Cynthia is 56 years old, single and lives in Winnipeg. She rents a two-bedroom apartment for $1,600 a month, likes her house, likes her landlord, and has never been particularly attracted to homeownership just because that’s what people are supposed to do. She works in healthcare after changing careers late in life, earns approximately $118,000 per year and contributes to the HEB Manitoba pension plan. She has been frugal with her savings, avoided debt and has built a solid financial foundation herself.
And yet, like many single people in their late 50s, she isn’t looking for reassurance in the abstract. She wants real answers to very practical questions about whether the life she imagines is actually supported by the numbers.
Cynthia’s main goal is simple. She would like the ability to retire somewhere between the ages of 60 and 62 and spend about $60,000 a year after taxes without having to worry about running out of money later in life.
Along the way, she also wonders whether renting is a mistake in retirement, whether her TFSA should still be mostly in GICs, how much her retirement really helps considering she doesn’t get a full benefit, and how she can be reasonably tax efficient without turning her finances into a full-time project.
Before answering any of these questions, it helps to understand where she’s coming from.
Where Cynthia comes from
Today, Cynthia’s net worth is approximately $520,000. About $335,000 is in her RRSP, $130,000 in her TFSA, and another $55,000 in savings. She has no debts and no real estate.
It’s not an extreme situation in either direction, but it is very representative of someone who has done a lot of good while living their life on one income.
Can she retire at age 60?
The first thing we tested was Cynthia’s desired outcome: retire at age 60 and immediately spend $60,000 a year, after taxes. At first glance, the projections seemed to look fine for a long time, which often gives people a false sense of confidence when they look at a retirement spreadsheet.
The problem surfaced later.
In the early 1980s the plan began to deteriorate, and by the mid-1980s the margin of safety had disappeared. Nothing dramatic happened in any one year, but the cumulative effect was so great that Cynthia would rely on increasingly optimistic assumptions just when she had the least ability to adapt.
What will change if she works a little longer?
Rather than forcing retirement at age 60, we’ve adjusted the plan so that Cynthia works an additional two years and retires at age 62, in April 2031. Those additional years of work give the plan more breathing room and reduce the risk that the pension will depend on the best assumptions holding up well into her 80s and 90s.
They also allow her to fully finance a $12,000 bucket list trip to Britain in 2027, upgrade her vehicle with a $35,000 purchase in 2029, and continue saving meaningfully while still being in a higher tax bracket.
From 2026 through 2030, she will contribute $7,200 per year to her RRSP and $7,000 per year to her TFSA, with contributions increasing slightly over time due to inflation.
Cynthia spends about $54,000 a year after taxes while working, increasing that to $60,000 a year once she retires. Spending increases with inflation until age 75 and then grows more slowly (inflation minus 1%) as it enters the “slow-go” years, from age 76 to 95.
In terms of income, Cynthia’s pension is not dependent on a single source. Once she retires at age 62, she will begin receiving her HEB Manitoba pension, which initially pays out about $16,000 per year and is indexed at about 70 percent of inflation. It’s not a full, gold-plated pension, but it’s a meaningful lifetime income stream, and it’s easy to forget that she pays for it every year through contributions of about 8.5 percent of her paycheck.
In her 60s, Cynthia also draws on her RRSP to fund expenses while intentionally deferring CPP and OAS until age 70. This allows her to withdraw registered assets during a period of lower taxes and avoid stacking large government benefits on top of higher minimum RRIF withdrawals later in life.
Once CPP and OAS begin at age 70, RRSP and RRIF withdrawals are reduced accordingly, keeping Cynthia’s taxable income within a relatively narrow range during retirement. Over her lifetime, her average tax rate is about 15.5 percent.
Is renting a problem when you are retired?
One of Cynthia’s biggest emotional concerns had nothing to do with markets or taxes. It was renting.
There’s a persistent idea that renting after retirement is inherently unstable, that you’re always one renovation or rent increase away from chaos. In practice, much of that fear is driven by worst-case scenario anecdotes, rather than how rental markets actually work for low-maintenance tenants over the long term.
Cynthia pays a fair rent, has a good relationship with her landlord and offers exactly what most landlords want: predictability. In a tenant-friendly regulatory environment with rent controls and rising operating costs, long-term tenants are valuable, and rents often rise more slowly in older properties than in properties with higher turnover.
Buying an apartment would require Cynthia to put a significant portion of her liquid assets into a single, illiquid investment. That capital cannot (easily) be partially used to fund retirement expenses, and it introduces a future decision that is often ignored in planning discussions: sell later.
Selling the apartment later in life involves transaction costs, timing risk and the possibility that the markets will not cooperate when necessary. For Cynthia, renting offers flexibility, liquidity and simplicity, things that are often undervalued for single retirees.
How the pension plan actually works
Cynthia’s TFSA should also play a different role in the future.
Currently, most of its TFSA is invested in GICs, which made sense when safety and security were the priority. Going forward, that account should realize its full tax-free potential.
She will continue to contribute for several more years, with the goal of growing the TFSA to roughly $250,000 before her first withdrawals around 2033. Because this money needs to last for decades, it should be invested in a globally diversified, low-cost index fund, rather than parked in guaranteed returns that slowly lose purchasing power.
The TFSA becomes its tax-free growth engine and its margin of safety for one-off expenses or unexpected shocks, not something she taps into casually.
From a tax perspective, the strategy is simple and repeatable. While she works, Cynthia contributes $7,200 per year to her RRSP to bring taxable income to the bottom of Manitoba’s 37.9 percent marginal tax bracket, so that every dollar contributed provides a significant tax benefit.
She maximizes her TFSA each year and uses the excess cash flow to fund short-term goals such as travel and car replacement.
At retirement, RRSP withdrawals are large enough to fill the 26.75 percent marginal bracket, CPP and OAS are deferred until 70, and TFSA withdrawals are used selectively rather than automatically.
Final thoughts
Towards the end of the projection, Cynthia’s wealth gradually decreases, which is exactly what it should do for someone who is maximizing her enjoyment of life.
She uses her savings to support her expenses, her pension and government benefits provide a stable income, and she still has a reasonable margin of safety well into her 90s, much of it in her TFSA, where it remains flexible and tax-free.
More importantly, the pension scheme gives Cynthia clarity. She knows when she can retire, how much she can spend and which considerations are actually decisive. The uncertainty does not disappear, but is limited. And for someone planning retirement on a single income, that’s the difference between hoping everything will work out and knowing that it probably will.
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