Many Canadians approaching retirement wonder if their savings will be enough. In this case study, we look at whether a retired couple with $750,000 in savings can fund a comfortable retirement. This is part of our ongoing “Can You Retire” series.
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Their Situation
Mr. and Mrs. Wilson are both retired. Mr. Wilson is 67, and Mrs. Wilson is 68. Together, they have:
- $200,000 in Mr. Wilson’s RRIF
- $100,000 in his TFSA
- $350,000 in Mrs. Wilson’s RRIF
- $100,000 in her TFSA
- A mortgage-free home valued at $450,000
Their total retirement savings equal $750,000, and their net worth is approximately $1.2 million.
They both receive CPP and OAS, bringing in just over $42,000 per year. Mr. Wilson gets $1,050/month from CPP, and Mrs. Wilson receives just over $1,100/month. Both receive $686/month in OAS.
Scenario 1: Flat Spending Until Age 90
In the first scenario, the couple spends the same amount each month until age 90. The analysis shows they could afford to spend about $5,600 per month in today’s dollars. By age 90, they would have no savings left, but their home—growing at an estimated 3% annually—would be worth $920,000.
Scenario 2: The Go-Go, Slow-Go, No-Go Approach
This more realistic scenario reflects how many retirees actually spend:
- $7,200/month from age 67 to 74 (Go-Go Years)
- $5,400/month from 74 to 84 (Slow-Go Years)
- $4,000/month from 84 to 90 (No-Go Years)
This plan allows more spending early on while they are active, without running out of money. At age 90, their home would again be worth $920,000.
Scenario 3: Withdrawing Only from RRIF First
In this variation, the couple leaves their TFSA untouched and draws only from their RRIF accounts first. This strategy slightly reduces their estate taxes later on.
By 2041, their estate would be about $3,000 larger than under the previous strategy. If they both passed away early in retirement, this approach would leave more for their heirs by reducing the taxable value of the RRIFs over time.
Scenario 4: Selling the Home
In the final scenario, the couple chooses to spend down all of their assets, including the value of their home.
- $8,500/month until age 76
- At 76, they sell their home
- $6,000/month from 76 to 90 (which would need to include rent)
This plan assumes no desire to leave an inheritance. It maximizes spending but requires downsizing or renting in later years.
Final Thoughts
So can you retire on $750,000? It depends on how much you want to spend, your assumptions around inflation and investment returns, and whether you want to preserve an estate.
With careful planning, the Wilsons could fund a retirement that suits their needs. The right withdrawal strategy can also reduce taxes and improve outcomes.
If you’re approaching retirement and want clarity about what’s possible, have a look at our website and book an appointment with us.
