, can free up hundreds of dollars a month.

#2. Food – 14.96%

The average Canadian retiree household spends about $8,889 a year on food, or roughly $741 a month. This includes both groceries (about 75%) and restaurants (about 25%).

Food inflation has been brutal — prices went up by over 20% between 2021 and 2023. Retirees feel this especially hard because food is non-negotiable — you can’t skip meals to balance your budget.

A big opportunity to save? Food waste. A new report from the Ivey Centre at Western University shows that Canadian households waste a staggering amount of food, with one estimate putting avoidable waste at more than $1,800 per household annually. (ivey.uwo.ca) That’s not just bad for the environment — it’s money thrown in the bin.

Ways to save:

• Slash waste by planning. Use the Ivey report’s recommendations: plan meals, make a grocery list and stick to it, store food properly, cook the right amounts, and embrace leftovers.
  
• Choose store brands. Many private-label products are made by the same companies that supply national brands — for example, Costco’s batteries come from Duracell, and their coffee was once roasted by Starbucks.
  
• Batch cook & freeze. Cooking in bulk helps prevent spoilage and keeps you from defaulting to expensive takeout.
  
• Use cash-back or grocery loyalty programs. These add up, especially when combined with tighter budgeting.
  
• Limit restaurant meals. Dining out is expensive — saving it for special occasions will stretch your grocery dollars far further.
  
• Use coupon and rebate apps. Tools like Flipp, Flashfood, and Checkout 51 make it easy to find weekly flyer deals, discounted near-expiry food, or cash-back offers directly from your phone.

#1. Housing & Home – 37.99%

To the surprise of nobody, housing and home is the number one expense. The average Canadian retiree spends about $22,575 a year, or roughly $1,881 a month, on this category, which covers mortgage or rent payments, property taxes, utilities, household operations, furnishings, and maintenance.

With Canada’s ongoing housing crisis, it is no shock that this dominates retirement budgets. Even retirees who are mortgage-free still face high property taxes, rising utilities, and constant upkeep. For those renting or carrying debt into retirement, the pressure is even greater.

Smarter and more creative ways to save:

• Tap into home equity strategically. Reverse mortgages or home equity lines of credit can free up cash flow without forcing you to sell, especially if most of your wealth is tied up in your house.
  
• Rent out space. A basement suite, spare bedroom, or even short-term rental during vacations can offset thousands in annual housing costs.
  
• Explore co-housing or shared living. Living with friends, family, or other retirees cuts costs and adds built-in community.
  
• Property tax relief programs. Many provinces and cities offer seniors’ deferral or credit programs that reduce or delay property tax bills.
  
• Energy retrofits with rebates. Programs like the Canada Greener Homes Grant can cover part of the cost of upgrades such as heat pumps, better insulation, or new windows, which lower utility bills over time.
  
• Think globally. Some retirees are choosing to retire abroad in places like Mexico, Portugal, or Thailand, where housing and living costs are a fraction of Canadian levels. Even renting long-term overseas can cost less than maintaining a modest home in Toronto or Vancouver.
• Consider snowbird rental strategies — rent out Canadian homes while living abroad seasonally.
• Consider non-traditional options. House-sitting networks, home exchanges, and snowbird rentals allow retirees to live part of the year in lower-cost regions while keeping Canadian housing costs down.

Housing will always be the biggest line item, but it doesn’t have to trap you. With creative thinking — whether that means renting out unused space, leveraging government programs, or even living part of the year abroad — retirees can reshape this cost and unlock more money for the things they truly enjoy.

Full Summary of expenses

Here is the full household expenditure for households over age of 65, i grouped together some housing categories, and removed income taxes. 

Retirement should be about freedom, not fear. The more you understand where your money goes, the more freedom you’ll have to truly enjoy it.

At Blueprint Financial, we help Canadians turn confusing numbers into clear, confident retirement plans — so you can live the life you’ve worked hard for. Explore our financial planning services or join our free financial newsletter to keep learning smarter ways to plan for retirement.