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What-If Financial Planning: Test Your Retirement Plan Before Making a Decision
By Martin Cloutier, CFP®, CIM® – August 3, 2026
Every important financial decision begins with a simple question:
What happens if?
What happens if you retire earlier? Save more each month? Change how your money is invested? Spend more during retirement? Or simply continue following your current strategy?
You do not have to guess how these decisions could affect your future. With what-if financial planning, different scenarios can be modelled and compared before you make a major change.
A Financial Plan Is More Than a Report
One of the biggest misconceptions about financial planning is that the final result is simply a report.
A financial plan should be a decision-making tool. It should help you understand how different choices may affect your retirement income, taxes, investments and the estate you eventually leave behind.
The objective is not only to determine whether you can retire. It is to identify the different paths available to you and understand the trade-offs involved with each one.
Testing a Retirement Scenario
Consider the fictional example of Gord and Marie.
Under their current strategy, their retirement plan is only 85% funded. Although they still have assets remaining at age 90, much of that value is tied up in their home.
Their liquid investments are projected to run out at age 77.
This distinction is important. Having a valuable home does not necessarily provide the cash flow needed to cover ongoing retirement expenses.
One potential solution would be to sell the home and move into an apartment. When an estimated apartment cost of $1,500 per month is added to the scenario, their plan becomes 99% successful.
However, they would still need to make another adjustment. In this example, reducing their other retirement expenses by $500 per month allows the plan to work.
The strategy may be financially viable, but it does not reflect their personal goal. Gord and Marie want to remain in their home for the rest of their lives.
That means other possibilities need to be tested.
What If They Saved More?
The next scenario increases their monthly RRSP contributions.
After recalculating the plan, their retirement becomes fully funded. They can remain in their home, and the plan continues successfully through age 90.
However, this solution requires significant additional monthly savings. That could reduce the amount of money available for their current lifestyle.
Saving more may solve the future problem, but it could create a new challenge today.
This is why financial planning should not evaluate a decision in isolation. Every adjustment comes with a trade-off.
What If They Invested Differently?
During the planning process, Gord and Marie discover that most of their investments are held in GICs.
This was not necessarily because they could not tolerate investment risk. They simply did not understand what other options were available.
After completing a proper risk assessment and discussing market returns, volatility and the possibility of market declines, they determine that they are comfortable with a more growth-oriented investment strategy.
A Good Financial Plan Should Give You Options
What-if financial planning allows you to explore questions such as:
- What if you retired two years earlier?
- What if markets performed better or worse than expected?
- What if you delayed CPP?
- What if you increased your retirement spending?
- What if you saved more today?
- What if you changed your investment strategy?
Testing these possibilities can help you understand which decisions may improve your plan and which ones could create unnecessary pressure.
It can also reveal opportunities you may not have realized were available.
Why Your Financial Plan Should Be Updated Regularly
Financial planning is not a one-time exercise.
Markets change. Unexpected expenses arise. Health circumstances evolve. Tax laws may change, and your personal goals can shift over time.
Reviewing the plan each year helps ensure that it remains aligned with your current circumstances and continues to support the future you are working toward.
A good plan should give you flexibility and options. It should not paint you into a corner.
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Disclaimers: Any view or opinion expressed in this article are solely those of the Representative and do not necessarily represent those of Harbourfront Wealth Management Inc. The information contained herein was obtained from sources believed to be reliable, however accuracy is not guaranteed. The information transmitted is intended to provide general guidance on matters of interest for the personal use of the viewer, who accepts full responsibility for its use, and is not to be considered a definitive analysis of the law or factual situations of any individual or entity. Any asset classes featured in this presentation are for illustration purposes only and should not be viewed as a solicitation to buy or sell. Past performance does not necessarily predict future performance, and each asset class has its own risks. As such, this content should not be used as a substitute for consultation with a professional tax or legal expert, or professional advisors. Prior to making any decision or taking any action, you should consult with a licensed professional advisor.
Harbourfront Wealth Management Inc is a member of the Canadian Investor Protection Fund and the Canadian Investment Regulatory Organization .
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