# Exhaust all savings by age 70 while deferring OAS/CPP to get max - anyone?



## janus10 (Nov 7, 2013)

Just wondering if anyone here knows of someone who has done, or is planning on doing, this. I.e., pretty much exhaust all of your investments to cover retirement costs to move to the "guaranteed annuity" of government money.

So, you would plan to spend it all (or vast majority of it) by age 70 and defer receiving OAS/CPP to get the bonus percentages. I believe it is something like 136% for OAS and 142% for CPP. What would be the issue with CPP if you deferred beyond age 65 as it pertains to max earning years?

For ourselves, we are planning on taking CPP at 60, but depending on how things go, we could end up deferring OAS.


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## CalgaryPotato (Mar 7, 2015)

janus10 said:


> Just wondering if anyone here knows of someone who has done, or is planning on doing, this. I.e., pretty much exhaust all of your investments to cover retirement costs to move to the "guaranteed annuity" of government money.
> 
> So, you would plan to spend it all (or vast majority of it) by age 70 and defer receiving OAS/CPP to get the bonus percentages. I believe it is something like 136% for OAS and 142% for CPP. What would be the issue with CPP if you deferred beyond age 65 as it pertains to max earning years?
> 
> For ourselves, we are planning on taking CPP at 60, but depending on how things go, we could end up deferring OAS.



Seems like a risky approach, CPP and OAS don't give very much, even delaying them to 70. 

Also it seems counter intuitive. The reason for delaying to 70 would typically be if you expect to live a really long life, so you think it will be worth the tradeoff of waiting those extra years for the higher payout. But spending all of your other money first would typically be the strategy of someone who is expecting to die at a younger age.

I recommended the late withdrawal for my in laws, but it was different because they had no retirement savings, so they have to milk what they can out of the government programs.


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## AltaRed (Jun 8, 2009)

Why would one 'exhaust' their investments? Only OAS is affected by clawback and that is income related. Why not become so poor as to collect GIS too?

Drawing down investments (by the amount one would othewise receive from CPP and OAS) to defer CPP and OAS to age 70 might have some net present value but I doubt it. One also has to assume they live past their actuarial age to have a net gain taking the deferment. Seems a 50/50 gamble to me.


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## Dogger1953 (Dec 14, 2012)

janus10 said:


> Just wondering if anyone here knows of someone who has done, or is planning on doing, this. I.e., pretty much exhaust all of your investments to cover retirement costs to move to the "guaranteed annuity" of government money.
> 
> So, you would plan to spend it all (or vast majority of it) by age 70 and defer receiving OAS/CPP to get the bonus percentages. I believe it is something like 136% for OAS and 142% for CPP. What would be the issue with CPP if you deferred beyond age 65 as it pertains to max earning years?
> 
> For ourselves, we are planning on taking CPP at 60, but depending on how things go, we could end up deferring OAS.


As far as delaying CPP beyond age 65, any subsequent low-earnings years wouldn't reduce the calculated CPP amount as they could be dropped out under the "over 65 dropout provision", which is in addition to the general 17% dropout provision.


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## steve41 (Apr 18, 2009)

Say you were 60, just retired, with 1M in your rrsp.

If you forced your rrsp to disappear at the same time your entitlements kicked in, your lifestyle would be pretty wonky:- aftertax spending would be 70K, collapsing to 20K (in today's $).

Not too practical IMHO.


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## twa2w (Mar 5, 2016)

steve41 said:


> Say you were 60, just retired, with 1M in your rrsp.
> 
> If you forced your rrsp to disappear at the same time your entitlements kicked in, your lifestyle would be pretty wonky:- aftertax spending would be 70K, collapsing to 20K (in today's $).
> 
> Not too practical IMHO.


Well not quite. Lets reframe this. 
If this is a couple, their joint OAS would be circa 1400 month if delayed to 70. Their cpp would be 2200 per month or more if they qualify for maximum or near max.
$ 3600 monthly, not a lot of tax, lots of seniors discounts :-D 
So between 60 and 70 they are still active and spend on travel and enjoying life. As they pass the 70 threshold, their health declines and they no longer wish to travel. No longer eat out as much etc. Expenses drop signicantly.
Hell why not.

However the drawback is if one dies, that income is cut in half and will gis top it up? 

