# Last year before retirement. What do I need to do?



## TomB16 (Jun 8, 2014)

I was on a trajectory to retire in 2019 but my father recently passed and we've decided to pull the plug at the end of 2017. We would retire now but there are tax advantages to begin selling our real estate in 2018 when I will not be working. I might as well finish the work year.

I want to be as efficient as possible.

What do I need to do to prepare?


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## AltaRed (Jun 8, 2009)

Efficient as in what? How? You don't provide any information for anyone to comment on... other than yes, it could be wise to defer a bunch of cap gains from investment RE to 2018 when you will/could/might be in a lower marginal tax bracket than in 2017.

What happens when you quit working at the end of 2017? Where does your cash flow come from? Savings? Investment income? DB pension? Crystallizing some withdrawals from an RRSP each year? Is your RRSP fully funded? TFSA fully funded?


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## My Own Advisor (Sep 24, 2012)

I was going to ask the same questions...

Lots of consider!

I would add:
-Can you fund basic expenses based on your dividends/distributions/other from capital alone?
-If not, what have you selected as your initial draw down rate? How did you arrive at that number?
-What accounts will you draw down first? Why? How did you arrive at that priority? (e.g., registered before non-registered?)
-What do you have in place in terms of healthcare insurance?
-Life insurance?

In terms of preparation, likely a revised IPS.

Great place to be in Tom, jealous


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## AltaRed (Jun 8, 2009)

Added: If you don't have a HELOC and want to have one in place just in case you might need it in the future, do it while you still have employment income (before you retire).... OR if you have a lot of money in investments, e.g. $500k in brokerage assets, banks will be glad to extend a HELOC anyway.


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## Mukhang pera (Feb 26, 2016)

AltaRed said:


> Efficient as in what? How? You don't provide any information for anyone to comment on...
> 
> What happens when you quit working at the end of 2017? Where does your cash flow come from? Savings? Investment income? DB pension? Crystallizing some withdrawals from an RRSP each year? Is your RRSP fully funded? TFSA fully funded?


True, virtually zero information provided. But, maybe then, there is a surfeit of info. A bit of reading between the lines is required. Father passed. Tom inherits Vancouver house worth $5 million. Hence a good start to retirement.


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## Eder (Feb 16, 2011)

Sorry to hear about your dad...happy to hear you will pull the plug early. After 8 years of retirement these are the things I wish I had done differently.

1.Retire even earlier
2.Put everything other than RRSP & TSFA money into a joint Investors Edge account.
3.Start my RRIF right away.
4.Eliminate any fiscal ties and responsibilities to my previous business.
5.Did I mention retire earlier?


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## TomB19 (Sep 24, 2015)

Thank you for the info provided. The help is appreciated.

I'm not comfortable sharing personal financial and net worth info on the internet. I was hoping for more broad ideas, such as the good heloc info.

No 5m house in Vancouver. No inheritance but I will be selling 1 or two properties per year for several years. We've done well.

I come from poverty so I feel financially successful. Being poor when you are young is an excellent motivator.

At this point, I have no idea why we planned to work so long. Money will not be an issue and it wouldn't have been for some time. We will be saving money in our retirement and we have no children.

My car is a 10 year old VW and I just got it. We love it. Its in amazing condition but I've done the timing belt and all service, etc. It's the first leather interior I've ever owned.

We have the power of being happy in a non consumerist lifestyle. My wife taught me this.

We got to where we are by prioritizing spending on productive assets. That includes distributing stock, property, etc. I often feel that I can't afford to go out for lunch but I don't think twice about buying end mills for my CNC equipment or sheet goods for a new kitchen in a Reno property.

I plan to carry on with a small business but most of the work will probably be charity work. 

I don't know what else i can share. It's a matter of having my perspective and priorities changed by a life event so I need some new plans.


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## CalgaryPotato (Mar 7, 2015)

Condolences over the loss of your father.

I'm confused, why do you have 2 different accounts?

