Sarah (aged 55) and Michael (aged 55) are meticulously planning their retirement, set to begin in five years when they turn 60. They recently celebrated a significant financial achievement - paying off their mortgage - which has provided them with additional cash flow. With some room left in their Registered Retirement Savings Plans (RRSPs) and Tax-Free Savings Accounts (TFSAs), they now seek guidance on taxable investments. Their two children are financially independent, but Sarah and Michael aspire to provide each child with gifts worth $50,000 in the coming years. These gifts might be earmarked for important life events such as a home purchase or a wedding. Their primary goal is to travel extensively in the early stages of retirement while they are still in good health. They intend to spend significantly more during the initial decade of retirement, from ages 60 to 70, followed by a more conservative budget from age 70 onwards. Lacking defined benefit pensions, they are intrigued by the idea of delaying the start of their Canada Pension Plan (CPP) until age 70, which is expected to create a substantial and secure income source in the later stages of retirement. However, they are concerned that delaying CPP
a) will limit their ability to travel extensively in the early stages of retirement.
b) will result in lower CPP benefits overall, compared to starting earlier.
c) may not be financially sustainable given their conservative budget plan.
d) may not provide them with adequate income security in the later stages of retirement.