Can a Canadian living in the U.S. retire at age 60 with $2 million?
In this video, I walk through a hypothetical Canadian-American couple who have accumulated $2 million and are ready to retire at 60.
We look at:
- How much they actually need to spend in retirement
- Their CPP, OAS and Social Security benefits
- How to think about RRSP withdrawals
- Which U.S. accounts to withdraw from
- Roth conversion and tax-planning opportunities
- And ultimately, whether $2 million is enough to retire comfortably
For Canadians living in the United States, retirement planning can be more complicated because you may have retirement accounts and benefits on both sides of the border. The key isn’t simply reaching a certain portfolio value. It’s about coordinating your Canadian and U.S. assets into a single retirement income and tax strategy.
Watch the video here:
If you’re a Canadian living in the U.S. and you’re getting close to retirement, you can learn more about working with us or schedule a meeting here:
Quick recap
Bryan discussed the complexities of retirement planning for Canadians living in the U.S., using the hypothetical case of John and Sarah, a couple with $2 million in savings. He explained the challenges of withdrawing from various accounts like RRSPs, 401k, and IRAs, and the impact of taxes and the timing of government benefits such as Social Security, CPP, and OAS. Bryan highlighted the importance of a strategic withdrawal plan, especially during the early years of retirement before government benefits kick in. He demonstrated that despite high initial withdrawals, John and Sarah could likely retire at 60 due to their substantial portfolio and future fixed income. Bryan emphasized that the key question is not just the amount saved, but whether the portfolio, combined with government benefits and a smart strategy, can support the desired retirement lifestyle.
Summary
Cross-Border Retirement Planning Strategy
Bryan discussed a retirement-planning scenario for John and Sarah, a hypothetical couple, both aged 60, who have lived in the US for 25 years after growing up in Canada. The couple has $2 million in savings consisting of various retirement accounts including 401k, IRA, Roth IRA, RRSP, and taxable investments. Bryan explained that while they appear to have sufficient funds for retirement, the complexity of managing multiple cross-border accounts, including Canadian RRSPs and US investments, requires careful planning to determine the optimal withdrawal strategy and tax implications.
Retirement Planning Withdrawal Rate Discussion
Bryan discussed retirement planning considerations, explaining that clients should aim to maintain their pre-retirement spending levels in retirement. He highlighted a specific case in which a couple plans to spend $100,000 annually, with additional medical expenses of $20,000- $25,000 per year before Medicare coverage begins at age 65. Bryan noted that this would require withdrawing $120,000 annually from a $2 million portfolio, resulting in a 6% withdrawal rate, which is higher than the typical recommended 4-5% safe withdrawal rate.
Dual Retirement Benefits Planning
Bryan explained the benefits of dual US-Canada work history for retirees, using John and Sarah as examples to demonstrate how they could receive approximately $75,000 annually in combined Social Security, CPP, and OAS benefits at full retirement age. Bryan noted that while the couple might face several years of limited income before benefits begin, their retirement plan would remain viable once benefits activate at age 67, requiring only minimal withdrawals from their savings.
Retirement Income Strategy Planning
Bryan discussed strategies for John and Sarah to generate $100,000- $120,000 in annual retirement income, focusing on their $350,000 RRSP. He explained they could withdraw up to $35,000 annually from their RRSP while maintaining minimal tax withholding, and outlined two approaches: either taking money from taxable accounts while doing Roth conversions, or balancing withdrawals between taxable and IRA accounts to maintain low tax rates in early retirement years.
Retirement Planning at Age 60
Bryan analyzed whether John and Sarah could retire at age 60 with their $2 million investment portfolio, determining they could generate the needed $100,000-$120,000 annual income through a combination of portfolio withdrawals, CPP, OAS, and potentially Social Security benefits. He explained that while initial withdrawals would be high at $600,000-$700,000 over the first 6-7 years, they would decrease to approximately $25,000 annually once all benefits kicked in, leaving them with a sustainable $1 million portfolio. Bryan concluded that the key question for retirement planning isn’t just portfolio size, but whether all income sources can work together effectively to meet retirement goals.