Anyway, from this post and what I've seen of your previous posts, you are clearly a high net worth family. You probably want to find a good tax consultant who can work with you on all of the details on how to best optimize your property sales, RRIF withdrawals, timing of taking CPP & OAS.

Also by the sounds of it, your retirement plan will have money to spare. You seem to be quite philanthropic, I'm assuming you've started to give thought to what you want to happen to any leftover money, possibly a charity if not extended family?


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## Mukhang pera (Feb 26, 2016)

TomB16 said:


> What do I need to do to prepare?





TomB19 said:


> At this point, I have no idea why we planned to work so long. Money will not be an issue and it wouldn't have been for some time. We will be saving money in our retirement and we have no children.
> 
> I plan to carry on with a small business but most of the work will probably be charity work.
> 
> I don't know what else i can share. It's a matter of having my perspective and priorities changed by a life event so I need some new plans.


Tom, you are getting some financial advice here, but I am not sure that is what you asked for or need.

You say money will not be an issue and, indeed, you will be in the happy position of having money surplus to your needs - you say you'll be saving in retirement. So it seems you are not seeking direction re finances. But you ask: "What do I need to do to prepare?"

It also appears you have answered your own question, at least in part. Small business and charity work. It sounds like the business is operational now, so you already know what it's about. So, are you looking for more ideas about how to use your time? You do not mention your age bracket, region where you live or much else, so apart from some general ideas about finances, I am not sure how much useful info people here can provide.


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## My Own Advisor (Sep 24, 2012)

No need to share details Tom.

It seems you've started to think through a number of things, which is great.

"My car is a 10 year old VW and I just got it. We love it."

You strike me as frugal or thrifty, this will serve you well in retirement. It also sounds like you have money to spare, well done. Maybe you need to "prepare" for how to spend since you've saved so much. A good problem to have. Enjoy


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## ian (Jun 18, 2016)

Apart from all the usual it appears that you may have some taxable capital gains coming up.

I would thinking about looking for a good tax accountant, a CPA, to give you advice on the most tax efficient way to move forward. Clearly your property disposal decisions should be based on market and business issues but setting up a tax strategy for the next few years may result in some savings. 

I would also consider looking into a fee for service financial advisor. Forget the free bank investment advisor route. They will give you a haircut on the management fees etc. They are sales people who, because of their employment and remuneration, place the bank's interest well ahead of your own.

I would consider thinking about getting a proper will in place or up to date if you have one.

Don't make any sudden lifestyle decisions. Things change when you retire. Remain flexible from both a financial and a lifestyle perspective.


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## MrsPartridge (May 15, 2016)

You might want to pop over to the library and get Daryl Diamond's book* Your Retirement income blueprint*. It's a good read on how to manage your different streams of income. CPP, OAS, investments, etc.


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## gibor365 (Apr 1, 2011)

Eder said:


> Sorry to hear about your dad...happy to hear you will pull the plug early. After 8 years of retirement these are the things I wish I had done differently.
> 
> 1.Retire even earlier
> 2.Put everything other than RRSP & TSFA money into a joint Investors Edge account.
> ...


Nice advises  . especially I like 3. , gonna start my RRIF first year I don;t have income...


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## humble_pie (Jun 7, 2009)

TomB19 said:


> We have the power of being happy in a non consumerist lifestyle. My wife taught me this.




hey tomB i think that if you can say the above, then you already own your retirement!

you can be happy without consuming things
ie you are flexible
you adapt well
judging from the glimpses of work history you've offered this forum, you are resourceful, resilient, capable & entrepreneurial as well.

i like the plan to do some charity work. My own experience has been that, after donating stocks to big charities (hospitals, university) for a number of years, i stumblerd upon emerging charities. These are the most fun, because they are almost exactly the same as emerging startup businesses. Both require realistic budgets, convincing performance goals, trustworthy management plus funding from outsiders. In fact, sometimes the same gummint programs provide financial assistance to both!

my sense is that tomB, with his extensive experience in real estate, is someone who could make a difference to charities operating in the real estate sector. Enterprises like cooperative housing initiatives for young families ... rehabilitation of deteriorated sections in city cores & downtowns ... trade school programs for disadvantaged or at risk youth ... there's no end to venues that could benefit from tomB's wisdom & experience.

don't forget politics, tom. Perhaps i'm wrong but i've always perceived you as a small-c conservative. Often these persons are fiscally conservative but socially fair-minded & moderate, ie they have a lot to offer to the sharing community that is canada.


