How This Couple Spends Their Retirement Travelling

This is a guest post from long time reader Gary Daniels.

We retired in 2006; I am 66 and my wife Margaret is 63.  We started collecting CPP at 60 and of course OAS at 65.

We’re now in our 7th year of retirement and we are very happy (although it took us three years to get used to not having a regular paycheque!)

We are also debt free.

Related: 5 Misconceptions About Retirement Planning

We’ve made plenty of mistakes; the worst of which is being over budget each and every year due to either an unrealistic budget or too much travelling!

Make A Plan

Preparing for retirement was partially a guessing game. We knew three things:

  1. We wanted to travel — we love cruising and camping;
  2. We wanted to escape the snow and cold in the winter months;
  3. And most important we wanted to be part of our grandchildren’s lives.

All three required savings, as being self-employed we had no pension plan beyond CPP and OAS.

Our only option was RRSP’s.

Today we have TFSA’s, which in my opinion are as or more important than RRSP’s.

Related: Using Tax Free Savings Accounts In Retirement

If we need a lump sum we’ll either cash in RRSP’s, which have tax ramifications, or use our non-registered savings.

With TFSA’s you can build up a nest egg of tax free savings even when you’re withdrawing from other sources.

My wife always calls it the “better than diet”.  Instead of eating two butter tarts, just eat one.

Making The Budget Work

Our first decision was to move closer to our grandchildren; into a retirement community, not a high-priced condo.

Our trips are researched constantly for the best deal, and the purchase of a fifth-wheel is certainly much more frugal than buying a house in Arizona.

Related: Are Road Trips Really Cheaper Than Flying?

When we retired in 2006, we received monthly income from the company that bought our business.  That ended in late 2008 so our RRSP’s were left untouched until then.

It was a stroke of luck that 80% of our RRSP’s were in GIC’s and the balance in monthly income funds.  The markets tanked and we were basically left unscathed.

We originally planned to keep two to three years ahead in GIC’s, but we need more income from our investments than GIC’s can provide.  Remember the years of 10 – 15% savings interest rates?  Oh, to have those rates today we would be on easy street!

But interest rates got so low that we decided to put half our portfolio in monthly income funds and half in dividend paying stocks, which we started buying in 2010 after reading Boomer & Echo.

Our last GIC will be used up this year.  After that we’ll live off our CPP, OAS, monthly income funds and dividends.

We hope that if the markets go south that not every company would cease paying dividends – which they didn’t in 2008-2009.  It’s a bit of a gamble, but life is a gamble.

Related: Can You Succeed With An All-GIC Portfolio?

Thankfully, having no debt affords us the ability to TRY to live within our means.

Travelling In Retirement

We love to travel.  Each year we find a trip we would love to take, but of course we’d never budget enough so our savings take a hit.

We certainly won’t be the richest people in the graveyard.  Our two kids have done well so an inheritance is not expected; it would just be a bonus.

Travel while you can because you don’t know what’s around the corner.  As you get older, health insurance becomes very expensive and if your health deteriorates then look out!

Related: Drug Coverage For Seniors

We are in Myrtle Beach, SC right now in our ‘tin can’ (fifth-wheel) looking at the ocean.  It’s economical, and best of all – no snow!

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  1. My Own Advisor on March 15, 2013 at 4:47 am

    Loved this! 🙂

    “With TFSA’s you can build up a nest egg of tax free savings even when you’re withdrawing from other sources.”

    This is my plan as well, probably draw-down RRSPs before CPP and OAS kick-in. Not sure when I’ll take CPP but I don’t plan on working after 60 that’s for sure.

    • Gary on March 15, 2013 at 8:17 am

      Thank you for the kind words! I read your blog as well.

  2. Wendi on March 15, 2013 at 6:32 am

    Great post!
    Get more retirees to tell us how they are doing. How else are we going to learn what works and what doesn’t?

    • Gary on March 15, 2013 at 8:14 am

      Thanks, I hope it helps. I agree there are not as many sources of information after you retire.

    • rhonda caplan on June 9, 2016 at 5:28 pm

      great idea,but please have some single women sharing how they manage their finances in retirement.I have single friends who get a full pension from the government and own their homes….not me.
      I have no one to credit split with,I do not own a home (sold in the divorce,and no gains made as it covered the mortgage and legal fees),I have no government pension. I do have an insurance annuity product for life that is not available for sale any longer,but will give me approx. 850 a month for my lifetime.(192000 value…but I am guaranteed the monthy amount no matter how this performs)
      I have support until I am 82 years old,which is for 17 more years from today.It has a cost of living built in and today is 817.00 per month .
      . I help my son who is ill for at least 300 to 400 $ a month.I HAVE cpp which had part of my husbands share for about 865.00 a month,and oas which will have additional monies because I will wait until 66.5 until I retire in Dec 2016. and take my cpp and oas.I have 92000 in RSPs and 34000 in tfsa .No savings at all, and want to travel for another 3 years. Although my fin. advisor has me living until 90,I strongly believe I may only hit 85…,so would like to cash in some rrsps to fund my travel. My advisor wants me to convert to a RIF when I retire…but I want to know how much I shoukd convert.I have a balanced low risk portfolio so how will I manage the retirement I always pictured.I will be lucky to gross 42000. with some expenses put into savings and vacation. With my monthly expenses,and gov’t income tax I will be lucky to net 32500…..any ideas on how to proceed woukd be appreciated.