If they have a home it could be sold at that time to top up survivor income.

No estate for kids but hell they are better off than you were at their age. 

Just a different spin. I wouldn't do it personally.

Many people spend as much in the first 5-10 years of retirement as they do the entire rest of it.


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## My Own Advisor (Sep 24, 2012)

FWIW, my plan is to take CPP and OAS as soon as I/we can - whatever the rules of the day are. Sure, less money, penalties for early CPP, etc. but I have no idea how long I/we will live. Bird in hand for us.


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## olivaw (Nov 21, 2010)

It would be fun to spend my/our savings by 70 but it seems like a really really bad idea. I'm trying to stretch the money until 95 which can be boring at times.


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## steve41 (Apr 18, 2009)

It is strange that very few people seem to acknowledge (or factor in) the transfer of wealth effect..... namely, passing on an estate or conversely, inheriting one at some future time.


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## AltaRed (Jun 8, 2009)

steve41 said:


> It is strange that very few people seem to acknowledge (or factor in) the transfer of wealth effect..... namely, passing on an estate or conversely, inheriting one at some future time.


Think most people don't anticipate much of an inheritance and/or being disinherited somewhere along the way. Lots of reasons for those currently under 50 or so not to figure that into their plans.


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## ian (Jun 18, 2016)

I have a few relatives who are very close to retirement. They have spent every dime and more. So they will already be in 'negative savings' territory when they retire at 65. They, and many others, may have a slightly different financial challenge.


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## Eclectic12 (Oct 20, 2010)

twa2w said:


> ... Their cpp would be 2200 per month or more if they qualify for maximum or near max.


I suppose it's possible ... but then won't there be more than $1 million in the RRSPs?




twa2w said:


> ... As they pass the 70 threshold, their health declines and they no longer wish to travel. No longer eat out as much etc. Expenses drop signicantly.


Hmmm ... I seem to recall my relatives complaining about their expenses going up as their health declined.


Cheers


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## twa2w (Mar 5, 2016)

Eclectic12 said:


> I suppose it's possible ... but then won't there be more than $1 million in the RRSPs?
> 
> 
> 
> ...


What does cpp have to do with rsp. It does not take a lot of income to qualify for max cpp and rsp balances will depend on their savings rate and investment returns. Remember some one 65 today had a long period when rsp contribution limits were quite low. Many people also don't start saving much for retirement until 40's or 50's if at all regardless of income. This boards posters are exceptional.

If you are low income senior, most costs for health care are covered depending on province. But yes some expenses will go up but not likely as much as travel costs go down. Esp if they are spending 20 or 30 k per year on travel and Florida winters.
With no pension. Rsp limits
1972 20% of earned income to a 
maximum of $4,000
Changed in
1976 20% of earned income to a 
maximum of $5,500
Changed in
1986 20% of earned income to a 
maximum of $7,500
Changed in
1991 18% of earned income to a 
maximum of $11,500
And this is when pa came into effect


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## spirit (May 9, 2009)

Wow.....I am 65 and still working part time.....my DH is coming up 75 and retired. I cannot imagine our lives with our savings depleted....we are still LBOM and putting money aside for a rainy day. Yikes. Well, he IS drawing down his Riff but that's about it.....

The point I am trying to make is....at our ages...we both feel that there are still things we want to do and we have places to spend our money......70 is wayyyy too young to be destitute....only the young think 70 is ancient...if you have your health and are active you will be glad to have money in the bank...if only as a psychological buffer against poverty....brrrr....the sound of that sends shivers down my back.

Please don't take this the wrong way....my 2 cents.....keep working cupcake (;


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## Eclectic12 (Oct 20, 2010)

twa2w said:


> What does cpp have to do with rsp. It does not take a lot of income to qualify for max cpp ...


It doesn't take a lot of income to qualify for max CPP?

From what I understand requires at least 39 years of contributions, at or above YMPE. The last twenty years worth of YMPE does not get one to max benefits where a bit over $881K income is needed to be paid. For two spouses, this would double to a bit over $1.7+ million in income.

http://retirehappy.ca/how-much-will-you-get-from-canada/

That seems to be a lot of income but will depend on what each spouse is making. Or did I miss something?




twa2w said:


> ... rsp balances will depend on their savings rate and investment returns. Remember some one 65 today had a long period when rsp contribution limits were quite low. Many people also don't start saving much for retirement until 40's or 50's if at all regardless of income.


