Apologies if this has already been covered, the forum search was not working very well for me.
I'm planning to retire in about 10 years. At this point, I will be tapping into a defined-benefit pension plan that I expect will provide about $54k annually (some growth/raise estimates in there, value based on current numbers is more like $49-50k). The pension consists of a basic amount + bridge benefit. The bridge is basically to covered the expected amount for Canada Pension Plan payments. The pension has a 50% survivor benefit, so if I kick the bucket after 65, my wife would continue to receive approx $27k/year.
I have RRSPs currently valued at just shy of $20k, but I stopped contributing to these years ago and instead shifted to TFSA.
This past year I pulled out all my TFSA and began contributing to a spousal RRSP to get the early tax deferral. My wife is a stay-at-home-mom, so she will either have no income in retirement or the survivor benefit pension noted above. Going the route of spousal RRSP should minimize our long-term tax bill. Assuming a variety of contribution factors and 6% return on a low-fee index fund that would put her balance at 65 in the 650k - 1M range. At the 4% SWR, this would net an annual income of approx $26-40k.
I get that we're lucky to have a defined benefit pension plan kick in when I'm 43. I won't really need the RRSP optimizing personally, but it will be a good contingency plan for my wife.
I recently saw some US info (mad FIendist I think) where they pull out minimal funds from a tax-deferred account (counting as income?) to put into their TFSA equivalent. After the initial delay period (5 years I think), they continue this conversion until retirement, effectively deferring tax early and late.
I'm trying to find info on the possibilities for a Canadian equivalent to this. Basically, my question is: can my wife draw from RRSPs as income (maybe after waiting a few years, and at the basic income tax exemption level, being sure to take off other sources of income such as CCTB) while I continue to contribute to her RRSP? These funds would be rolled over immediately to a TFSA.
