Research shows that one in five women in Canada will remain childless, which dovetails with census data that shows more people are living alone, as part of a couple without children or as part of a multi-generational family.
Marianna*, 50, is among this growing shift away from the traditional nuclear family. She is single, has no dependants and lives with her parents, who are in their 80s, in a home they jointly own and which she will inherit. She is also already enjoying retirement.
After building a near-30-year career as a music teacher, she retired from her full-time job four years ago, at which point, she commuted her employer group retirement savings plan and invested those funds into a self-directed registered retirement savings plan (RRSP), which is made up of dividend-paying Canadian equities, largely in the bank and energy sector.
The plan is now worth $1.5 million and generates annual dividends of nearly $79,000. Initially, she reinvested the dividends into the RRSP. Two years ago, she began drawing funds from the RRSP to avoid a hefty tax bill down the road. She is now using that money to pay her yearly tax bill, but isn’t sure that’s the right approach.
Marianna has an additional $2.5 million (including $113,000 in a tax-free savings account), also fully invested in the same dividend-paying Canadian stocks. Her portfolio generates nearly $155,000 each year, which she reinvests each year into her portfolio.
Her taxable income now is $329,000, including $155,000 in dividends (considered $214,000 in taxable income after gross-up), $79,000 in RRSP withdrawals and $36,000 in income from a part-time job teaching music. This money easily covers her expenses of about $3,000 a month and she has no debt. A lifelong
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