Shifting from Nest Egg Retirement Mindset to Multiple Retirement Income Streams

Are you staring at your retirement savings, wondering if it will be enough? You’re not alone.

Many retirees struggle with the emotional shift from saving to spending, often feeling anxious about “turning on the tap” of their hard-earned nest egg.

But there’s a more empowering way to think about retirement: instead of viewing your savings as one big pile that’s slowly depleting, imagine multiple retirement income streams flowing toward you month after month, like a steady river.

This mindset shift isn’t just about feeling better—it’s about creating a practical strategy that combines various sources of income, from investments to pensions, helping you spend confidently and live joyfully in retirement.

Show Notes: Shifting from Nest Egg Retirement Mindset to Multiple Retirement Income Streams

Hey there, welcome back to the heart of your money. Today we’re going to talk about ease, peace of mind, and shifting mindset. I think it’s essential for anyone stepping into retirement, the shift from thinking about a nest egg to seeing your retirement as a series of income streams. Imagine it can be pretty stressful.

You’ve spent 20, 30 years stacking away cash and saving for this mythical idea of retirement. And then you get there and it’s really hard for some people to actually turn on the tap or to feel comfortable with the fact that they’re now dipping into what they thought was their nest egg, and they haven’t quite learned how to feel good about spending their hard-earned savings. This is a biggie. It can be pretty eye-opening too, and it can sneak up on you. You’ve spent years growing this thing called a nest egg. And here’s a thing in today’s world: I think we need to shift it. And that idea, I think it can actually be more empowering to think of that retirement money as steady income streams instead of one big pile.

So let’s dive into why this mindset shift is so important. I’m going to start with the emotional side of things because you’ve heard me say it before: let’s face it, money isn’t just about numbers. It’s so emotional. I’ve talked with so many people who’ve spent their lives working, saving, building this nest egg, but then retirement comes and suddenly they’re staring at it wondering, “Oh, is this going to be enough? Can I actually start spending it?” And they’re afraid to turn on that tap.

This nest egg mindset can bring up a lot of anxiety and I get it. You see that number and think, okay, if I start using it, will it just disappear? I’ve shared this story of the new retiree taking out cash each month from the ATM because it just felt safer in their hands. And I get a laugh out of this because, hey, you’re not alone. This little stack of bills feels a lot like control. But here’s the thing with income streams: we don’t have to feel like every dollar spent is chipping away at some fragile pile and it’s depleting. And you think that when you get your monthly retirement income that, okay, now I’m short that amount, whatever that is, if it’s $5,000 a month. Now that pile is dwindling. Instead, think of it as a river flowing toward us month after month. That shift alone will make a difference in how we feel about spending the money.

So the emotional side of things, this is the hardest part to deal with in financial planning – sitting across and dealing with mindset and emotions. So let’s think about that shift right now, and let’s think about what these income streams actually are. When I talk about income streams and I talk about turning on the tap, let’s think about your own investments, whether it’s your RSP or your TFSA, which is a tax-free savings account. In retirement, by the way, it is amazing.

Shifting from that nest egg feeling that you’ve saved and invested as much as you could in these, RSP or your tax-free savings account, and then now, because that’s the long-term idea – you just keep stockpiling and adding to it. Now you’re going to actually turn on the tap. So your own personal investments, thinking of them as income streams.

Here’s how I do it. And I’ll explain it – it’s kind of a simplistic version, but you’ve got three taps you can turn on. You’ve got your equities, which are your stocks. That’s your engine for growth, the long-term, because I mean, face it, we’re living longer and you’re going to need your money to make money for you. And so whether that’s dividends and income and compounded growth, you need 20 to 30 years of that if you’re retiring. So this isn’t something we’re selling off all at once. It’s a steady contributor to your income flow that grows over time and it beats inflation.

One of the biggest risks right now is to not be invested because your money is losing value because of inflation. Things are costing more. You know that we’re going to the grocery store – it’s about nine percent more to buy groceries. So you need something for that long-term growth to last you that 20 or 30 years and that’s going to be equity. So this tap adds to monthly flow in a way, and we might not actually pull from it, but we’re pre-planning and knowing your future self in 10, 15, 20 years is going to need these equities.

The next one is your fixed income. Fixed income, think of it as bonds and low-risk investments. Bonds can be thought of like GICs where there’s a guaranteed investment and then you know the interest after the term. If it’s one year, two year, three years, you’re getting paid interest. Bonds are the same thing and there’s something called corporate bonds as well where companies are actually issuing, um, you know, “air quote” GICs and they pay a little bit more. And so, yeah, you know, you do your research and you know the AA and AAA companies that you want to actually buy a GIC from, because they’re going to be around for a long time.

So there’s what we’re thinking of is what I’m calling fixed income, low-risk bonds. This one’s like the foundation. It’s a reliable stream that’s steady and keeps you grounded. Even when the markets are on one of the rollercoaster rides, it’s going to be a little bit more settling for you. Then there’s your peace of mind bucket and that’s the cash. This is if a surprise comes up, you’ve got it. It’s a security blanket. So that even if the markets dip, you can stay calm. I always call it the sweet spot. And so when I talk about cash reserves, everyone has a different sweet spot of what amount they feel comfortable with. And so that cash is in there as well in the bucket.