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## Mukhang pera (Feb 26, 2016)

Interesting how this goes.

The OP's first post, starting this thread, shows him (on my computer) as a newbie, with 4 posts to his credit. Hence my comment about not knowing much background against which to give advice. 

Now I see his second post to this thread as giving him credit for 801 posts, which reveals him (as hp's post reveals) as someone here with some background. Perhaps a function of my aging iMac computer. The doggone thing as getting nigh on 9 years old! 

I keep watching MacRumours.com to see when the next update for iMacs is coming. That last was almost 2 years ago. I want to buy a new one, but I don't plan to buy one 2 years old. Apple only supports their equipment with new software for a fixed period, so timing one's purchase is important. I regularly now get websites telling me I need to update my browser, but that is no longer possible. My Apple laptop is much more recent and does not pose that problem, but I use it only for travel. I find using a laptop on a regular basis to be a pain.


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## Emjay85 (Nov 9, 2014)

Mukhang pera said:


> Interesting how this goes.
> 
> The OP's first post, starting this thread, shows him (on my computer) as a newbie, with 4 posts to his credit. Hence my comment about not knowing much background against which to give advice.
> 
> ...


TomB16 was the OP and newbie, TomB19 chimed in later on and has the 801 posts. You're computer seems to be working just fine!

They could be the same person, different user name?


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## Mukhang pera (Feb 26, 2016)

Emjay85 said:


> TomB16 was the OP and newbie, TomB19 chimed in later on and has the 801 posts. You're computer seems to be working just fine!
> 
> They could be the same person, different user name?


Thanks Emjay. I overlooked the 16/19 nuance. I think in part because when 19 chimed in, he appeared to be speaking as 16, saying thanks for the input. And hp spoke of him in terms suggesting he has a long and venerable history here and much known about him.

I think this is a thread I was never intended to join. I dwell in a different universe.


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## humble_pie (Jun 7, 2009)

Mukhang pera said:


> Thanks Emjay. I overlooked the 16/19 nuance. I think in part because when 19 chimed in, he appeared to be speaking as 16, saying thanks for the input. And hp spoke of him in terms suggesting he has a long and venerable history here and much known about him.
> 
> I think this is a thread I was never intended to join. I dwell in a different universe.




there is a tomB16/tomB19 glitch. there's probably nothing wrong with your machine, mukhang


.


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## Mukhang pera (Feb 26, 2016)

humble_pie said:


> there is a tomB16/tomB19 glitch. there's probably nothing wrong with your machine, mukhang
> 
> .



Thanks, hp. More likely it's me. Getting on in years, like my machine. Time to get myself back to the factory for an overhaul. I need to upgrade. Install a new chip or two upstairs, add more RAM, a hard drive upgrade, maybe a new fusion drive. Once that's done, I can assess what else needs to be rebuilt/replaced to get me through a few more years.


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## humble_pie (Jun 7, 2009)

Mukhang pera said:


> Thanks, hp. More likely it's me. Getting on in years, like my machine. Time to get myself back to the factory for an overhaul. I need to upgrade. Install a new chip or two upstairs, add more RAM, a hard drive upgrade, maybe a new fusion drive. Once that's done, I can assess what else needs to be rebuilt/replaced to get me through a few more years.



me i think your current model is OK. You know how i think you are a fine seagoing_wolf, still limber & swimming well even if a few gray hairs appear in the fur pelt here or there.

the problem was really caused by ole Tom himself, it looks as if he spun off a junior clone with the same language signature.

.


