# Where do I go from here? What would you do?



## oldmanrockband (Dec 27, 2016)

I'm 62 years old, retired, in good health, recently widowed, have about $180,000 in RRSP's, a home worth $340,000 at today's market value, and an unindexed DB pension of about $40k a year that I can comfortably live on,(for now) and no debt. Also I have no kids, and nobody that I particularly wish to leave anything to.
If you were in my situation, what would you do?


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## like_to_retire (Oct 9, 2016)

Your biggest enemy is no indexing on the pension. You own your home - that's good.

You're able to live on your $40K pension for now - good. The $180K in RSP ain't a lot, but you need to parlay that into an indexing strategy for your pension.

Considering a 1.4% CPI this year, then you would need an additional $560 income next year on your pension to remain even with inflation.

The $180K RSP at 2% (guaranteed return) produces $3600 a year, so this will cover the inflation on the pension and provide leftover for further growth, while being mindful of taxes.

Rinse and repeat.

ltr


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## 1980z28 (Mar 4, 2010)

oldmanrockband said:


> I'm 62 years old, retired, in good health, recently widowed, have about $180,000 in RRSP's, a home worth $340,000 at today's market value, and an unindexed DB pension of about $40k a year that I can comfortably live on,(for now) and no debt. Also I have no kids, and nobody that I particularly wish to leave anything to.
> If you were in my situation, what would you do?


If i was in your place i would get a spouse and have some fun or friend 


Lots of good wifes out there


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## birdman (Feb 12, 2013)

Does the 40K pension include bridging of CPP and OAP or is that additional income when you start receiving it?


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## Oldroe (Sep 18, 2009)

About every 10 years you will need new money. 30% more. And just luck at 71 you need to start folding your RRSP.

You state leaving anybody anything is not a property. So look at your family tree and everybody makes it to 85, it's $180,000/15=$12000/year.


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## lifeliver (Aug 30, 2010)

Move to Thailand, get a nice Thai wife and enjoy the rest of your life.


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## PrairieGal (Apr 2, 2011)

My condolences on your loss. I was widowed four years ago, and I remember very well that feeling of being at loose ends and not knowing where to go from here. My advice is not to make any snap decisions. Take the time to grieve and heal. Financially, you are fine for now. You don't say whether you are getting early CPP, but in three more years you can start getting OAS, and that will also help bridge the gap. CPP and OAS are both indexed for inflation. And if your spouse paid into CPP you should get a survivor's pension. In your later years you could sell your house if you need to fund assisted living.


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## Beaver101 (Nov 14, 2011)

PrairieGal said:


> My condolences on your loss. I was widowed four years ago, and I remember very well that feeling of being at loose ends and not knowing where to go from here. My *advice is not to make any snap decisions*. Take the time to grieve and heal. Financially, you are fine for now. You don't say whether you are getting early CPP, but in three more years you can start getting OAS, and that will also help bridge the gap. CPP and OAS are both indexed for inflation. And if your spouse paid into CPP you should get a survivor's pension. In your later years you could sell your house if you need to fund assisted living.


 ... +1


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## Daniel A. (Mar 20, 2011)

frase said:


> Does the 40K pension include bridging of CPP and OAP or is that additional income when you start receiving it?



Depending on the above I'd likely start moving money out of the RRSP and into TFSA looking at the best tax bracket for withdrawal.


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## My Own Advisor (Sep 24, 2012)

Very sorry for your loss....

I think Daniel's advice is good - try to find ways to slowly move RRSP assets under TFSA - then start earning (tax-free) income within TFSA likely via Canadian-listed ETFs or a basket of Canadian stocks that pay dividends.

Best of care.


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## oldmanrockband (Dec 27, 2016)

like_to_retire said:


> The $180K RSP at 2% (guaranteed return) produces $3600 a year, so this will cover the inflation on the pension and provide leftover for further growth, while being mindful of taxes.
> 
> Rinse and repeat.
> 
> ltr


My rrsp is in mutual funds right now, so maybe I'll look at something a little more stable. Thanks


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## oldmanrockband (Dec 27, 2016)

1980z28 said:


> If i was in your place i would get a spouse and have some fun or friend
> 
> 
> Lots of good wifes out there


No shortage of friends, female or otherwise! I've just got that age old (or is it old age?) problem...how to die broke, but have enough to live on till then.


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## oldmanrockband (Dec 27, 2016)

frase said:


> Does the 40K pension include bridging of CPP and OAP or is that additional income when you start receiving it?


Yeah, I'm bridged. My wife and I took early CPP (good for her, at least she got to spend some of it). When I turn 65 my pension will reduce, OAS will make up part of it, but I'll take a hit on CPP.