True ... though with both spouses above YMPE, with one likely better, YMMV.


Cheers


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## twa2w (Mar 5, 2016)

Eclectic12 said:


> It doesn't take a lot of income to qualify for max CPP?
> 
> From what I understand requires at least 39 years of contributions, at or above YMPE. The last twenty years worth of YMPE does not get one to max benefits where a bit over $881K income is needed to be paid. For two spouses,...
> 
> ...


My point was YMPE is only about 55,000 in 2016. That is not a lot of income.
My son 21 who just graduated makes slightly more than that.

If he trys to save for a house, buys a house, has kids, saves for education over the next 5. - 10 years how can he have much money to put aside in an RSP. 

Assuming he wasn't upwardly mobile, income wise, and just stayed ahead of the YMPE until he is 65, he would easily qualify for max CPP but could have a pretty modest rsp.

Even if he marries some one in the same position, 2 incomes just above the ympe don't allow for a lot of savings especially if in a major city with high housing costs.. And especially if one spouse takes time out for child rearing. They get an additional 7 years drop out for each child and still qualify for max cpp.

Most of savings would begin in mid to late 40's once house mortgage reduced, kids through school. Etc.

It may be different for DINK's of course.

So qualifying for max CPP does not follow that you have enough income to save a large rsp.


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## AltaRed (Jun 8, 2009)

twa2w said:


> So qualifying for max CPP does not follow that you have enough income to save a large rsp.


Agreed. FWIW, $55k/yr YMPE is almost exactly $26.44/hr based on a 40 hr week. A lot of long time semi-skilled jobs and entry level skilled jobs would fit in that category.


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## Rusty O'Toole (Feb 1, 2012)

I just turned 65 and I get $702 a month in CPP and OAP. Even I can't live on that. I know this is on the low side but I think the max you could get is still under $2000 a month.

Exhausting my savings and spending my investments is scary. If I really wanted to die penniless I would buy a few rental houses and put home equity lines of credit on them. Spend the money and let the tenants pay the payments. Every time real estate went up you could increase the lines of credit.

For example if you had 5 houses worth $200,000 and they went up 5 percent a year, after 5 years the first one would be up $50,000. You could borrow and spend that much. The next year do the same with the second house. Then the third and so on, until 5 years went by and the first house would be ready to borrow on again.

This is a way to pull money out of rental houses that do not have much positive cash flow but can carry a mortgage.

If you live in Vancouver or Toronto, I already know what you are going to say. If you live in the other 99% of the country it may work for you.


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## twa2w (Mar 5, 2016)

Thats assuming you find an equity lender and assuming house prices go up a nice 5% per year.
And assuming either banks or gov don't put further restrictions on equity lending.

Historically housing increases go up at rate of inflation.


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## gibor365 (Apr 1, 2011)

My Own Advisor said:


> FWIW, my plan is to take CPP and OAS as soon as I/we can - whatever the rules of the day are. Sure, less money, penalties for early CPP, etc. but I have no idea how long I/we will live. Bird in hand for us.


This is exactly our approach! Gonna to apply to CPP when I'm 60... 9.5 more years 
On the other hand, OP has a interesting approach ... spend all RRSPs/RRIFs and max and don't touch TFSAs, defer CPP and OAS to 70 y.o. ....Thus at 70 you get max OAS and CPP and GIS , threre are no TFSA clawbacks, so it should be enough money...considering that at 70 you won't spend too much


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## OnlyMyOpinion (Sep 1, 2013)

It's difficult to predict the living changes that might become desirable or necessary in retirement as you pass 60, 70, 80, etc. 
I can offer my parents experience as an example. They 'cashed in' and moved out of the country into a brand new city house around age 70. No mortgage, monthly spending approx. $3k/month. Adequately covered by CPP/OAS, RRIF's and small pension. Still traveled and did what they wanted.
Then at ages in their early 80's, they realized that mobility and health issues meant moving to a retirement apartment made the most sense - no stairs, no maintenance, three dining room meals a day. Monthly budget is now $6k/month, including tax liability for home proceeds that can't be sheltered in TSFA's. House proceeds are what allowed them this option.
Now at ages in their mid-late 80's, continued mobility and health issues (CAPD and Lewy body dementia) mean both moving into a long term care home in the very near future (beware the waiting list!). Not what they or most of us would want, but the only real option. Costs will drop to about $5k/mo to provide for 2 private rooms.
My take away: save as much as you can and hope it is enough that you don't run out and that it allows you to make the living choices you want or need and not the other way around. Have beneficiaries or charities in your will to cover the possibility of having some left over.


