Laid Off at 52 With $250K in RRSPs and No Pension? Financial Experts Outline a Clear Retirement Plan

A Financial Post reader, Ryan L., recently shared his concern:

“I’m 52, my company is closing, and I’ll be laid off soon. Job prospects look uncertain. I only started saving for retirement at 40 and now have just under $250,000 in RRSPs, with no employer pension. I’m worried about my future.”

While the situation is stressful, financial experts say it’s far from hopeless — and with careful planning, Ryan can still secure a comfortable retirement.

A Realistic Retirement Goal

At 52, having $250,000 in RRSP savings is a solid start.
Experts point to the “Rule of 72”, a simple way to estimate how long it takes for your money to double.
Divide 72 by your annual return rate — at 7%, the investment doubles in roughly 10 years.

That means Ryan’s RRSP could grow to around $500,000 by age 65 — forming a strong foundation when combined with CPP, OAS, and possibly part-time work.
The main challenge: protecting that nest egg during unemployment and rebuilding momentum once re-employed.

Smart Steps After a Layoff

1. Cut expenses and build an emergency cushion.
Use a TFSA for short-term liquidity to avoid dipping into RRSPs during job loss.

2. Adjust your RRSP allocation.
Shift a portion into high-interest savings for temporary cash flow. That ensures you won’t have to sell investments in a downturn.

3. Plan for taxes and severance.
If you receive a severance package, prioritize paying off high-interest debt or topping up retirement savings.
Apply for Employment Insurance (EI) right away to prevent income gaps — even if payments begin after your severance period ends.

Remember: both severance and EI are taxable.
With three income sources in 2025 — wages, severance, and EI — it’s likely your tax withholdings will fall short. Use online calculators to estimate your total taxes and set aside extra cash to avoid touching your RRSP.

Don’t Rush to Withdraw RRSPs

Avoid withdrawing RRSP funds early to move them into a TFSA unless your income drops dramatically.
Since 2025 may still include severance and EI, your tax bracket will remain moderate.
Once 2026 income stabilizes or drops, you can reassess withdrawal timing.

Also, don’t underestimate CPP’s value — a guaranteed, inflation-protected income stream is invaluable for long-term security. Rejoining the workforce helps rebuild CPP contributions quickly.

Maintain CPP Disability Insurance Coverage

CPP includes Disability Insurance (DI) coverage, which remains active if you’ve contributed in four of the last six years (or three of 25 years with long contribution history).
To preserve that protection, Ryan should aim to re-enter the workforce before age 58.

The Bottom Line

“Ryan, your position is challenging, but manageable.
With strategic tax planning, disciplined saving, and continued CPP contributions, you can still retire comfortably — even after a midlife layoff.”

Source

• Financial Post – Laid off at 52 with $250,000 in RRSPs and no pension: Expert advice

• https://financialpost.com/personal-finance/retirement/laid-off-52-no-pension-rrsps-250000