Can this couple retire early and still afford to leave a TFSA for their children? Plus, where is the best place to retire in Canada in terms of income?

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Fred Lamb/Globe and Mail

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Morris and Abigail, who are in their mid-50s, are growing tired of their jobs and want to take early retirement in 2025. They will leave with a combined annual salary of $335,000 plus Morris’ bonus. Morris is 54 years old and works in sales, and Abigail is 56 years old and works in health care. They have two children, she is 17 and she is 19, and have a mortgage-free home in the Greater Toronto Area.

Children play an important role in planning.

Abigail will receive a defined benefit pension of $52,885 per year from 2025, plus a bridge benefit of $15,150 per year that ends when she turns 65. Morris has a small DB pension that pays him $7,700 a year at age 65. Morris also has a defined contribution pension at work. He contributes his 5 percent of his salary and the company matches it.

Their plan is for Abigail to collect her pension and Morris to withdraw from her RRSP to make ends meet, Morris wrote. They also receive dividends from non-registered accounts. They plan to continue contributing to tax-free savings accounts (TFSAs).

“We invest primarily in blue-chip dividend stocks, as well as some exchange-traded funds with U.S. and international exposure, guaranteed investment securities, and fixed-income ETFs,” Morris added.

“Can you sustain your annual after-tax expenses of $110,000 until age 95?” asks Morris. “Should I convert one or both of my RRSPs to a Registered Retirement Income Fund (RRIF) in retirement? When we die, we can pass the money from our TFSA, non-registered accounts, and home to our children, right? Do you want it?”

In this edition of Financial Facelift, Caitlin Douglas, certified financial planner (CFP) and certified financial analyst (CFA) at Manulife Securities in Winnipeg, looks at Morris and Abigail’s situation.

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At this age, you never know what’s going to happen next (so it’s better to leave a clean house)

These days, Ruth Miller writes in this first-person essay that before she leaves the house, she makes her bed and arranges things in the kitchen in case she doesn’t come home. “I’m 84 years old and end-of-life issues are on my mind. I’m worried that I’ll collapse while I’m out and end up in the hospital. If anyone comes into my house, I want them to mess up. There isn’t.”

Miller says he’s not a very tidy person. “My desk at work wasn’t clean, and my desk at my home office wasn’t clean either. Sometimes I go crazy cleaning, straightening, throwing things away. I don’t want my kids to kill me when I say, “Why did Mommy leave such a mess?” Did I really need to keep all these files? And all these books? ! ”

When Miller’s mother died, she left little for her and her brother to clean up and throw away. “It was a gift she left us,” she says. “I want to do the same, but I have to live a little longer to achieve it.

“My mother passed away at 84, which is the age I am now.” A long time ago, I did a study to find out how long you would live. “It said I would live to be 85.” I didn’t like the answer, so I decided to live until at least 90 years old. Will I live?”

Read the full article here.

First Person is a daily personal piece submitted by our readers. Want to talk? See our guidelines. Guide.

Where is the best place to retire in Canada in terms of income?

In the latest Charting Retirement article, Fred Vettese, former chief actuary at Morneau Shepell and author of Retirement Income for Life, discusses how retirement strategy and residence interact with each other. I’m considering whether it’s dependent on it.

In case you missed it

Two Smart RRIF Strategies to Consider as Part of Your Estate Planning

“My grandfather told me about funeral arrangements,” Tim Cestnick writes in this tax column. “The cemetery salesman showed him the plot and assured him, “You’ll have a great view of the pond and the swans.” Grandpa said, “Well, it would be nice to have a periscope on the coffin.” But I don’t know how I would enjoy it otherwise.”

As for his will, Cesnik’s grandpa joked that it would be a very short document. He said it just says, “I’m of sound mind and I spent all my money.”

As it turned out, he left a registered retirement income fund (RRIF) to Cesnik’s grandmother, who left the assets to her children. Last week, Mr. Cestnik spoke about naming RRIF beneficiaries.

In this article, Cestnick ends that conversation and shares another RRIF idea you might consider as you get older.

Western Canada: Alberta pension plan idea quickly draws criticism

Even if you weren’t already thinking about retirement, Mark Iype suspects you are now. “No, I’m not saying you should start planning early (which you should, by the way), but pensions are dominating the news this week,” he told The Globe’s BC bureau chief. I’m writing from Edmonton with Wendy Cox. , in this exclusive.

On Thursday, Alberta Premier Daniel Smith proposed a standalone Alberta Pension Plan that would remove Alberta from the Canada Pension Plan but take out more than half of the nation’s total assets.

As the Globe’s Kelly Criderman and James Bradshaw reported the day before the announcement, an analysis obtained by the Alberta government shows that the province has a projected total of $575 billion in CPP assets by 2027. They are entitled to $334 billion of that amount.

The third-party report was prepared by LifeWorks, which has since been acquired by Telus Health, and was released by Jason Kenney’s United Conservative government three years ago to investigate the feasibility of creating a stand-alone pension scheme. It was commissioned as such.

The controversial report found that Alberta, with its high per capita income, high labor force participation rate, and young population, had been the highest contributor to the CPP since its creation nearly 60 years ago. Based on facts.

“I believe Alberta’s pension system is fairer and will make life more affordable for all Albertans,” Smith said at a news conference Thursday morning. “It could provide additional benefits for seniors, increase take-home pay for workers, and strengthen Alberta’s advantage in attracting business. We believe it’s the right decision for our province.” .”

Read the full article here.

Q&A regarding retirement

question: A few weeks before my 60th birthday, I was recently downsized from my job. How should you change your investment strategy as you near retirement age? Not sure if you want to go back to working life?

We asked Mark Beiko, Head of RBC’s Portfolio Advisory Group, to answer this question.

As individuals age and approach or retire, they tend to want and need less volatility in their investment portfolios as they may use capital to fund living expenses. As a result, a simple recommendation is to change your investment strategy to one that has less risk of year-to-year fluctuations. This typically means reducing (but not necessarily eliminating) your portfolio’s exposure to equities and shifting to higher quality bonds.

Fortunately, there are even more reasons to consider bonds today. Interest rates have increased significantly over the past year and a half. As a result, yields on a variety of bonds, from government bonds to investment-grade corporate bonds, are much higher today. In some cases, yields are the highest in more than a decade. This means that some investors who require a certain rate of return do not need to rely solely on stocks to meet their financial goals. In other words, some investors may be able to take more risk on their portfolios than they have in the past decade to achieve the returns they need.

Everyone’s situation is different and requires a customized approach. Before switching investment strategies, the first step you should take when a life event occurs (such as the possibility of early retirement) is to review your current financial situation, update your financial plan, and decide what changes you want to make. is to determine whether it is necessary. This is to ensure that you reach your goals.

Have questions about money and lifestyle for seniors? Email us at Find an expert to answer your questions in an upcoming newsletter. Interested in hearing more about retirement? 65 We aim to inspire Canadians to live their best lives confidently and safely. sign up About our weekly retirement newsletter.

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