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## gibor365 (Apr 1, 2011)

> My take away: save as much as you can and hope it is enough that you don't run out and that it allows you to make the living choices you want or need and not the other way around. Have beneficiaries or charities in your will to cover the possibility of having some left over.


 On the one hand it make sense, on the other hand ... " save as much as you can " , pass away and leave 1 mil in savings?!


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## OnlyMyOpinion (Sep 1, 2013)

gibor365 said:


> On the one hand it make sense, on the other hand ... " save as much as you can " , pass away and leave 1 mil in savings?!


I consider "as much as you can" to be intentionally ambiguous. How much will vary by a person's ability and perceived future needs. I was just trying to point out that it may be difficult to plan and/or predict too far ahead.
I suspect passing away with too much savings may not be a big problem for most of us  Our intention though is to have some 'off-ramps' as we age. E.g. when we hit 72 and have to begin RRSP/RRIF withdrawls, where do our other assets stand and can we safely gift some of those to family at that time. When we are 80, how is our health, living situation, what do we think we will need going forward...

Added: We have our income source and off-ramp intentions documented in our one page _Investment & Retirement Plan_.


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## janus10 (Nov 7, 2013)

CalgaryPotato - good point about it being counter intuitive. It was something I read recently which made me think is there a scenario where this would be appropriate? Perhaps someone with no desire to leave an inheritance and is more comfortable with letting the government "mind their money" as they get older and potentially less capable of managing their own. Not having to worry about whether they can make their money last for an indefinite lifetime, they spend freely but not frivolously. If you retired at 60 with $500k, you could reasonably project withdrawing about $50k/year inflation adjusted until 70. If you and your spouse reached max CPP for age 65 and max OAS eligibility, deferring could get you $55k/year if I have done the math correctly ($573.37/mth*1.36 bonus for OAS + 1065/mth*1.42 bonus for CPP)x2 people x 12 months/year.

AltaRed - "exhaust" meaning that you project that you'll have little need for personal investments once you hand your future over to the government at 70 because it will be more than enough to cover as long as you and your spouse are alive and healthy. A lot of ifs and hopes - hence why I asked if anyone knew of someone thinking in this manner.

Dogger - thanks for confirming that post 65 there is a dropout provision.

Steve41 - with your RRIFmetric software, what about a couple that retires at 60 with $500k and lives to 90 and are entitled to full CPP and OAS but which decide to defer to age 70? Would that resemble a semblance of balance in terms of ATI? Also, regarding transfer of wealth - have you found people are more likely to factor that in if they have benefited from it vs. those that have not? It's possible that I may be the first of my known family to be in a position to do so, but I'm (hopefully) at least 25 years from that.

MOA - we have the same plan. Take both as early as possible. However, since CPP is more than 8 years and OAS is now back to just 13+ (rather than 15+) years away, I reserve the right to change my plan. 

Olivaw - I was wondering if someone thought it was actually a good plan and what the justification/reasoning would be. It's good to test my thinking to uncover new perspectives.


Eclectic - I believe, aside from health, surveys have shown that those who have long retired do see a drop off in discretionary spending as they get into their early 70's. If you don't have a lot of discretionary income, or if you work until you are 70 and then retire, I would guess that those scenarios don't see the same gradual reduction in expenses. Health related costs are a big wild card to be sure. However, I've seen both of my parents have chronic and acute conditions and as of yet it hasn't been a financial disaster. If they needed to move into assisted care, then we would be in a much different situation.

spirit - I certainly understand your thinking. My mom wasn't able to continue to work beyond 62 due to health reasons while my dad retired in his mid 50's with max DB pension from a Big 3 automaker. Together they have enough to live on and don't feel that they are destitute. But, they don't own a home and have almost nothing saved so they are completely dependent on the pension and government programs. My dad would be ok on his own, financially, while my mom would need help from my sister and I. For you and your DH, having your own nest egg must help you sleep at night.