  3. Bet Crooks on March 15, 2013 at 6:39 am

    Enjoy your travels!

    It sounds like the David Trahair GIC route worked for them.
    Boomer and Echo: Can You Succeed With An All GIC Portfolio?
    although probably their business was a big part of their savings.

    I hope they have enough in cash-like investments to pull out of their RRSP when the mandatory withdrawals begin though. It wouldn’t be great to have to sell dividend-payers at a loss when you could hold them till they bounced back if you had more time.

  4. Gary on March 15, 2013 at 8:35 am

    The sale of our business was a small part of our savings. It supplemented our income for the first two years. Good point about the mandatory withdrawals; i will give that more thought.

  5. Keith Charles Cowan on March 15, 2013 at 8:50 am

    I find the lack of numbers frustrating. How much was saved by moving to the retirement community, if anything? What is wrong with owning a condo? How was the decision to pull a 5th wheeler made? How has it worked out financially?

    I got the impression that your decisions were made without the benefit of financial analysis. The article is good. I am just looking for ways to make it better.

    • Gary on March 15, 2013 at 9:13 am

      Hi Keith — I’ll give you the short answers. There is nothing wrong with a condo but we have a dog. A lot of condos don’t like dogs hence the 5th wheel. Also it is our home on wheels for a good part of the year as we love camping. The retirement community is not for everyone but its close to our grand babies and all the outside work is done for us. The numbers I’m afraid are a secret; sorry.

  6. krantcents on March 15, 2013 at 10:01 am

    It sounds like they have a good retirement. One of the important messages is as you get older you cannot do all the things you would like to do.

    • Gary on March 15, 2013 at 10:58 am

      We do and you are absolutely right.

  7. Avrex on March 15, 2013 at 11:11 am

    Gary, this post really speaks to me.
    You are living the exact dream that I want to live i.e. with a fifth wheel or travel trailer you can enjoy: cruising, camping, warm climates, adventure.
    I’ll continue to save in my RRSP, TFSA and non-registered accounts. As ‘My Own Advisor’ stated above, when I do retire, I’ll take the most tax efficient route, drawing-down RRSPs and non-registered, until CPP/OAS kick in.

    Thanks for sharing your experience.

    • Gary on March 15, 2013 at 11:17 am

      Avrex: Thank you for the positive response and good luck — sounds like you are on track for an enjoyable retirement.

  8. Pauline on March 15, 2013 at 3:01 pm

    It is great that you can live your dream retirement without breaking the bank Gary. I live in Guatemala and lots of foreigners have bought houses nearby to live there during winter at a fraction of NA price. The usually fly back to visit their family for a few months in summer. Other just rent here and change country every year. One advantage is you can get a cook/cleaner for about $200 per month full time.

    • Keith Charles Cowan on March 15, 2013 at 4:12 pm

      We own a condo in PV. We return to Vancouver in the summer and usually take a trip to Europe too. Our maid comes for 2 days a week and costs us $800 for the year.

      We drove a car down 4 years ago and now fly back and forth with 2 cats. Telephone and internet is $32/mo and satellite TV is $100/mo (for both locations).

      We focus on the costs and share our experience with others. Why be secretive?

      • Gary on March 15, 2013 at 6:46 pm

        Hey Pauline and Keith: I am happy you both have made decisions that suit your life style. I have an elderly parent and we wanted to be able to get back home to look after her should the necessity arise. Myrtle Beach is only 1600 kilometres from our home so we feel very comfortable that we can be home quickly.

        • Keith Charles Cowan on March 16, 2013 at 9:24 am

          That was also a factor for us with MIL in Vancouver and Father in Toronto. Non-stop flights to both places are plentiful.

          We also know a couple who drag their 5th wheel down here every year from Abbotsford, stopping for a month in PV each way to warmer climes south of Acapulco. They have been doing it for years.

          • Gary on March 16, 2013 at 11:08 am

            I don’t think we will ever be brave enough to take the 5th wheel into Mexico!

