You might feel like you’re on track for retirement, you’ve saved, invested, and done everything right. But without a coordinated plan, you could still be leaving hundreds of thousands of dollars on the table.
In this real-life case study, we’ll show how two smart strategies helped one couple save over $900,000 in taxes and fees, while gaining peace of mind and the freedom to enjoy retirement on their terms.
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Their Situation
Steve (60) is still working.
Donna (62) is retired.
They’ve been working with a family friend for many years but never created a formal retirement plan. Their concerns:
- Do we have enough to retire?
- Are mutual funds still the best option?
Here’s what their financial picture looked like:
- Donna: $700K in savings + $1M LIRA (from a pension)
- Steve: $450K RRSP + $50K TFSA
- Joint Home: $700K value with $150K mortgage
- Combined Net Worth: $2.7 million
Their retirement goal: Spend $82,200/year (adjusted for 4% inflation) and retire comfortably. Donna had already started CPP; Steve planned to take CPP at 64 and OAS at 65.
The Original Plan
With no formal withdrawal strategy, their advisor had simply let things ride. Based on a conservative 5% return and 2% home appreciation, their estate value after taxes was projected at $3.2 million.
But without action, there was a looming problem: A massive tax bill at death.
A Smarter Strategy: Start Withdrawals Early
The biggest issue? Their RRSPs and LIRA accounts were growing untouched, creating a “Registered Tax Bomb.”
Here’s why:
- When Donna passes away, her RRSP and LIRA can roll to Steve tax-free.
- When Steve passes away, the entire remaining value is taxed as income in the year of death.
- If he has $2M in registered accounts, much of it is taxed at 50%.
To avoid this, we recommended:
- Start drawing from registered accounts now
- Take advantage of Donna’s low tax bracket while she’s retired
- Withdraw up to $74K annually (still taxed at lower rates)
- Reinvest unused withdrawals into a TFSA or other tax-efficient vehicles
Result: Their estate value increased from $3.2M to $3.5M, a $300,000 tax savings.
The Second Strategy: Reduce Fees
Steve and Donna were paying 2% in mutual fund fees on $2.2M in assets, that’s $44,000/year.
We proposed switching to low-cost ETFs, which can mirror market performance for as little as 0.25%.
- New total fees: $5,500/year
- Annual savings: $38,500
- Over time, with lower fees and better performance (+0.5%), their estate value grew to $4.2M
Total net gain:
- $300K from tax planning
- $600K+ from reducing fees and boosting returns
- Over $900,000 in value created
Final Thoughts
Without a plan, Steve and Donna still would’ve “been fine.” But with one, they unlocked hundreds of thousands in additional value, and found clarity in how to spend, give, and live more fully in retirement.
They now have:
- Confidence in their long-term plan
- A strategy to minimize taxes
- A low-cost investment structure
- A roadmap to help their kids, grandkids, and community
Small adjustments, huge results.
If you’re wondering what a coordinated retirement plan could do for you, we’d be happy to help. Come visit our website and book a free appointment with us.
