{"id":520217,"date":"2026-06-26T21:55:10","date_gmt":"2026-06-26T21:55:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/520217\/"},"modified":"2026-06-26T21:55:10","modified_gmt":"2026-06-26T21:55:10","slug":"shaye-62-expects-to-lose-her-job-next-year-should-she-retire-or-look-for-another-role","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/520217\/","title":{"rendered":"Shaye, 62, expects to lose her job next year. Should she retire or look for another role?"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Shaye has a registered retirement savings plan valued at $350,000 and a tax-free savings account valued at $227,000.James Paddle-Grant\/The Globe and Mail<\/p>\n

Shaye is 62 years old and earns $95,170 a year in the educational field.<\/p>\n

The funding for her position ends next year, so she is wondering if she can afford to retire then or if she should look for another job.<\/p>\n

If she retires, she\u2019ll be entitled to a defined benefit pension of about $48,000 a year, partly indexed to inflation.<\/p>\n

Shaye lives with her common-law spouse in a house that belongs to him. They share living expenses but keep their finances separate.<\/p>\n

Shaye has a house of her own, valued at $450,000, in small-town Ontario, that she rents out for $2,750 a month. She plans to sell the house and use the proceeds for investments when she retires.<\/p>\n

Shaye has one child, 32, who she is helping financially and for whom she would like to leave an inheritance. Shaye\u2019s retirement spending goal is $75,000 a year after tax, rising with inflation.<\/p>\n

\u201cWhat would my retirement look like in April, 2027 at the age of 63?\u201d she writes in an e-mail.<\/p>\n

We asked Chris Tringham, a portfolio manager and certified financial planner at Park Place Securities in Kingston, Ont., to look at Shaye\u2019s situation. Mr. Tringham also holds the chartered financial analyst designation.<\/p>\n

What the expert says<\/p>\n

Shaye asks if she can comfortably afford to retire next year or if she should work until she\u2019s 65.<\/p>\n

In addition to her house, which she plans to sell, Shaye has a registered retirement savings plan valued at $350,000 and a tax-free savings account valued at $227,000. These accounts are invested in growth mutual funds with an average management expense ratio of 2.31 per cent.<\/p>\n

What\u2019s the most tax-efficient way for Sonali, 70, to draw funds as her husband needs more health care?<\/a><\/p>\n

Shaye is active and healthy and her family has a history of longevity. \u201cWe assume a life expectancy of 93 and also assume that Shaye will defer her Canada Pension Plan benefits to age 70,\u201d Mr. Tringham says. Deferring CPP to age 70 typically means that individuals will receive more in the long-run if they live past the age of 82 than they would receive by starting CPP at age 65.<\/p>\n

\u201cBased on these assumptions, Shaye will be in great shape to retire in 2027,\u201d Mr. Tringham says. Her defined benefit pension in addition to RRSP withdrawals will cover her income needs. The first year of retirement will be funded from her pension of $47,796 and RRSP withdrawals of $54,873. She\u2019ll pay $21,660 in income tax, leaving her with $81,035, giving her a small buffer. <\/p>\n

Mr. Tringham assumes Shaye starts Old Age Security benefits at 65, and that inflation averages 2.1 per cent a year.<\/p>\n

The long-term rate of return on her investments is estimated at 6 per cent based on a portfolio of about 60-per-cent equities, including non-conventional assets, and 40-per-cent fixed income. This assumes fixed income returns of 4 per cent and stock returns of 7 per cent.<\/p>\n

He assumes that her TFSA is preserved and the RRSP is drawn down each year up to the Old Age Security clawback income threshold. For 2027, the clawback starts at an annual income of $95,323.<\/p>\n

\u201cIn this scenario, her assets will not be depleted in her lifetime and an estate would be left to her son or any charities that she designates,\u201d the planner says.<\/p>\n

Shaye\u2019s existing portfolio is more aggressive than the one outlined above.<\/p>\n

\u201cI am concerned that the fees and the risk allocation in Shaye\u2019s investment accounts are not in line with her expectations,\u201d Mr. Tringham says. Shaye describes herself as a cautious investor and was surprised to see that her current portfolio is 90-per-cent equities. She was also disappointed to hear that the management expense ratio she is paying is higher than a typical portfolio. \u201cI would advise that she look for ways to move to a more balanced portfolio with lower fees,\u201d Mr. Tringham says.<\/p>\n