          • Keith Charles Cowan on March 17, 2013 at 8:42 am

            We drove down in 2008. We had heard all kinds of stories. But the drive was uneventful. Ron and Vickie from Abbotsford also wonder about the stories. It could be that our vehicles are just not desirable.

    • Katherine on March 29, 2013 at 8:00 pm

      Pauline we are looking at Guatemala as well but we have only started researching where we want to retire. Do you have any advice what areas of Guatemala seem to be most attractive to Canadians?

  9. thefiscallyfit on March 15, 2013 at 5:28 pm

    great read. I am always curious to the decision making process that leads to dividend producing funds inside of an RRSP. I know why I would/would not do this but I am curious to your decision making process. I like how you migrated away from the GIC strategy. My only other question is how you quantify the “risk” in your portfolio?

    • Gary on March 15, 2013 at 6:53 pm

      80% of our savings are inside RRSP’s so there was really no choice. We are now in the capital preservation stage and so dividends far outweigh interest bearing investments. Risk is such an individual thing — we try to stay with blue chippers — banks, telecoms and utilities. Hope this answers your queries.

  10. Michael on March 16, 2013 at 7:44 am

    Great article. Any advice on the TFSA vs RRSP debate? You’re right, risk is a personal thing, but like you I prefer to stay with blue chip dividend paying stocks (ie banks). Not a big fan of the banks products though, I put $15k in a TD mutual fund a while back and saw very minimal growth and high fees. Ideally it’s obviously best to max out both RRSP and TFSA but if you had to choose which one would you focus more time and effort on? I am 30 and my wife and I make about $210k combined annually.

    • Echo on March 16, 2013 at 8:34 am

      @Michael – With your income level it makes sense to focus on your RRSP first. The key is what you decide to do with the refund. If you re-invest it, or use it to pay down your mortgage (if you have one) you’ll grow your net worth faster. If you spend the refund then you would’ve been better off maxing out your TFSA.

      • Gary on March 16, 2013 at 11:11 am

        I agree with Echo. RRSP’s are the way to go when you are in a high tax bracket. Hopefully ( maybe not ) you will draw it back out at a lower rate.

  11. Michael on March 16, 2013 at 9:57 pm

    Thanks, I will do that. This year isn’t looking pretty in terms of a refund but next year will if we start putting funds into the RRSP. We are fairly disciplined financially so no worries about the use of the refund. We would use it to pay down the mortgage, but it’s a toss up in that the rate is low (2.60%) so perhaps the money would be better off invested. Anywho, thanks for the advice

  12. Cory Papineau on March 18, 2013 at 3:17 pm

    I want to ask Gary and Margaret how much of their pre-retirement income are they currently living on? I am a financial planner and for those that are debt free it seems 60% is a fairly comfortable number unless their tastes are more extravagant.

    What lessons have you learned that you would advise others in a similar situation to avoid. Pre-retirement what did you not do that you wished you had that may have prepared you better?

    • Gary on March 18, 2013 at 5:02 pm

      Hi Cory: It is very difficult to say what percentage of our income we are spending now. Being self-employed our income varied quite a bit depending on economic conditions and our customers needs but I would say 50 to 60% would be very close. Looking back I don’t see anything we could have foreseen other than perhaps some sort of insurance to look after us if one or both of us became ill and needed professional care; now the the insurance is too expensive.
      The thing we did waste money on was a second car. For three years a second car sat in the driveway. It was driven less than 2000k and we paid insurance and maintenance — a total waste of funds. We do practically everything together since our retirement. It not a lot but I hope it helps.

      • Keith Charles Cowan on March 19, 2013 at 8:54 am

        We got rid of all extra credit cards, keeping one Visa with a partner card and one Mastercard with partner. We also have an Amex for Costco.

        Took 2 years to get around to selling the BMW convertible.

        We are running 25% to 30% of our working budget. That includes an annual trip to Europe.

  13. LPC on March 19, 2013 at 1:06 pm

    So Gary, why is it that you can’t stay on budget for travelling? Does the travel change so much from year to year that’s it’s difficult to come up with an estimate?

    • Gary on March 20, 2013 at 10:27 am

      Yes! Our bucket list keeps changing. Unfortunately when it comes to travel we are both enablers. We’ll stay home next year but next year hasn’t come yet.

      • Keith Charles Cowan on March 20, 2013 at 12:33 pm

        We have spent the last four years in Europe for a month. This year, no such trip planned.

        But then maybe Manhatten…

  14. Tushar @ Everything Finance on March 19, 2013 at 8:15 pm

    I love the idea of travelling when I`m retired. There’s no better time to do it – when you’re young, you have no money. When you have kids and a house, you don’t have time. So why not when you’re retired!

    • Gary on March 20, 2013 at 10:28 am

      You are correct. Also that darn job gets in the way!

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