Ep 196 - What Should You Do With Your Money at 60? The Canadian Retirement Plan I'd Use

What should Canadians do when they turn 60 and start thinking seriously about retirement? In this episode, Joe Curry walks through the exact retirement income planning framework he would use if he were turning 60 today, covering CPP timing, RRSP and RRIF withdrawal strategies, tax-efficient investing, and portfolio design. Learn how to use your 60s as a powerful planning decade to reduce lifetime taxes, maximize retirement income, and create more financial freedom throughout retirement.

Key Takeaways

Your 60’s may be the most important retirement planning decade. Many Canadians have more control over their taxable income in their 60s than at any other point in retirement. This creates valuable opportunities for tax planning before CPP, OAS, and RRIF withdrawals begin.

CPP timing is about more than just maximizing benefits. Taking CPP early provides income sooner, but delaying CPP can significantly increase your guaranteed, inflation-adjusted lifetime income. The right decision depends on your health, assets, goals, and overall retirement plan.

A CPP bridge can help you delay benefits without reducing spending. Using a portfolio bridge or a term-certain annuity can allow you to maintain your retirement lifestyle while waiting for larger CPP benefits later.

Strategic RRSP withdrawals can reduce lifetime taxes. Instead of leaving your RRSP untouched until mandatory RRIF withdrawals begin, drawing funds during lower-income years may help reduce future tax bills and potential OAS clawbacks.

Retirement portfolios need both stability and growth. A well-designed retirement portfolio balances a "defense bucket" for near-term spending needs with an "offense bucket" designed to protect purchasing power over a retirement that could last 30 years or more.

Insights Worth Sharing

“Your 60s might be the most important planning decade of your whole retirement.”

“Waiting on CPP doesn’t mean spending less today. It means buying yourself a bigger pension tomorrow.”

“The difference between planning your 60s deliberately and letting them happen can be hundreds of thousands of dollars.”

“Too conservative can be risky when retirement lasts 30 years.”

“The goal isn’t financial security for its own sake. It’s the freedom to enjoy the years you’re healthy enough to live fully.”

Why Your 60s Could Be the Most Important Retirement Planning Decade

When most Canadians think about retirement planning, they focus on saving and investing. But once you reach your 60s, the conversation changes.

At this stage, the most important question often isn't how much you've saved. It's how efficiently you turn those savings into sustainable retirement income. In many cases, your 60s represent a unique planning window. You may be retired or semi-retired, but you haven't yet started collecting CPP, OAS, or mandatory RRIF withdrawals. That creates something valuable: flexibility.

For a brief period, you may have more control over your taxable income than you'll ever have again. One of the biggest decisions during this decade is when to start CPP. While many Canadians automatically begin collecting benefits at age 60 or 65, the reality is much more nuanced. Delaying CPP can substantially increase your lifetime income because benefits continue to grow and remain indexed to inflation.

For healthy retirees with sufficient assets, delaying CPP often functions like purchasing a larger pension backed by the federal government. Of course, delaying benefits requires a plan for generating income in the meantime. This is where a CPP bridge can become an effective strategy. By drawing from a dedicated portion of your portfolio - or in some cases using a term-certain annuity - you can maintain your lifestyle while waiting for enhanced government benefits later.

Another often-overlooked opportunity involves RRSP withdrawals. Many retirees leave their RRSP untouched until they're forced to convert it to a RRIF and begin mandatory withdrawals. While that approach feels simple, it can create larger tax bills later in retirement. CPP, OAS, and RRIF income can stack together, potentially pushing retirees into higher tax brackets and increasing exposure to OAS clawbacks.

Instead, strategic withdrawals during lower-income years may help smooth taxes over your lifetime. In many cases, excess withdrawals can be redirected into Tax-Free Savings Accounts or non-registered investment accounts to create additional flexibility later on.

Portfolio structure also becomes increasingly important. Traditional rules of thumb often encourage retirees to become more conservative as they age. However, retirement today can easily last 30 years or longer. Too much conservatism can expose retirees to inflation risk and gradually erode purchasing power. A more effective approach is often to separate retirement assets into two functions. A defense bucket provides stability through cash, GICs, and high-quality fixed income investments. An offense bucket focuses on long-term growth through globally diversified equity investments. Together, these components help support spending needs while giving investments time to grow.

Ultimately, successful retirement planning isn't about making one perfect decision. It's about coordinating CPP timing, RRSP withdrawals, tax planning, portfolio construction, and retirement income strategies into a single integrated plan.

The Canadians who get the most from retirement aren't always the ones with the largest portfolios. They're often the ones who use their 60s intentionally.

Because retirement planning isn't just about protecting money. It's about creating the freedom to spend time doing what matters most with the people who matter most.

Learn more about our retirement planning process at MatthewsAndAssociates.ca