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Caroline* is 62, single and planning for retirement in three years. She purchased her forever home, a condo in Vancouver, two years ago. It is valued at $600,000 and the $300,000 mortgage is up for renewal March 2027, at which time Caroline hopes to secure a lower interest rate. She is currently paying 5.45 per cent and the mortgage is her largest expense, at $2,000 a month.

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Caroline earned $102,408 a year before taxes in 2025. Her total annual expenses are $68,400, which she expects to remain similar in retirement. She is prepared to take on a part-time job after she retires but would prefer not to have to work at all. She’s just not sure that will be possible. “Should I delay retirement?” she asked.

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Her estimated employer defined benefit pension up to age 65 is $1,551 a month before tax and increases to $1,755 a month after that.

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If Caroline does retire at 65, she expects to receive $1,414.18 in monthly Canada Pension Plan (CPP) and $742 in monthly Old Age Security (OAS) payments. These benefits will increase to $2,008.14 and $1,006.53, respectively, if she defers until age 70. For this reason, she plans to supplement her employer pension by drawing down her registered investments and start taking CPP and OAS at age 70. “At that point, there won’t be as much in my registered retirement savings plan (RRSP), which should help minimize tax. Is this a good strategy?”

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Caroline has about $115,000 in a tax-free savings account (TFSA) invested roughly equally in exchange-traded funds (ETFs) and individual stocks; about $240,000 in an adviser-managed retirement savings plan that includes a locked-in retirement account (LIRA) invested in a global balanced mutual fund; about $250,000 in a self-directed RRSP invested equally in ETFs and individual stocks. She has about $14,000 in remaining RRSP contribution room and $16,000 in TFSA contribution room.

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“Should I continue to fund my retirement savings plans? My TFSA? Or should I pay down my mortgage more?” asked Caroline, who would also like to know how soon she should start looking to renew her mortgage. She is concerned interest rates may start to rise because of the war in the Middle East and all of the geopolitical uncertainty.

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Caroline also wonders if she should consider putting her investments into an annuity before she retires. She likes the idea of receiving a regular income stream. If not an annuity, she would like to know the best way to generate dividend income.

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What the expert says

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Caroline should be able to retire when she wants with the lifestyle she wants, although with no margin of safety, said Ed Rempel, a fee-for-service financial planner, tax accountant and blogger.

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“Her desired annual income of $88,000 before tax should give her the same after-tax cash flow her current salary of $102,000 provides since she won’t have to pay into her company pension, CPP or Employment Insurance after she retires,” he said.

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“To do this, she needs a portfolio of $735,000. Assuming her self-directed RRSP and TFSA are 100 per cent invested in equities, she is projected to have $737,000 at age 65, which should allow her to maintain her lifestyle for life. However, it’s generally advisable to have between 10 per cent and 20 per cent extra to give her a safety margin — achievable if all of her investments were 100 per cent invested in equities.”