My wife and I, both 79, are trying to survive on $2K/month from CPP/OAS. Our house is paid off and we have $50K in savings, but we’re scared of running out of cash — what do we do?

Jill and Daniel, both 79, have been retired for over a decade, but are reassessing their financial situation now that they are inching ever closer to 80.

While they have been diligent with their money, they have begun to question if their savings, alongside government benefits, will be enough going forward.

The average annual spending for Canadian households of those 65 years and older was $78,499 in 2023, according to Statistics Canada (1). With a modest $2,000 monthly income from Canada Pension Plan (CPP) and Old Age Security (OAS) — plus $50,000 in savings — it’s natural for them to be worried about outliving their savings and looking for some guidance.

The average life expectancy for 80-year-olds in Canada is just under 8 years for men, and 10 years for women (2). Using this Money.ca retirement calculator, we can see that if their savings are invested and earn an average annual rate of return of 5%, they can afford to make monthly withdrawals of $528.49 for 10 years.

Lastly, the average monthly CPP benefit for April 2025 was $844.53. The maximum Old Age Security (OAS) payment is $808.45 for those 75 and older. This would normally translate to about $3,300 for a couple. But many seniors receive less, which makes budgeting and planning critical.

Let’s walk through the steps they can take to navigate this financial situation.

Prepare an emergency fund

Unexpected health expenses, home repairs or other emergencies can quickly throw off a tight budget.

Usually, people are advised to keep at least three-to-six months of expenses in a highly liquid account, such as a dedicated high-interest savings account. This means that if you need to access funds right away, you won’t have to tap into your investments or take on debt. You can also use a chequing account that pays high interest to help save up some emergency cash while you do the everyday spending you were bound to do anyway.

The EQ Bank Personal Account is a great option to help build up your emergency savings while enjoying solid everyday banking features such as unlimited Interac e-transfers, free ATM withdrawals within Canada and no monthly fees.

If you’re a senior living on a tight income, it's important to be proactive about emergency savings and have control over daily expenses.

When you fund your EQ Bank Personal account and set up a direct deposit, you can earn 3.30% on every dollar deposited into the account. This is a pretty good start to building up your savings.

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Optimize your healthcare

Seniors with limited income should make sure they are taking full advantage of their Canadian Dental Care Plan (CDCP) and their provincial public drug benefits program.

They should also find out if they qualify for the Guaranteed Income Supplement (GIS) as this program not only boosts their monthly income but also grants them access to other provincial income supplements and health care programs, including assisted living support.

Staying on top of these programs and benefits can help seniors augment their income and live well into their advanced years. Additionally, PolicyMe’s critical illness insurance policy can help you bridge the gap when provincial healthcare or personal savings aren’t enough.

With tax-free lump sum payouts ranging from $10,000 to $1 million, PolicyMe can ensure you have peace of mind in the event you are diagnosed with a critical illness. You can use the proceeds to cover any out-of-pocket expenses or to support any time off work while recovering.

PolicyMe’s critical illness insurance covers 27 critical illnesses and 17 early-stage conditions, with 80% of conditions requiring no waiting period. Here’s how to get started: Simply answer four questions, and get an instant, no-obligation quote valid for 90 days.

Reduce your living expenses

Stretching $2,000 a month requires some discipline, but living a frugal lifestyle while still enjoying your quality of life is key.

Make sure you create a monthly budget and try to cut discretionary spending.

Track all expenses and categorize needs versus wants. You can use Monarch Money to both build and follow your budget to ensure you’re staying on track.

Within the Monarch Money app, you have the option to choose either Category or Flex budgeting depending on your preference. The first involves assigning an amount of money to specific spending categories, and the second works by tracking your spending in flexible categories each month.

Whichever you choose, Monarch Money keeps budgeting simple so you spend with intent.

And the best part? Monarch offers a seven-day free trial. If you like what you see, you could then snag 50% off with code WISE50

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Maximize your home value

While owning a home outright is a huge advantage, maintaining it can be costly.

If you’re entering your golden years, you could consider downsizing as part of the decluttering of decades. Moving to a smaller, lower-maintenance home or a senior-friendly community can reduce property taxes, utilities and upkeep. Moreover, downsizing can free up capital and reduce monthly costs significantly.

Renting out a spare room or partnering with another senior through vetted home-sharing programs can also help with supplementing income, provide companionship and added security. Programs like Canada HomeShare (3) can offer seniors the opportunity to rent rooms in their home to young people who are attending post-secondary school.

Article sources

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

Statistics Canada: Household spending by age of reference person (1); Statistics Canada: Life expectancy at various ages, by population group and sex, Canada (2); Canada HomeShare (3)