twa2w - even though $55k is not a lot of income (certainly not rich), there are millions of Canadians who make less than that - my daughter, step daughter, step son and wife all fit that category. My daughter just graduated from university, so perhaps in a couple of years she will get there. My step daughter may get there now that she has added a part time job to her full time job - my wife will almost certainly retire having only reached YMPE a couple of times in her life. You can see that the haves are less common than the have-nots: http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/famil105a-eng.htm

OnlyMyOpinion - thanks for sharing your personal story and warnings. My wife often remarks that she doesn't want to get old, but she really means she doesn't want to be a burden to anyone nor wake up day after thinking that there isn't a lot of satisfaction with the way she lives. I thought an article about how elderly Japanese live and see their daily roles and routines very illuminating as to why they typically have very long lives. A sense of purpose and being productive each and every day is their "secret". Did you or an advisor create your 1 page retirement plan?


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## steve41 (Apr 18, 2009)

OK for a 60 yo retired couple- each with 250K in RRSP, living in BC, enjoying a 3% ROR and 2% inflation...... their "die broke at 90" combined ATI would be $50,714.

Their capital would almost run out at age 70..... completely running out at 90.


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## janus10 (Nov 7, 2013)

Thanks, steve41. I bet that took you no time at all using RRIFmetric, right? You used the inputs that I had hoped you would (and I know that you'll default to BC, too).


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## steve41 (Apr 18, 2009)

janus10 said:


> Thanks, steve41. I bet that took you no time at all using RRIFmetric, right? You used the inputs that I had hoped you would (and I know that you'll default to BC, too).


Well.... not with RRIFmetric, but with RRIFmetic. (rhymes with arithmetic.... get it?) No one else does.


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## janus10 (Nov 7, 2013)

steve41 said:


> Well.... not with RRIFmetric, but with RRIFmetic. (rhymes with arithmetic.... get it?) No one else does.


Sorry about that. Well, any publicity is good publicity, right?


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## steve41 (Apr 18, 2009)

I can code. Marketing, not so much.


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## canew90 (Jul 13, 2016)

Go for it if you really think you'll be happy trying to live off cpp & oas, You can add GIS so you'll probably have enough to at least buy basic groceries and live in a low rental.


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## cashinstinct (Apr 4, 2009)

Someone I know is divorced, lived in Canada forever, never worked outside home, had small CPP because of 50% split of the years with ex.... stopped gettting pension from ex at age 60. Now living single in an appartment.

Has a smallish RRSP balance, around 200-250k from the divorce.... TFSA now maxed out. 

Considering number of years with no work / no young child, there was not much difference per month taking CPP at 60 or 65.

Considering the awful effect on GIS of RSSP / RRIF withdrawals, the plan is to maximize full GIS and OAS:
1) Asked for CPP at age 60.
2) RRSP converted to RRIF
3) Empty the RRIF before asking for OAS by making "extra" withdrawals every year, which are saved (either TFSA or non-reg).
4) Each year, maximum allowed is added to TFSA using withdrawals from RRIF and/or non-reg money.
5) Ask for OAS as late as possible to maximize it: ideally 70 years old.

It's not planned in advance, I would recommend someone to save enough not to need GIS for sure.

But with the situation now, I don't see how keeping a smallish RRIF balance would help.


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## janus10 (Nov 7, 2013)

Rusty, if you don't mind sharing, why is your combined CPP and OAS only $702/month? Are you an immigrant with a lot less than 40 years in Canada?


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## humble_pie (Jun 7, 2009)

olivaw said:


> I'm trying to stretch the money until 95 which can be boring at times.



i love this

it would make an ace cmf signature


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## Rusty O'Toole (Feb 1, 2012)

janus10 said:


> Rusty, if you don't mind sharing, why is your combined CPP and OAS only $702/month? Are you an immigrant with a lot less than 40 years in Canada?


Born in Canada and lived here all my life. Had my first full time job at 13 (summers) first permanent full time job at 19. Have been working ever since. 

Mainly because I was self employed and did not contribute a lot and what I did contribute (when I worked for wages) was in the seventies and eighties.