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## Mukhang pera (Feb 26, 2016)

humble_pie said:


> me i think your current model is OK. You know how i think you are a fine seagoing_wolf, still limber & swimming well even if a few gray hairs appear in the fur pelt here or there.
> 
> the problem was really caused by ole Tom himself, it looks as if he spun off a junior clone with the same language signature.
> 
> .


Well thanks for that hp! Yes, a few gray hairs infiltrating the ole pelt, but still swimming like a young seagoing wolf!


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## TomB19 (Sep 24, 2015)

humble_pie said:


> the problem was really caused by ole Tom himself....


Indeed. Both accounts are mine. There are no deliberate bad intentions. I apologize for the confusion.

I had a tough time getting TomB19 to work on TapaTalk so I ended up creating a second account. That was some time ago and I had since forgotten.

There is a ton of great advice in here. I will action some of it, for sure. Thank you to everyone who responded.

Also, thank you for the kind words. I've learned a lot from this web site and I am grateful for the individuals here who have generously shared themselves with the community.

I feel I owe a little more information to the group and perhaps make a hack attempt at sharing my story for the purposes of inspiration. My entire life has been driven by the energy gained from inspiration. Nothing more. I will attempt to give back a tiny amount.

... but, right now, I am no fire with a bunch of life obligations so I hope to come back to this thread in a week or two.


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## TomB19 (Sep 24, 2015)

8 days left.

We are goin through some mixed emotions.

I have learned that my wife wanted to retire years ago but was being supportive by not saying anything while I have worked.

A week ago, the idea was pretty daunting. Today, I'm starting to feel liberated.

Also, I'm starting to think my wife might have been right about retiring before now.

What a ride. I'm beginning to realize how insignificant money is in this decision. It seemed so important;. Now it seems that it was an excuse.

Merry christmas, CMFers. May you all be happy and healthy.


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## OptsyEagle (Nov 29, 2009)

TomB19 said:


> 8 days left.
> 
> We are goin through some mixed emotions.
> 
> ...


Yes. The lucky ones are the ones where their workplace makes the decision for them. I am surprised how many people thought they had to work 5 more years or something like that and get laid off. All of a sudden they see clearly that they had enough money all along. The problem was just the uncertainty. That uncertainty is usually gone once they see that the alternative is not just doing the same thing they did yesterday, but now they would need to brush up a resume, go to multiple interviews, deal with all the stupid questions and the rejections, etc. All of a sudden the uncertainty of retirement becomes much more welcome then the certainty that surrounds the garbage involved in continuing to work.

In everyone of those cases, that I have seen, they had no problem in retirement. They were just nervous and all they needed was a little push.

Your problem is that you are allowed to defer a decision where there will never be enough information to be sure it is the right one. People tend to want to defer those decision. It is natural.

In my time retired, I have had a few boring days, but not one of them ever made me feel that I should go back to work, to do something that I really don't get much out of, for someone who probably doesn't appreciate it, for more hours in the day, then I would rather allocate to it. I also look at it that I am allocating hours of my life, that I cannot ever get back, for money that I probably do not need. I need the time, not the money. When you are young with lots of time and no money, things are much different. When you are older, it all reverses. You shouldn't pay that high of price (your remaining time) to solve a little boredom. Going to the movies is a lot cheaper.


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## olivaw (Nov 21, 2010)

TomB19 said:


> 8 days left.
> 
> We are goin through some mixed emotions.
> 
> ...


Merry Christmas Tom and congratulations on the upcoming retirement. As one of my buddies likes to say: _You made it_. I think you'll love being retired because you will find ways to keep yourself busy.


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## kcowan (Jul 1, 2010)

olivaw said:


> Merry Christmas Tom and congratulations on the upcoming retirement. As one of my buddies likes to say: _You made it_. I think you'll love being retired because you will find ways to keep yourself busy.


In Mexico, the term for retired is Jubilado, in other words jubilant! They use retirado to describe gringos. Me I am jubilado.


