What’s the most tax-efficient way for retirees Tyson and Daniella to draw down their savings?
Tyson, 65, and Daniella, 57, are retired with a combined pension income of $87,840 and a retirement spending goal of $150,000 after tax. They have a net worth of $5,372,000, including substantial registered and non-registered assets, and seek a tax-efficient withdrawal strategy. Financial planner Ian Calvert recommends withdrawing $30,000 annually from each RRSP and $38,500 from non-registered assets while deferring CPP and OAS until age 70.
- ▪Tyson and Daniella have a combined annual pension income of $87,840 from defined benefit plans with 60% survivor benefits.
- ▪Their total net worth is $5,372,000, including $1,755,000 in RRSPs, $845,000 in a joint non-registered portfolio, and $1,8 million in real estate.
- ▪They aim to spend $150,000 annually after tax, requiring a withdrawal strategy to cover an $80,000 shortfall.
- ▪Financial planner Ian Calvert advises withdrawing $30,000 per year from each RRSP and $38,500 from non-registered assets to optimize taxes.
- ▪They should delay CPP and OAS benefits until age 70 to maximize indexed government income and avoid OAS clawbacks.
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Open this photo in gallery:Tyson, 65, and his wife, Daniella, 57, have a retirement spending goal of $150,000 a year.EDUARDO LIMA/The Globe and MailShareSave for laterPlease log in to bookmark this story.Log InCreate Free AccountTyson, 65, recently retired from a career in financial services. His wife Daniella, 57, took early retirement last year.They have a mortgage-free house in the Greater Toronto Area and a vacation condo overseas. They have no children, so their estate will go to three charities outlined in their wills, Tyson writes in an e-mail.Both Daniella and Tyson have defined benefit pension plans, not indexed to inflation. His plan will pay $5,120 a month and hers $2,200 a month.
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