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Rita*, 61, and Darcy, 60, built half their careers in the United States and the other half here in Canada. They now live and work in Quebec. The bulk of their retirement savings are in U.S. employer-sponsored retirement plans and they are both eligible for Social Security and Quebec Pension Plan (QPP) benefits.

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Ideally, Darcy would like to step away from his full-time job within the next year. Rita plans to continue in her current job until age 65.

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They worry that while Rita is a dual citizen, Darcy is not and is a Canadian citizen. It is their understanding that if Rita dies before Darcy, he would have to live in the U.S. for six weeks a year to qualify for survivor benefits as a non-citizen. “Is this a cause for concern?”

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Darcy earns $150,000 a year before tax and Rita earns $45,000. They will each receive defined-benefit pension plan benefits indexed to inflation from their Canadian employers when they retire. At age 65, Darcy will receive $10,800 a year from these plans, plus $7,200 in QPP benefits. Rita will receive $4,500 a year from her employer pension plan and $4,560 a year in QPP payments.

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At age 62, they are each eligible for Social Security. Darcy will receive the equivalent of $25,000 a year and Rita the equivalent of $29,000. “How will this impact QPP and Old Age Security (OAS),” asked Rita. “And when is the best time to start taking (these)?”

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The couple owns a home valued at $700,000 with a $230,000 mortgage at 3.75 per cent. They have no plans to move for at least the next several years. Their investment portfolio includes about $100,000 in registered retirement savings plans (RRSPs), $15,000 in tax-free savings accounts, about $25,000 in stocks and US$950,000 in 403(b) tax-sheltered annuity plans.

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“Should we move the U.S. accounts to Canada and put that money into RRSPs? What are the tax implications? Or should we start withdrawing from them? And if so, when and should I draw mine down first, as my income is lower than Darcy’s?” asked Rita. “Our investment adviser has recommended a cross-border tax adviser to do an assessment, which will cost $15,000. Is this fee typical for this type of assessment?”

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Rita and Darcy also have a $650,000 term-life insurance plan and two $100,000 whole life insurance plans, and Darcy also has $350,000 of life insurance through his employer, but it will stop when he retires. “Are we over-insured?” asked Rita.

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Rita and Darcy would also like to know if they should consider cashing in some of their stocks, the cash value of their life insurance or maybe even some of the 403(b) assets to pay off the mortgage. From a peace of mind standpoint, they feel it would be nice to put the mortgage payments toward new savings or simply reduce their cost of living.

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The couple’s annual cash flow is about $90,000, an amount they anticipate will likely stay the same in retirement.