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## ian (Jun 18, 2016)

The plan is not for me. I like Kraft Dinner once in a while but not every day. Same with hot dogs. Cat food is definitely not on the menu. And we like the condo that we currently rent. 

We view GIS and OAS as social programs, not entitlements.

We are not looking for ways to maximize the receipt of either of them. We would prefer to keep our powder dry as it were, keep living the way we currently are in retirement, and remain as independent as possible. We do not view passing some of our resources on to others after our demise as a waste. Our country has been amazingly generous to us in so many ways. We see no reason to take advantage or work the 'system' so to speak.


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## My Own Advisor (Sep 24, 2012)

The thing you have to keep in mind with this strategy, you need to have a reasonable expectation of how long you're going to live. If you have a high-level of confidence you'll see 90, or more, then maybe not a bad play.

Otherwise, take bird in hand - a plan you've paid into (CPP) or payments that come from general revenues (OAS) when you can.


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## amitdi (May 31, 2012)

One strategy will be do not withdraw anything from TFSA as long as you can. So any shortfall you have from CPP/OAS can be filled with non-taxable TFSA.

Thoughts?


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## Daniel A. (Mar 20, 2011)

I think the rules should be changed for GIS qualifying, its a choice to take CPP at sixty with an almost 40% reduction.

GIS should input income based on the maximum at 65 I don't see why the rest of us should be paying welfare to those that are trying to grind the system.


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## My Own Advisor (Sep 24, 2012)

amitdi said:


> One strategy will be do not withdraw anything from TFSA as long as you can. So any shortfall you have from CPP/OAS can be filled with non-taxable TFSA.
> 
> Thoughts?


My general order of wind-down is as follows:

RRSP then non-reg. then TFSA, then house for the old age home if I live that long.


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## GreatLaker (Mar 23, 2014)

This article is a good counterpoint to the take CPP as early as possible / bird in the hand strategy. It is US based so talks about Social Security but the same concept applies in Canada.

The Asymmetric Value of Delaying Social Security Benefits As The Ultimate Hedge



> Despite a growing body of research suggesting that most retirees would benefit by delaying the onset of Social Security payments, the majority who are eligible still elect to begin receiving them as early as possible. In no small part, this appears to be attributable to a “take the money and run” mentality from retirees, who simply don’t see the value of delaying as being worth the risk of foregoing benefits. And without a doubt, there is a material risk that the retiree will not live to the so-called “breakeven point” where the delay in benefits is worthwhile.
> 
> However, what most retirees fail to recognize is that while there is a risk to delaying benefits and never fully recovering them, the upside for living past the breakeven point isn’t just that the money is made back; it’s that the retiree can make exponentially more. And in fact, these asymmetric results – where the retiree only risks a little by delaying, but stands to gain far more in the long run – are further magnified in situations where the client lives dramatically past life expectancy, experiences high inflation, and/or gets unfavorable portfolio returns – which are, in fact, three of the greatest risks to almost every retiree.





> it’s notable that delaying Social Security not only hedges longevity, it also hedges two other adverse scenarios that are otherwise harmful to the retiree: unexpectedly high inflation, and unexpectedly low returns. As noted in the charts above, an adverse outcome with either, or both, can go even further to leverage the value of delaying Social Security, decreasing the breakeven period and increasing the upside for materially outliving life expectancy.
> 
> Which means in the end, the true value of delaying Social Security is a triple-benefit of hedging longevity, poor returns, and high inflation, because of the asymmetrical way that delayed higher benefits compound in the later years.


Delaying may make sense for someone without any indexed pension, since it increases the amount of indexed income that is guaranteed for life. For someone with an indexed pension who can easily live on their pension plus CPP/OAS it makes less sense.


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## Daniel A. (Mar 20, 2011)

I have a DB pension partly indexed, my wife has a DB fully indexed she has been taking CPP since turning 60, I chose to wait and collect the higher amount.
I know there are cases where it makes sense to apply early if one has a family history that suggests 72-77 is the magic number I'd be taking it. 

I don't need the money at this time and very likely will be happy having three or four hundred more a month five years from now. 
Giving up that extra indexing every year adds up, combined with the higher amount sounds like a nice winter vacation somewhere warm in later years.


