Author Topic: Mortgage free, TFSAs maxed - what's next?  (Read 920 times)


  • Bristles
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Mortgage free, TFSAs maxed - what's next?
« on: June 05, 2020, 02:41:01 PM »
Our mortgage is paid off, TFSAs are maxed, we have defined benefit pension plans.  The wife can retire next year if she wants at about 50% of her current salary.  She plans on doing so.  Our spending is significantly less than what we make, so we can afford this.  But in our last year of prime earning, what should we do?  RRSP? Taxable accounts?

Right now she is making a bit more than $100K, and I make about $140K.  Prime earning years indeed.

My thought was to plow money into her RRSP and then take it out at the lower tax rate when she is on pension.  Would appreciate input.

Here has been our progress since I found this place:

                         May 2018       Dec 2019     June 2020
Mortgage           ($28,700)              $ 0                 $0
Me RRSP                     $  0              $ 0                 $0
     TFSA                      $ 0       $71,700       $103,000
Spouse RRSP               $ 0              $ 0                 $0
           TFSA                $ 0       $37,500         $72,000
Kid RESP              $ 36,000       $46,000         $52,000
Total:                $7,300         $155,200         $228,000

I did well on my TFSA - bought some individual stocks that did well last year and then sold everything before the big crash and bought back in when things were a bit lower. Yeah yeah, timing markets I know.  Almost gave myself an ulcer doing it and just got lucky. I wouldn't bother again. Obviously didn't time it perfectly, but still, made some good progress and I'm up from where I was at the market peak.


  • Magnum Stache
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Re: Mortgage free, TFSAs maxed - what's next?
« Reply #1 on: June 05, 2020, 03:30:33 PM »
I can't speak to the quality of the Recommended Investment order for Canadians part of the sticky, but that's where I would send a US based person with this question.

Broadly speaking (without offhand familiarity with the Canadian version of retirement account alphabet soup) it's always advisable to contribute to a taxed deferred account in a year when your marginal tax rate is higher than you expect it to be when you withdraw and it's almost always better to contribute to any kind of tax advantaged account instead of a taxable account as long as there are reasonable ways to maintain access to enough money to cover early retirement years if such tax advantaged account puts restrictions on withdrawals based on age.

Lews Therin

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Re: Mortgage free, TFSAs maxed - what's next?
« Reply #2 on: June 05, 2020, 07:05:40 PM »
I'd go intense into RRSP (Her) and Spousal RRSP (you) until your partner stops working, at which point only you use Spousal RRSP, especially if you've never used your rrsp room.

This Forum member has a pretty clear website on all the PF topics for canadians

I'd recommend this one.

FYI, for spousal RRSP, your partner can't take the money out until 3 years after the last transfer or else it'll be taxed to you. If you want to give more details, I'm sure we can give more specific recommendations.