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## diharv (Apr 19, 2011)

OptsyEagle said:


> Yes. The lucky ones are the ones where their workplace makes the decision for them. I am surprised how many people thought they had to work 5 more years or something like that and get laid off. All of a sudden they see clearly that they had enough money all along. The problem was just the uncertainty. That uncertainty is usually gone once they see that the alternative is not just doing the same thing they did yesterday, but now they would need to brush up a resume, go to multiple interviews, deal with all the stupid questions and the rejections, etc. All of a sudden the uncertainty of retirement becomes much more welcome then the certainty that surrounds the garbage involved in continuing to work.
> 
> In everyone of those cases, that I have seen, they had no problem in retirement. They were just nervous and all they needed was a little push.
> 
> ...


That is best post/response I have ever read on CMF . I think that it is correct to say that there will never be enough info for one to decide that the time to retire is the right time. It is really a leap of faith. I plan to be done by 55 or 56 and for all those people that whine "what are you gonna do ?" (as if one can't ask that same question at 60 , 65 , 70 or 75) , my stock answer is "whatever I want " . But I think I'll memorize that last paragraph above also !


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## TomB19 (Sep 24, 2015)

I really appreciate the information in this thread. Thank you.

Also, I appreciate the direct support and kind words.

As for the screen name situation, some days I am in the mood for a 6 while other days I want a 9.


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## TomB16 (Jun 8, 2014)

OK, let me be a little less flip...

There are some really powerful words on CMF, written by great people. IMO, the stock picks, analysis, and predictions are barely a side-show to the support that comes from this peer group. At least, that's how I feel about it. If CMF didn't exist, I could invest and make a lot of money just fine.

Thank you for the help. Anyone in a similar situation to ours will do extremely well to read the wisdom that has been so generously shared in this thread.

As for the screen name, I am a nerd with a ton of devices. Two of those devices use the account TomB19 while the rest use TomB16. It all stems from a time I couldn't log into TomB19 from a new phone. There is no nefarious intent nor do I mask the fact that both accounts are mine. I apologize for the confusion I have caused.


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## ian (Jun 18, 2016)

Several year prior to early retirement we spent some time going through our banking and our investments. We spent some time to clearly understand the costs, especially the hidden costs. We compared our returns to the best in class benchmarks. It was precipitated by the exercise of stock options that yielded a good part of cash that secured our early retirement. Bottom line was we fired our bank, our stock broker and completely re-arranged our affairs. The payback over the past six years from this work has been substantial in terms of financial and peace of mind. Included in this was some forward tax planning as well as a review of, and amendments to, past tax returns.

The best piece of advice we got was not to make any big life changing retirement decisions prior to or shortly after retirement. Wait a year or so. For us, this turned out to be spot on. The only decision we made was to downsize and sell our home and decide at a later point about where we wanted to live, should we rent, buy, and if so what type of home.

Our outlook did change after six months. But looking back over the past few years of retirement it changed again. We are so glad that we did not commit to any big changes such as buying a retirement home or moving to a new locale. One huge change was an almost complete de focus on 'things' in favour of a focus on experiences. Of course, everyone had different aspirations for retirement so our experiences will no doubt be different than those of others.


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## AltaRed (Jun 8, 2009)

ian said:


> The best piece of advice we got was not to make any big life changing retirement decisions prior to or shortly after retirement. Wait a year or so. For us, this turned out to be spot on. The only decision we made was to downsize and sell our home and decide at a later point about where we wanted to live, should we rent, buy, and if so what type of home.
> 
> Our outlook did change after six months. But looking back over the past few years of retirement it changed again. We are so glad that we did not commit to any big changes such as buying a retirement home or moving to a new locale. One huge change was an almost complete de focus on 'things' in favour of a focus on experiences. Of course, everyone had different aspirations for retirement so our experiences will no doubt be different than those of others.


