{"id":768313,"date":"2026-06-29T06:46:19","date_gmt":"2026-06-29T06:46:19","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/768313\/"},"modified":"2026-06-29T06:46:19","modified_gmt":"2026-06-29T06:46:19","slug":"my-husband-and-i-are-both-75-with-1-5-million-invested-and-500k-in-cash-is-that-too-much-liquid-capital-to-hold","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/768313\/","title":{"rendered":"My husband and I are both 75 with $1.5 million invested and $500k in cash \u2014 is that too much liquid capital to hold?"},"content":{"rendered":"

\"Retired<\/a> Retired male\/female couple sitting at kitchen table looking over financial papers with a calculator and laptop nearby <\/p>\n

My husband and I, both 75, have $1.5 million still invested and close to $500,000 sitting in cash. Is that too much cash, even at our age? <\/p>\n

It’s a question that many cash-comfortable retirees quietly wrestle with. And it’s one worth taking seriously: as Canadians are living longer, even those in their 70s and 80s need to keep thinking about whether their money is still working for them. <\/p>\n

The hypothetical scenario above \u2014 a couple, both 75, with $1.5 million in a registered investment account and $500,000 sitting in a high-interest savings account or cash equivalent, plus a pension \u2014 may look well-off on paper. But is that half-million sitting idle actually making the situation better? Financial advisors say: probably not. <\/p>\n

Don’t Miss Keeping $500,000 in the bank isn’t putting needed money to work <\/p>\n

When cash accumulates in savings without a clear purpose, it tends to lose its value quietly over time \u2014 and inflation is the culprit. Canada’s Consumer Price Index (CPI) rose 2.1% on an annual average basis in 2025 according to Statistics Canada (1), and while that pace is relatively moderate, the compounding effect on a large cash balance over 10 to 20 years is significant. <\/p>\n

“Cash is important in retirement, but too much can become a problem,” says Stacey Stark, founder of Aurelia Capital Advisors. “Cash provides stability and liquidity, but inflation can erode purchasing power over time. Most retirees benefit from balancing cash reserves with investments that help maintain long-term growth and income.” <\/p>\n

In Canada, the most common vehicle for keeping large cash balances is a high-interest savings account (HISA) or a Guaranteed Investment Certificate (GIC). As of June 2026, the best GIC rates in Canada (2) range from 2.45% to 4.05% for 1- to 5-year terms, while HISA rates range from 0.15% to 4.50%<\/a> depending on promotional offers. Even at the higher end, these rates barely keep pace with inflation and offer little in the way of long-term growth. <\/p>\n

Make your savings work harder. Open a self-directed investing account with CIBC Investor’s Edge<\/a> \u2014 low fees, powerful tools, and control over your future. <\/p>\n

How long do Canadians actually live? The numbers may surprise you <\/p>\n

One reason some retirees underestimate how much they need is that they also underestimate how long they’ll need it. According to StatCan (3), in 2023 a Canadian woman aged 65 could expect to live another 22.3 years, with a Health-Adjusted Life Expectancy (HALE) of 15.8 years. A man the same age could expect another 19.7 years and a HALE of 14.7 years. That puts average life expectancy at age 65 well into the mid- to late 80s. <\/p>\n

For a couple both aged 75, the planning horizon isn’t five years. It may be 15 or 20. That’s long enough for inflation to substantially erode the real value of a $500,000 cash position, and long enough to benefit meaningfully from a more diversified approach. <\/p>\n

Read more: 3 essential money moves to make once you’ve saved $50,000<\/a> <\/p>\n

The Canadian context: RRIF rules, CPP and OAS <\/p>\n

For Canadian retirees, the stakes around cash management are shaped by a distinct set of rules and income sources. <\/p>\n

Most significantly, anyone who converted their Registered Retirement Savings Plan (RRSP) into a Registered Retirement Income Fund (RRIF) must make minimum annual withdrawals, whether they want to or not. The Canada Revenue Agency (CRA) sets the prescribed withdrawal factor by age. At 75, the factor is 5.82%, meaning a $500,000 RRIF would require a minimum withdrawal (4) of $29,100 that year. These withdrawals are fully taxable as income. <\/p>\n

This matters for cash planning: retirees with large RRIFs are already being required to draw down registered savings. Holding an additional $500,000 in non-registered cash \u2014 especially when it’s earning less than inflation \u2014 may represent a missed opportunity to either reduce the tax hit on RRIF income or to deploy capital more efficiently. <\/p>\n

On the income side, Canadian retirees at 75 are likely already receiving Canada Pension Plan (CPP) and Old Age Security (OAS) payments, both of which provide a reliable baseline of guaranteed income. With those government sources and potentially a pension, a large cash reserve becomes even less critical as a day-to-day safety net. <\/p>\n

