Retire 6 Years Sooner with a Smarter Withdrawal Strategy

March 19, 2025

How to Retire 6 Years Sooner with a Smarter Withdrawal Strategy? That’s exactly what David and Carla discovered when they sought a second opinion on their retirement plan.

Despite saving nearly $3 million, their original financial advisor told them they’d need to work six more years.
By reevaluating their spending, real estate, and withdrawal strategies, they found a way to retire much sooner, without sacrificing their lifestyle.

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Meet David and Carla

David (59) and Carla (57) live in Manitoba.
Their financial situation included:

David’s TFSA: $135,000
David’s RRSP: $675,000 (+$10,000/year contributions)
Carla’s TFSA: $127,000
Carla’s RRSP: $340,000
Joint Non-Registered Account: $240,000
Primary Home: Valued at $850,000
Phoenix Property: Valued at $450,000

David hoped to retire by age 61, but their initial retirement plan was only 72% funded, meaning they’d run out of money unless David worked until 65.

The Initial Problem: Retirement Was Underfunded

Their advisor’s recommendation?

Work longer.
Delay retirement.
Keep saving aggressively.

But when we looked deeper, we found hidden opportunities that could help them retire 6 years sooner with a smarter withdrawal strategy

1 . Misunderstanding Real Spending Needs

David and Carla wanted to spend $10,000 per month in retirement, but not all of it was permanent:

$8,000/month: Core living expenses (groceries, taxes, entertainment)
$2,000/month: Travel fund (planned until age 75)

By separating travel from essential expenses, the long-term spending projections looked much better — increasing their funded ratio to 84%.

2. Ignoring Their Phoenix Property Equity

David and Carla owned a $450,000 property in Phoenix, but their plan assumed they’d hold onto it forever.
Since they only planned to travel until 75, selling the Phoenix property at 75 made sense.

Selling the property injected a large amount of cash into their non-registered account, boosting their funded status to 105%.

How to Retire 6 Years Sooner with a Smarter Withdrawal Strategy

The biggest opportunity came from changing their withdrawal plan:

Originally, they were draining their TFSAs first (a very tax-inefficient strategy).
Instead, they should draw aggressively from their RRSPs early in retirement.

This new strategy works by:

Drawing RRSPs first spreads taxable income over more years.
Prevents large RRSP balances from triggering huge taxes at death.
TFSAs, being tax-free, are preserved for later years.

By paying a little tax now instead of a lot later, they increased their net estate by $479,000 — and most importantly, funded their retirement at 111%.

What Happened When They Adjusted Their Plan

Scenario	Result
Original Plan (Work to 65)	72% funded
Adjusted Spending & Property Sale	105% funded
Smart RRSP Withdrawal Strategy	111% funded

David could retire at age 61 comfortably. If he wanted to retire even earlier at age 60, the plan was still 102% funded, and they still had the flexibility to downsize or access home equity later if needed.