I'm 57 now and plan to retire Dec 31 the year I turn 65. I work for a small company with no pension plan or rrsp matching. I plan on withdrawing $100k a year for 5 years and delaying my cpp and oas until age 70 to max it out. I'm on track to have about $600-650k in my rrsp when I retire. I have no TFSA since my income is high and I'm throwing everything I have at my rrsp for tax reduction. I will also have an inheritance of around $200-400k. I am a renter here in Vancouver so thats the only unknown in my retirement as it's tough to say how much rent will be then. I'm single with no children. I hope my plan is a sound one.
It’s hard to determine if you have a good plan without doing a more detailed projection. Spending $100,000 per year as an individual is quite high versus other retirees. We would highly recommend building a detailed plan using adviice. It will highlight the pieces missing from your plan and perhaps things you hadn’t considered yet. Best time to plan is now before retirement.
You have the foundation of a good plan however you may need to fine tune it. You'll need to forecast living expenses to determine income and taxation projections. A $100k annual withdrawal may be fine but then again, it may be too aggressive. If you don't require the $100k for living expenses then you may be paying taxes at a higher marginal tax rate then you need to. Withdrawing a bit less and spreading your RRIF tax burden over a few more years may make more sense. A planner like Owen could likely provide you with a clear strategy.
@@adviice_ca Thanks for the reply. I tried to sign up on your web page but when I entered my email address it said an account already existed. I thought maybe I had signed up previously, so I tried "forgot password' and that message said 'a user with this email was not found', so I am unable to sign up. I would love your help.
@@garth217 What part don't you like? I take most of my rrsp while I have no other income, spend around $40-50k of the net $70k and invest the rest. My budget is small and I will get almost the max CPP since I will have worked full time for 46 years straight, maxing out my CPP contributions for 38 of those years.
Of course if you didn’t have to turn your rrsp into a rif with minimum withdrawals whether you need the money or not that would pretty much solve this problem.
Once again another video that suggests you should delay CPP until 70 only if you have substantial RRSPs. The average Canadian only has limited RRSPs. I planned for my retirement starting at age 28. Great pension and healthy RRSPs but no where near the amount in your first scenario because of the pension. If only TFSAs would have been around earlier. My CPP is currently growing my TFSA to avoid the dreaded estate tax.
A large RRSP isn't the only reason to delay CPP. If you have a solid defined benefit pension and even a reasonable RRSP, it may make sense to delay CPP and/or OAS. It's all about calculating your projected lifetime and estate taxation. As noted in the video, limiting RRSP exposure to a spouse may be another reason to melt an RRSP and delay CPP.
@garth217 You're writing as though an RRSP is a retiree's only source of income. Perhaps you have maxed TFSA accounts generating good income ( my friends and I do ) or non-registered account income? A retiree with a good defined benefit pension may also be in a position to delay CPP. It's all dependent on your personal factors, there is no one set rule.
This year and especially after Trump was elected my RRSP has been growing faster than I ever expected. Any way the software can account for such a growth rate? Since retiring at the end of June 2023, I have withdrawn a substantial amount and find that the RRSP is more than it was when I started withdrawing.
Trump was elected 1 month ago. I think it was the Biden economic policy that could have affected your portfolio, because Trump has done nothing yet and only one month has passed. So you should be thankful of the democratic party....or more likely, the economic recovery that took place after Covid ended.
I would assume within your RSP you have mutual funds,which include equities! To date equities have done extremely well in 2024! Yes,they really take off upon Trump's re-election.
We recommend updating your retirement plan annually or even semi-annually for this exact reason, things change and it could impact your decisions. For example, having an RRSP grow from $1M to $1.25M in a year will almost certainly affect the decumulation plan. The platform will reevaluate the plan based on the inputs provided, so in early 2025 updating the plan with the new balances may uncover changes in the decumulation plan, size of withdrawals, timing of withdrawals etc.
I'm 57 now and plan to retire Dec 31 the year I turn 65. I work for a small company with no pension plan or rrsp matching. I plan on withdrawing $100k a year for 5 years and delaying my cpp and oas until age 70 to max it out. I'm on track to have about $600-650k in my rrsp when I retire. I have no TFSA since my income is high and I'm throwing everything I have at my rrsp for tax reduction. I will also have an inheritance of around $200-400k. I am a renter here in Vancouver so thats the only unknown in my retirement as it's tough to say how much rent will be then. I'm single with no children. I hope my plan is a sound one.