What to do instead: put the cash to work, strategically <\/p>\n

For older retirees sitting on large cash reserves, you may want to consider allocating a portion to a long-term care insurance policy. In Canada, long-term care insurance (LTCI) helps pay for care services that provincial health care doesn’t cover \u2014 things like home support workers, assisted living or nursing home stays. In 2021, the Canadian Medical Association estimated that the combined annual cost of long-term care and home care in Canada would reach $58.5 billion by 2031<\/a>, and yet most Canadians have no financial plan to cover it. <\/p>\n

Long-term care insurance premiums are not tax-deductible for individuals in Canada (5) \u2014 they cannot be used to reduce your taxable income. However, premiums paid for qualifying plans may be claimable under the Medical Expense Tax Credit (METC) (6), which reduces the tax you owe rather than your income directly. As for the benefits paid out: if you purchased the policy personally and paid premiums with after-tax dollars, the benefits are generally received tax-free. If an employer paid the premiums on your behalf, the benefits would typically be taxable income (7). Always consult a tax professional, as your specific policy and situation will determine the tax treatment. <\/p>\n

For Canadian retirees who want predictable income without worrying about market performance, a joint life annuity \u2014 one that continues paying as long as either spouse is alive \u2014 can be a powerful complement to CPP and OAS. The remainder could be kept liquid for unexpected expenses. <\/p>\n

For cash that isn’t earmarked for a specific purpose, Canadian retirees might consider alternatives that offer better returns without requiring a long investment horizon: GIC ladders (spreading cash across GICs with different maturities, typically 1 to 5 years, to maintain rolling liquidity), conservative dividend-paying Canadian equity exchange-traded funds (ETFs), or Canadian corporate bonds held inside a TFSA, where interest income is sheltered from tax. <\/p>\n

What Canadians can do: 5 steps to make retirement cash work harder <\/p>\n

If you’re holding more cash than you need in retirement, consider these steps: <\/p>\n

Know your RRIF floor. If your investment accounts are held in a RRIF, calculate your annual minimum withdrawal obligation using the CRA prescribed factor for your age. This is money you must take out each year regardless \u2014 so plan around it. <\/p>\n

Map your income against your needs. Add up your guaranteed income sources: CPP, OAS, any workplace pension and RRIF minimums. If your basic expenses are covered, the argument for holding $500,000 in cash weakens significantly. <\/p>\n

Consider a GIC ladder. Instead of leaving large sums in a savings account, spread cash across GICs with staggered maturities (1, 2, 3, 4 and 5 years). This gives you predictable returns and rolling access to funds without locking everything in at once. <\/p>\n

Explore long-term care insurance. Canada’s public health system covers basic medical care, but not the full cost of personal care, home support or a private nursing home room. An LTCI policy can protect your retirement savings from being depleted by care costs \u2014 and your heirs from inheriting a reduced estate. <\/p>\n

Talk to a fee-only financial advisor. If emotional factors are driving your cash position, a fee-only planner (one who doesn’t earn commissions on products they recommend) can help you develop a withdrawal and allocation strategy that feels safe while also working smarter. <\/p>\n

What To Read Next <\/p>\n

The most expensive financial mistakes are often the ones you don’t see coming. Join 19,000+ Canadians who get the money moves, risks and opportunities shaping their finances \u2014 delivered free each week. Subscribe now.<\/a> <\/p>\n

Article Sources <\/p>\n

We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines<\/a>. <\/p>\n

Www150 Statcan Gc (1<\/a>), (3<\/a>); Ratehub (2<\/a>); Rbcwealthmanagement Bynder (4<\/a>); Olympiabenefits (5<\/a>); Sunlife (6<\/a>), (7<\/a>) <\/p>\n

This article originally appeared on Money.ca<\/a> under the title: My husband and I are both 75 with $1.5 million invested and $500k in cash \u2014 is that too much liquid capital to hold?<\/a> <\/p>\n

This article provides information only and should not be construed as advice. It is provided without warranty of any kind. <\/p>\n","protected":false},"excerpt":{"rendered":"Retired male\/female couple sitting at kitchen table looking over financial papers with a calculator and laptop nearby My…\n","protected":false},"author":2,"featured_media":768314,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[45,49,48,4191,273037,31327,33192,50],"class_list":["post-768313","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-ca","tag-canada","tag-canadians","tag-cash-equivalent","tag-cash-reserves","tag-savings-account","tag-statistics-canada"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/768313","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=768313"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/768313\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/768314"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=768313"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=768313"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=768313"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}