Ingrid* is stressed. She is 68, retired, and on her own since her husband died seven years ago. Her current income is just enough to cover expenses with “little left.” But she wants to undertake a major renovation of her home and make sure her portfolio is able to generate at least $80,000 after tax for the next 27 years.

Ingrid’s current monthly pre-tax income includes her employer pension of $1,350,

Canada Pension Plan

(CPP) of $1,385 and

Old Age Security

(OAS) of $650. Her OAS payments were clawed back in July 2025 and she is not sure if there will be a further reduction in July 2026. Her current monthly expenses are just over $2,700. She also withdraws $2,000 a month pre-tax from her

registered retirement income fund

(RRIF) to cover large annual costs, such as car and home maintenance and tax bills.

Ingrid’s home in British Columbia is valued at $1.5 million. She has no mortgage and no plans to move. The renovations she wants to make will cost about $600,000, which she will fund from her portfolio.

Ingrid’s investment portfolio includes $657,000 in a

registered retirement savings plan

(RRSP), $229,000 in a RRIF, $295,000 in a

tax-free savings account

(TFSA) and $1.2 million in a non-registered account. The RRSP and TFSA are 100 per cent invested in equities. The RRIF is invested in 28 per cent equities and 72 per cent fixed income, and the non-registered account is 83 per cent invested in equities and 17 per cent invested in fixed income.

How can she ensure her portfolio generates her desired income for the next 30 years?

What the expert says

“Ingrid has a more robust financial standing than she knows. The problem is she does not seem to have a comprehensive retirement income plan that clearly outlines how to co-ordinate future income streams from all sources to support her preferred retirement lifestyle,” said Eliott Einarson, a retirement planner at Ottawa-based Exponent Investment Management.

“Retirement income planning is essentially about meeting future spending needs from all cash flows. Her total income target of $80,000 after tax is reasonable considering her assets and other income sources. Part of her concern likely comes from her modest pension and some clawback of Old Age Security benefits,” he said.

“With a net income target of $80,000 a year avoiding any OAS clawback will mean controlling her taxable income. Currently, for July 2026 through June 2027 the OAS clawback rate of 15 cents applies to every dollar over net world income exceeding $93,454. Avoiding this ‘recovery tax’ as it’s called, may require a variety of strategies that are going to be different for everyone based on their situation. For Ingrid, structuring non-registered asset allocation to minimize fully taxable passive income or even adjusting how some of her retirement income is designed may come into play. A retirement income plan can illustrate her financial future and a co-ordinated approach to her investment management to ensure tax efficiency and flexibility, and provide confidence that her financial future is secure.”

Einarson described the planning process as a conversation that leads to visualizing what is possible graphically and numerically, given a person’s goals, assets and income sources. Clearly seeing an overview of her future income and that income’s effect on current assets is key.

“Seeing on paper how her income needs can be met while her net worth grows and future tax liability declines over time, will allow Ingrid to feel less stressed and more confident about retirement. She will also understand she can afford both her preferred lifestyle and the home renovations.”

After an initial calculation, Einarson said she can meet her total income needs and do so fully matching inflation to age 95. About half her income would come from pension and government benefits and the other half from her registered investment income, with perhaps some modest dividend income from her non-registered investments.

“With a balanced asset allocation and an assumption of returns averaging three per cent over inflation, Ingrid can expect to have depleted her registered accounts over the next 30 years. This will allow the capital in her non-registered investments and TFSA to continue to grow giving her maximum flexibility and tax efficiency,” he said.

“This means Ingrid can comfortably use half her non-registered account for the home renovations and does not need to count on high investment returns to meet her future needs. Having less tax-exposed assets after the renovation expense and an investment approach that looks at the whole picture for efficiency would also likely mean no OAS clawback.”

Einarson recommended she have her different investment accounts managed in a way that takes her whole income tax situation into account.

“Strategic planning demonstrates that aligning asset allocation with her retirement income requirements for each account is more effective, particularly by placing investments with higher tax exposure into tax-advantaged accounts.”

Given her asset level, Einarson suggests using a company that provides both comprehensive and ongoing financial planning coupled with portfolio management, offering fiduciary oversight and a transparent fee arrangement. Opting for this approach, where adviser and portfolio manager work together, would benefit her more than relying on guesses and experiencing ongoing stress.

“The retirement plan will provide her with greater assurance regarding her future and give her the confidence to take on the renovation project.”

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*The name has been changed to protect privacy.

Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you starting out or making a change and wondering how to build wealth? Are you trying to make ends meet? Drop us a line at wealth@postmedia.com with your contact info and the gist of your problem and we’ll find some experts to help you out while writing a Family Finance story about it (we’ll keep your name out of it, of course).