The Ten Years Before Retirement

Build the map, while you still have time to change it

This is the only phase where you still have real room to manoeuvre. Most people spend it watching a balance grow. The work here is to find out what that balance actually produces as monthly income after tax — because a $1.5 million RRSP and $1.5 million of spendable money are not the same thing.

• Build a complete income map: CPP, OAS, pension, RRSP/RRIF, TFSA, non-registered, rental, part-time work — every source, every amount, every tax treatment
• Work out your real retirement expenses. A budget, not a guess
• Max the TFSA every year. Tax-free income in retirement is worth more than it looks
• If you have a defined benefit pension, get the commuted value and the monthly income options in writing
• If you own a corporation, decide now whether it is being sold, wound down, or kept — the tax planning differs enormously

Shape the tax before it is fixed

By now the size of your retirement is roughly set. What is still movable is how much of it you keep. Most of the levers that matter here need several years to work, which is exactly why this phase gets skipped.

• Balance RRSPs between spouses, so retirement income can be split rather than stacked on one return
• Model what your RRIF minimum withdrawals will look like at 71 — if the number alarms you, this is when there is still time to do something
• Review your asset allocation for sequence-of-returns risk, without swinging so conservative that inflation eats the plan
• Reassess life, disability and critical illness cover — what you needed at 45 is rarely what you need now

Lock the sequence — some of these you only choose once

This phase is about decisions rather than accumulation, and several of them are effectively irreversible. Made deliberately, they are worth a great deal. Made by default, they are expensive and cannot be undone.

• Model CPP at 60, 65 and 70 against your own numbers and health, then choose on purpose
• Decide the order you will draw from: RRSP/RRIF, non-registered, TFSA, corporation
• Make your pension election with the modelling done — commuted value versus monthly income is usually a one-time, permanent choice
• Know where the OAS clawback threshold sits and whether your planned income crosses it
• Sort out benefits that end with employment: drug, dental and health coverage, and what replaces them

Your highest-leverage tax year

The year you stop working is usually the strangest tax year of your life: part of a salary, possibly severance or vacation payout, and the first withdrawals from savings. Small differences in timing across a single December can be worth a great deal.

• Where severance or a payout can straddle two tax years, work out which side it belongs on
• Do not start drawing from registered accounts on autopilot before the year's income is known
• Convert unused RRSP room deliberately — a final contribution is sometimes worth far more this year than last
• Set up the actual mechanics: which account pays the bills, and how money moves each month

The cheap window almost everyone wastes

This is the phase people get most wrong, and it is worth the most. If you retire before CPP and OAS begin, you may have several years of unusually low taxable income. That is the cheapest your RRSP will ever be to empty.

The instinct is to leave the RRSP alone as long as possible. The result is a large balance forced into RRIF minimum withdrawals at 71, landing on top of CPP and OAS at the worst possible rate — and often triggering clawback. Drawing that same money down earlier, in the quiet years, can save tens of thousands over a lifetime.

• Draw RRSP income deliberately in the low-income years, at the lowest rate you will ever see
• Keep an eye on where each year's total income lands relative to the clawback threshold
• Revisit it every year — this is not a decision, it is an annual habit