No. It doesn't sound like it.
It’s hard to determine if you have a good plan without doing a more detailed projection. Spending $100,000 per year as an individual is quite high versus other retirees. We would highly recommend building a detailed plan using adviice. It will highlight the pieces missing from your plan and perhaps things you hadn’t considered yet. Best time to plan is now before retirement.
You have the foundation of a good plan however you may need to fine tune it.
You'll need to forecast living expenses to determine income and taxation projections. A $100k annual withdrawal may be fine but then again, it may be too aggressive. If you don't require the $100k for living expenses then you may be paying taxes at a higher marginal tax rate then you need to. Withdrawing a bit less and spreading your RRIF tax burden over a few more years may make more sense. A planner like Owen could likely provide you with a clear strategy.
@@adviice_ca Thanks for the reply. I tried to sign up on your web page but when I entered my email address it said an account already existed. I thought maybe I had signed up previously, so I tried "forgot password' and that message said 'a user with this email was not found', so I am unable to sign up. I would love your help.
@@garth217 What part don't you like? I take most of my rrsp while I have no other income, spend around $40-50k of the net $70k and invest the rest. My budget is small and I will get almost the max CPP since I will have worked full time for 46 years straight, maxing out my CPP contributions for 38 of those years.
Pls put more videos like these
Thanks for the comment! Any particular topics you’d like us to explore?
Of course if you didn’t have to turn your rrsp into a rif with minimum withdrawals whether you need the money or not that would pretty much solve this problem.
Even if you weren’t forced to withdraw there would still be tax planning issues, those withdrawals would still be taxable in the future.
@ Well i would rather withdraw money 20 years from now than now. I’d rather pay tax on something in the future than have nothing to pay tax on.
Once again another video that suggests you should delay CPP until 70 only if you have substantial RRSPs. The average Canadian only has limited RRSPs. I planned for my retirement starting at age 28. Great pension and healthy RRSPs but no where near the amount in your first scenario because of the pension. If only TFSAs would have been around earlier. My CPP is currently growing my TFSA to avoid the dreaded estate tax.
Thanks for the comment Garth, having a large RRSP does make delaying gov. benefits a bit more attractive.
A large RRSP isn't the only reason to delay CPP. If you have a solid defined benefit pension and even a reasonable RRSP, it may make sense to delay CPP and/or OAS. It's all about calculating your projected lifetime and estate taxation. As noted in the video, limiting RRSP exposure to a spouse may be another reason to melt an RRSP and delay CPP.
@@pauljose1261 if you don't have a substantial RRSP are you going to the food cupboards or living on the streets until 70?
@garth217 You're writing as though an RRSP is a retiree's only source of income. Perhaps you have maxed TFSA accounts generating good income ( my friends and I do ) or non-registered account income? A retiree with a good defined benefit pension may also be in a position to delay CPP. It's all dependent on your personal factors, there is no one set rule.
@@pauljose1261 you planning on going to the food cupboard until 70?
This year and especially after Trump was elected my RRSP has been growing faster than I ever expected. Any way the software can account for such a growth rate? Since retiring at the end of June 2023, I have withdrawn a substantial amount and find that the RRSP is more than it was when I started withdrawing.
Trump was elected 1 month ago. I think it was the Biden economic policy that could have affected your portfolio, because Trump has done nothing yet and only one month has passed. So you should be thankful of the democratic party....or more likely, the economic recovery that took place after Covid ended.
I would assume within your RSP you have mutual funds,which include equities!
To date equities have done extremely well in 2024!
Yes,they really take off upon Trump's re-election.
@ Almost all US individual stocks.
Thank Biden not Trump.
We recommend updating your retirement plan annually or even semi-annually for this exact reason, things change and it could impact your decisions. For example, having an RRSP grow from $1M to $1.25M in a year will almost certainly affect the decumulation plan. The platform will reevaluate the plan based on the inputs provided, so in early 2025 updating the plan with the new balances may uncover changes in the decumulation plan, size of withdrawals, timing of withdrawals etc.