After paying off a large debt, can Ivan, 63, retire this year?<\/a><\/p>\n

Next, the planner looked at the sale of Shaye\u2019s house.<\/p>\n

Shaye owns a single-family residence that she rents for $2,750 a month. She estimates that the home could be sold for $450,000. After subtracting property tax, repairs and maintenance and utilities, there is not much cash flow left over, the planner says. \u201cIf she sold the property, she would invest the proceeds in a conservative portfolio of income-generating assets to support her retirement.\u201d <\/p>\n

Selling the property and investing the proceeds in a non-registered account will enhance her financial situation significantly. This would allow her to spend more in retirement, give more generously to her son or have extra money available for future health care expenses such as a retirement home or long-term care.<\/p>\n

Calculating capital-gains tax in this situation is complex, the planner says. The Canada Revenue Agency considers the date that Shaye moved out of the property to be the date that it was disposed of at fair market value, or FMV. However, Shaye can file for an extension of four years as long as she didn\u2019t claim any capital cost allowance, or depreciation, and declared all rental income in her tax return.<\/p>\n

The years between initial purchase and the disposition are tax-free because of the principal residence exemption. The period between initial renting and eventual sale in 2027 will determine any capital gains tax owing, Mr. Tringham says. If the FMV when she moved out was $400,000 and the property is sold in 2027 for $450,000, then the capital gain will be $50,000. Half of this \u2013 $25,000 \u2013 is included in income. So at a marginal tax rate of 40 per cent, for example, she would owe capital-gains tax of $10,000.<\/p>\n

\u201cThe best time to sell the property is the calendar year that she retires,\u201d the planner says. This would ensure that any potential capital-gains taxes are paid in a year when her taxable income is lower. \u201cSelling the property as soon as possible would also give the proceeds of the sale more time to grow in an investment account.\u201d<\/p>\n

Shaye currently gives $300 a month to her son and would like to give him more if possible, the planner says. Selling the property would allow her to give more generously to help with day-to-day expenses and potentially a first home purchase.<\/p>\n

Shaye is living in a house owned by her common-law partner and will not own it after her partner dies. \u201cShe is included in the will and expects to receive $200,000 to help with finding a new residence, such as a condo,\u201d the planner says.<\/p>\n

He assumes that the $200,000, generating conservative returns, will be sufficient to pay her rent for the remainder of her life. Or if she wanted to purchase a condo, she would have sufficient assets in her non-registered account to make up the difference. \u201cFor example, a $400,000 condo would be funded by $200,000 from her partner\u2019s estate and $200,000 from her non-registered account, and she could still draw $75,000 a year income for the rest of her life.\u201d<\/p>\n

Client situation<\/p>\n

(Income, expenses, assets and liabilities provided by the applicant.)<\/p>\n

The person: Shaye, 62, and her son, 32.<\/p>\n

The problem: Can she afford to retire next year or will she have to find new work?<\/p>\n

The plan: Retire next year, drawing from her RRSP to supplement her pension. Take steps to shift to a more suitable and less expensive investment portfolio.<\/p>\n

The payoff: A secure and comfortable retirement.<\/p>\n

Monthly after-tax income: $5,785 (excluding rent).<\/p>\n

Assets: RRSP $350,000; TFSA $227,000; rental property $450,000. Total: $1,027,000.<\/p>\n

Estimated present value of her defined benefit pension: $741,960. This is what someone with no pension would have to save to generate the same retirement income.<\/p>\n

Monthly outlays: Property tax $400; water, sewer, garbage $60; home insurance $50; electricity, heating $70; maintenance, garden $450; transportation $265; groceries $425; clothing $150; gifts, charity $300; vacation, travel $1,000; personal care $100; dining out, entertainment $350; pet expenses $100; health care $125; communications $190; RRSP $500; TFSA $500; pension plan contributions $750. Total: $5,785.<\/p>\n

Liabilities: None.<\/p>\n

Want a free financial facelift? E-mail finfacelift@gmail.com<\/a>.<\/p>\n

Some details may be changed to protect the privacy of the people profiled.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Shaye has a registered retirement savings plan valued at $350,000 and a tax-free…\n","protected":false},"author":2,"featured_media":520218,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[72,176,2726,61,60,174,175],"class_list":["post-520217","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-finance","tag-financialfacelift","tag-ie","tag-ireland","tag-personal-finance","tag-personalfinance"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/520217","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=520217"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/520217\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/520218"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=520217"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=520217"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=520217"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}