Ep # 145 - How to Tap Into Retirement Funds Without Derailing Your Plan
Joe and Lindsay explore smart strategies for accessing cash in retirement without derailing your financial plan. They discuss emergency funds, home equity lines of credit (HELOCs), tax-efficient RRSP and RRIF withdrawals, and the importance of flexible retirement income planning. Whether it’s a surprise expense or a major purchase, learn how to stay prepared and keep your retirement on track.
Key Takeaways
· Emergency Funds Still Matter in Retirement
· Cash Wedges Offer Flexibility
· HELOCs as a Backup Tool
· Plan Ahead for Tax Efficiency
· Flexibility is Key to Financial Resilience
Ideas Worth Sharing
“It’s not just about having enough money—it’s about having access to it when you need it.”
“Your emergency fund is about peace of mind, not a one-size-fits-all number.”
“A HELOC isn’t debt—it’s a backup plan for when life throws a curveball.”
“Holding too much cash can quietly sabotage your retirement income plan.”
“Smart withdrawals in low-tax years create flexibility and save money down the road.”
Resources
Checklist: “9 Ways to Access Cash in Retirement Without Derailing Your Plan”
Listeners can request this resource by emailing: info@retirementplanningsimplified.ca. It summarizes the key strategies discussed in the episode and offers a practical checklist for planning ahead.
How to Access Cash in Retirement Without Derailing Your Plan
Retirement planning isn’t just about building enough savings—it’s about making sure you can access that money when life throws you a curveball. Whether it’s a sudden home repair, a new car, or a once-in-a-lifetime opportunity, having a plan for unexpected expenses is crucial. In a recent episode of Your Retirement Planning Simplified, host Joe Curry and cohost Lindsay Wilson break down the most effective ways retirees can tap into cash without jeopardizing their long-term financial goals.
The Emergency Fund & “Sleep-at-Night” Number
Traditionally, financial advisors recommend maintaining an emergency fund of three to six months’ worth of expenses in a high-interest savings account. This advice still applies in retirement—but with a twist. Many retirees have what Joe refers to as a “sleep-at-night” number: a personal dollar amount they like to see set aside to feel financially secure. That might be $20,000, $50,000, or even $100,000 depending on the individual. The key is balancing peace of mind with smart planning—too much cash sitting idle can reduce the long-term sustainability of your retirement income.
Use a Cash Wedge Strategy
If you're concerned about overspending from an easily accessible savings account, a cash wedge inside your non-registered investment account could be the solution. A cash wedge is a designated amount of conservative assets—like cash or GICs—within your investment portfolio, held specifically for short-term spending needs. This allows you to access funds when needed without having to liquidate long-term investments at a bad time or face unnecessary tax consequences.
Establish a Home Equity Line of Credit (HELOC)
One of the most overlooked tools for retirees is a home equity line of credit. Even if you never use it, setting up a HELOC while you’re still in good financial standing gives you flexibility later on. Because it’s secured against your home, a HELOC typically offers better rates than a personal loan. It can be used for emergencies, big purchases like a vehicle, or as a buffer when markets are down and you don’t want to sell investments at a loss. Best of all, it doesn’t count as debt unless you use it.
Plan Ahead with Strategic RRSP and RRIF Withdrawals
Many retirees have the bulk of their savings in RRSPs or RRIFs, which are fully taxable upon withdrawal. To avoid tax surprises and increase flexibility, Joe recommends taking strategic withdrawals during low-income years—such as the early years of retirement or before starting CPP and OAS. Moving funds into a TFSA or a non-registered account can provide liquidity for future large purchases, tax-free.
Build Flexibility into Your Plan
The bottom line? Even the best retirement income plans can be derailed without flexibility. Whether through an emergency fund, a cash wedge, a HELOC, or tax-smart withdrawal planning, having multiple ways to access cash helps protect your investments and your lifestyle.