And then there’s a fourth, and I’m not going to get into it – I’m not an expert in that field, but for some it’s real estate. And there are questions about whether that counts as an allocation or not, but I’ve put it in there as a possible fourth part. These are considered asset allocation mix. So these things I just talked about – equities, fixed income, cash, possibly real estate – that’s a term and lingo in our investment advice industry. And so when someone talks about what’s your allocation, your asset allocation mix, that’s the recipe that is sprinkled in with equities, fixed income, cash, and there’s a reason to how much you have in each of those.

I think it’s worth talking about asset allocation and these things that I just mentioned because studies have shown that 80 to 90 percent of investor returns come from asset allocation. So it’s much more important than you realize. The main idea behind these mixes is to reduce risk. And this is how we diversify. Diversifying really just means not having all your eggs in one basket. And in each of these allocation mixes that I just talked about – equities, fixed income, cash – they perform differently from each other. And so that’s what we want to know is we want to know that we’ve kind of hedged our bets, we’ve diversified, we’ve got a little bit of everything and there’s a strategy that is much more in depth behind that.

But this is a balancing recipe. You need a bit of each ingredient. So when we have a market dip or an unexpected expense, you’re not scrambling to make it work. You know, I often talk about the Debbie Downer in my office. I always say, okay, we have to play Debbie Downer. What’s our defense strategy? Where do we turn on the tap when you know what hits the fan? And that’s why we’ve got those different things inside of our bucket.

Now, that’s your personal investments that I’m talking about – your RRSP, your tax-free savings account. But what about the other income streams out there that you most likely have that I didn’t mention? I’m talking about your CPP, the Canadian Pension Plan, your old age security, and maybe a defined benefit pension plan. These are most important. It’s definitely part of the recipe. And the great thing about these things – CPP, OAS, and a defined benefit pension – is that you don’t have to worry about the specific investment allocation and managing it. You get a set amount each month, no matter what.

Add that to the recipe and now we’re starting to feel real confident in success because we’ve got all these different places and income streams. The combination of these income sources are something that needs to be planned out with your financial planner. It’s about planning the tax and planning what bucket to start turning on the tap from first. And this is where I get so nerdy. And I love that. I love figuring out the combination and the true thing behind each one of those combinations is how do I pay the least amount of tax? And so once you have more buckets, the more income streams you have, the more success you’re going to have.

And so that’s the RSP, the tax-free savings account. Maybe you have a non-registered bucket, and then sprinkling your CPP, your old age security and your defined benefit pension plan. And I love planning that all out. Here’s a fun fact – it’s fun to me because I nerd out, but Canadians with three or more sources of retirement income report feeling way more secure in retirement, meaning that not only do they have more assets and money in retirement, but they feel better.

And I think that the combination is to feel confident. And so what I mean by three or more sources of retirement income, that’s CPP, the social benefits CPP and OAS being lumped into one, a defined benefit plan, and then having at least another bucket of your own investment savings. And so that in itself is going to make you feel confident going into retirement.

It just goes to show that a diverse, well-rounded approach makes a difference in how secure you feel. And so part of this is saving for our future self, when we talk to younger people or you’re in your thirties or forties and you’re like, “Ah, like this is tiring. I will never see the benefit of my savings” because you feel like – I do remember being in your late twenties and thirties and thinking you’ll never be 50 or 60 and thinking what’s the point. The whole point is your future self is going to thank you because the stress is going to be so much less there. It’s about feeling good going into retirement.

So if you’re having a hard time shifting your mindset and it gives you stress, go back to a personalized retirement plan, meaning that you should have this financial plan because the one thing in my office I notice is it guides me and then I get excited and nerdy and I know the path and the plan and the taxes and what buckets, but for you, it’s just about revisiting and knowing, okay, I feel better. We actually have a plan. A plan includes projected expenses, projected income sources, your savings goals – knowing the numbers can give peace of mind and a clear path forward. And the other thing is, I’m running various retirement scenarios, downsizes, working part-time, delaying retirement by a few years. What does it look like if there is a market crash? It’s about what’s the impact on my retirement security.

So visit that financial plan, have a financial plan, have a certified financial planner that you can go to, you can talk to them. You can say, “Hey, like I’m feeling stressed out” and they can – part of that job is to coach you, talk to you, show you, go through your plan, run the different scenarios. And the idea between those actual numbers is just to alleviate and remind you to shift your thinking.

So wrapping it up, this shift from a nest egg mentality to income streams is huge and it’s freeing. You don’t have to worry about one fragile bucket or pot of money running out because you’ve got different income streams working for you. It’s a system that lets you spend confidently, live joyfully, and trust that you’re covered. Even if the markets aren’t perfect all the time, think of it like this: retirement income isn’t about breaking open that nest egg. It’s about keeping the taps flowing. You’re creating a river of income that’s there month after month, supporting you and giving you the freedom to do what you want and enjoy life.

That’s it. If you liked this episode, I’m supposed to tell you to give a thumbs up, subscribe, share with anyone you think – um, share the podcast, get it out there. Anyone who needs a little reassurance about retirement, send it on. That’s it until next time. Talk soon.