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## oldmanrockband (Dec 27, 2016)

Oldroe said:


> About every 10 years you will need new money. 30% more. And just luck at 71 you need to start folding your RRSP.


I guess that's assuming 3% inflation? Could be more. could be less. I'm hoping ,my RRSP will be worth quite a bit more than it is now when I wrap it up. Any ideas about strategies for winding up RRSP's? I've got about as much idea as how long I'm going to live as anybody else. Parents died in their 70's, grandparents died in their 80's


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## oldmanrockband (Dec 27, 2016)

lifeliver said:


> Move to Thailand, get a nice Thai wife and enjoy the rest of your life.


Ha ha, I don't need to move to Thailand or anywhere else thank you. My life pretty much IS a vacation right now!


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## oldmanrockband (Dec 27, 2016)

PrairieGal said:


> My condolences on your loss. I was widowed four years ago, and I remember very well that feeling of being at loose ends and not knowing where to go from here. My advice is not to make any snap decisions. Take the time to grieve and heal. Financially, you are fine for now. You don't say whether you are getting early CPP, but in three more years you can start getting OAS, and that will also help bridge the gap. CPP and OAS are both indexed for inflation. And if your spouse paid into CPP you should get a survivor's pension. In your later years you could sell your house if you need to fund assisted living.


Yeah I'll take a hit when I turn 64 as my pension is bridged, and I took early CPP. I've no plans to make any big changes in my life right now. I may consider downsizing again in a few years, as property taxes and bills add up to almost 1k a month. I do get a survivors pension, as well as my own CPP over and above my DB pension. I may have to check out the assisted living sooner or later when I need someone to spoon feed me!


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## oldmanrockband (Dec 27, 2016)

Daniel A. said:


> Depending on the above I'd likely start moving money out of the RRSP and into TFSA looking at the best tax bracket for withdrawal.


Yeah I may start running some scenarios on Studiotax to see what the impact would be. Thanks.


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## steve41 (Apr 18, 2009)

OK..... keeping the house and dying broke at 95 sees you with a $45163 annual lifestyle. (beer, gas &groceries)

Selling the house now will deliver you a $55,333 annual lifestyle. (the extra $10K to account for rent)

Based on 3% ror, 2% inflation and house value increasing at 1% pa. Living in BC


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## oldmanrockband (Dec 27, 2016)

steve41 said:


> OK..... keeping the house and dying broke at 95 sees you with a $45163 annual lifestyle. (beer, gas &groceries)
> 
> Selling the house now will deliver you a $55,333 annual lifestyle. (the extra $10K to account for rent)
> 
> Based on 3% ror, 2% inflation and house value increasing at 1% pa. Living in BC


Nice thumbnail Steve! Thanks (not sure I understand the process though...I'm no financial guru)
Other things I should consider:
Nobody in my family I'm aware of ever lived beyond 85. Maybe I should aim for 90 and break a record.
My house is two years old, I might want to move before major maintenance costs are required (new roof etc)
I'll need a new vehicle in 3-5 years (I tend to buy new every 10 years or so and drive it till the wheels fall off)
Maybe I'll get a little job. I'm a retired engineer,(10 years) and am winding down a photography business (not very profitable these days) and ramping up a music instruction business, but I think that'll end up being revenue neutral. (keeps me busy and pays for my toys)
Also, I have a HELOC available at 3.2%, is it worth borrowing to top up my TFSA? (RSP's are maxed out). I'm not particularly risk averse, I believe in the market over the long term,but who knows, we may be in for a correction.
I looked at reverse mortgage options, but i don't need the cash and they appear to be a scam, based on what I've read here.


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## Benting (Dec 21, 2016)

oldmanrockband said:


> Maybe I'll get a little job.


Great idea if you can get a part time job and keep you active !


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## Brad911 (Apr 19, 2009)

Borrowing to invest in your TFSA wouldn't make a whole lot of sense as the interest would not be tax deductible. You could borrow to invest in a non-registered portfolio with the intention of focusing on tax efficient cashflow (dividends & capital gains mainly). If you have an obligation to only pay down the interest component its a slow process but one where you can make some headway if you make good decisions. Risk is still present and would mean your asset allocation would likely need to change to more than a 60/40 bond & stock ratio.

I would second the recommendation to start moving as much as you can of the RRSP funds into your TFSA to avoid the RRIF withdrawals as much as possible. Working longer obviously helps and could make up the difference. Whether as an engineer part time, contract or doing something else you love (my neighbor recently retired and is working at Lee Valley - loves it).


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