All that is pretty standard, and wise, advice. My experience was a lot different but I knew it was coming. Retired as an ex-pat in the USA in 2006 at age 57, so by need, we re-located to our AB home city the day after retirement, Also, by design, my spouse and I were going different directions and we each bought our own houses, and finalized a divorce shortly thereafter. Then I entered a new relationship and when she retired in 2013, we took up house together in yet another province. Really dramatic changes, some of which were pre-planned, and others that came out of left field. It has worked out for us but a key reason was money/finances were never going to be an issue when that adventure started in 2006, and had things not worked out, then we had the ability to do a reset. 

Think we are on track to live out our lives in a stable form, albeit we will have to dump the big house at some point, e.g. 5-10 years health permitting. I will want to do it sooner than my better half (I am ready now to escape the boat anchor). We will address it when we need to do so.


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## kcowan (Jul 1, 2010)

ian said:


> Several year prior to early retirement we spent some time going through our banking and our investments. We spent some time to clearly understand the costs, especially the hidden costs. We compared our returns to the best in class benchmarks. It was precipitated by the exercise of stock options that yielded a good part of cash that secured our early retirement. Bottom line was we fired our bank, our stock broker and completely re-arranged our affairs. The payback over the past six years from this work has been substantial in terms of financial and peace of mind. Included in this was some forward tax planning as well as a review of, and amendments to, past tax returns.
> 
> The best piece of advice we got was not to make any big life changing retirement decisions prior to or shortly after retirement. Wait a year or so. For us, this turned out to be spot on. The only decision we made was to downsize and sell our home and decide at a later point about where we wanted to live, should we rent, buy, and if so what type of home.
> 
> Our outlook did change after six months. But looking back over the past few years of retirement it changed again. We are so glad that we did not commit to any big changes such as buying a retirement home or moving to a new locale. One huge change was an almost complete de focus on 'things' in favour of a focus on experiences. Of course, everyone had different aspirations for retirement so our experiences will no doubt be different than those of others.


Sounds like it mirrors our experience when finally retiring. We have many experiences, mostly in Mexico and Europe. But the focus on simplifying in all matters was common.



AltaRed said:


> Retired as an ex-pat in the USA in 2006 at age 57, so by need, we re-located to our AB home city the day after retirement, Also, by design, my spouse and I were going different directions and we each bought our own houses, and finalized a divorce shortly thereafter. Then I entered a new relationship and when she retired in 2013, we took up house together in yet another province. Really dramatic changes, some of which were pre-planned, and others that came out of left field.


Yup. Changed jobs, changed spouses, changed provinces...all since retiring for the first time. 25 years ago now!


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## newfoundlander61 (Feb 6, 2011)

I can't remember where i read this but living for a few years as if you are retired is a good idea before you actually retire. Then the change over is seemless and you have no big surprises. This may be a little harder to do than saying but an interesting way to look at it and prepare for retirement.


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## kcowan (Jul 1, 2010)

Sounds like a pipe dream to me! You would need an exceptional employer to allow you to
work from home
take a couple of months to travel
work from the south for 4 months?


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## Eclectic12 (Oct 20, 2010)

YMMV ... my sister as well as a couple of friends have employers that allow them to sign up to have their salary reduced for five years then be paid while they are off for a year.

My employer has the same program but the director has to approve it instead of a sign up.


Cheers


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## kcowan (Jul 1, 2010)

We have a friend that did this. He worked at a university and had to get approval. They travelled the world for 10 months. After that they had the retire early bug and are now retired.


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## james4beach (Nov 15, 2012)

OptsyEagle said:


> In my time retired, I have had a few boring days, but not one of them ever made me feel that I should go back to work, to do something that I really don't get much out of, for someone who probably doesn't appreciate it, for more hours in the day, then I would rather allocate to it. I also look at it that I am allocating hours of my life, that I cannot ever get back, for money that I probably do not need. I need the time, not the money. When you are young with lots of time and no money, things are much different. When you are older, it all reverses. You shouldn't pay that high of price (your remaining time) to solve a little boredom. Going to the movies is a lot cheaper.


Thanks for this, OptsyEagle. This is one of my favourite CMF posts of all time.

As a young guy around here, I continue to be inspired by what many of you write and share. There's lots of wisdom in these posts!


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