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## PrairieGal (Apr 2, 2011)

Daniel A. said:


> I think the rules should be changed for GIS qualifying, its a choice to take CPP at sixty with an almost 40% reduction.
> 
> GIS should input income based on the maximum at 65 I don't see why the rest of us should be paying welfare to those that are trying to grind the system.


I see what you are saying, and I tend to agree with you. 

I also think that business owners who have elected to take dividends instead of wages, and not paid into CPP (thereby having lower taxable retirement income) should be exempt from GIS.

Qualifying for GIS should probably be a means test rather than an income test.


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## bass player (Jan 27, 2016)

Daniel A. said:


> I have a DB pension partly indexed, my wife has a DB fully indexed she has been taking CPP since turning 60, I chose to wait and collect the higher amount.
> I know there are cases where it makes sense to apply early if one has a family history that suggests 72-77 is the magic number I'd be taking it.
> 
> I don't need the money at this time and very likely will be happy having three or four hundred more a month five years from now.
> Giving up that extra indexing every year adds up, combined with the higher amount sounds like a nice winter vacation somewhere warm in later years.


I look at it the other way...I retired at 53 (now 54) and will be taking early CPP at 60. I know that once I pass a certain age (around 74) that I will pass the break-even point, but I'm fine with that. I will have 14 years to enjoy the extra money, and if I make it to 74 then I'll simply be happy that I'm still alive.

I retired early to enjoy life, and early CPP is part of it. If you have enough to live on, a few extra dollars at 74 is highly overrated.


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## 1980z28 (Mar 4, 2010)

Retiring in 8 months at the age of 56,will take CPP at 60 and OAS at 65,will need savings to last for 35 years


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## olivaw (Nov 21, 2010)

1980z28 said:


> Retiring in 8 months at the age of 56,will take CPP at 60 and OAS at 65,will need savings to last for 35 years


I retired at 56. My wife and I will probably also take CPP at 60 and OAS at 65. Like you, savings will have to last for 35 or more years. A joint annuity is not out of the question.


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## aB01 (Sep 11, 2013)

"exhaust all saving" .. doesn't have to mean spend it all.
I have heard stories from my parents of people essentially hiding money under their mattress.
No income, so max OAS/GIS.

No idea how a 'means' test would work.


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## janus10 (Nov 7, 2013)

bass player said:


> I look at it the other way...I retired at 53 (now 54) and will be taking early CPP at 60. I know that once I pass a certain age (around 74) that I will pass the break-even point, but I'm fine with that. I will have 14 years to enjoy the extra money, and if I make it to 74 then I'll simply be happy that I'm still alive.
> 
> I retired early to enjoy life, and early CPP is part of it. If you have enough to live on, a few extra dollars at 74 is highly overrated.


I'm right there with you. Definitely hoping to retire no later than 53 which is two years from now.

No work pension, just RRSPs, TFSA and margin accounts. And house equity which were hope to partially release through downsizing.

Take all government benefits as soon as available.


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## bass player (Jan 27, 2016)

janus10 said:


> I'm right there with you. Definitely hoping to retire no later than 53 which is two years from now.


Congratulations...I hope you achieve your goal.

My other thought to early CPP is that it's almost a 100% guarantee that I will be physically and mentally more capable of enjoying the extra money from age 60 to 74, then I will be from 74 onwards. Holding out for more money doesn't mean much if can't spend it when it finally arrives.


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## Amythyst (Aug 3, 2016)

Both hubby and I will wait to take CPP...until 65 and maybe later. We have enough funds and want to increase our indexed amounts for later in life. My father just passed away at 83, we were paying $195 a day for long term care as there was a two year waiting list for government subsidy on the home I wanted for him. It really helped that he had some decent pensions along with savings.....otherwise he would have ended up in a shared room at a less than desirable institution.
People are living longer and longer. We have enough money now (retired, 59 years of age) in pension income and interest to live far better than when we worked but that pension will be reduced at 65. We will travel and play...and when we are 65 we will travel and play even more. This winter it's Mexico for five weeks and Vietnam in the spring for 12 days.
And the original thread...ugg, no way would I want to rely on OAS and the GIS to get by. We know people in that very situation...NO THANKS
And the intent of GIS was to really help those who need it, not those who find the loopholes to use the system.


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