Is $2.75M Enough to Retire Early in Halifax?

A $2.75 million portfolio sounds like a “problem solved” number—until you try to turn it into a reliable paycheque for 30+ years while keeping taxes, CPP/OAS timing, and OAS clawbacks under control. For Halifax empty nesters (or anyone planning an early retirement in Canada), the hard part isn’t saving the money. It’s drawing it down in the right order in a high-interest-rate era where GIC rates are tempting, inflation is still a live risk, and government benefits can quietly get chipped away by taxes.

Here’s the stance I’ll take: $2.75M is usually enough to retire early in Halifax—if your spending is realistic and your withdrawal plan is tax-smart. If you treat it like one giant pot of money and pull from accounts at random, you can create avoidable tax bills, trigger OAS clawback later, and accidentally push yourself into higher brackets for the rest of retirement.

This post is part of our Interest Rates, Banking & Personal Finance series, so we’ll keep it practical: how interest rates affect retirement income choices, how RRSPs and TFSAs change your tax picture, and how to think about CPP and OAS to reduce clawback risk.

Start with the “paycheque” number, not the portfolio number

Answer first: Whether $2.75M is enough depends mostly on your annual after-tax spending and whether you can keep withdrawals stable through market swings.

A common planning range is a 3.5% to 4.0% initial withdrawal rate (especially for early retirees who need the money to last longer than 30 years). On $2.75M, that’s roughly:

• 3.5%: $96,250/year (before tax)
• 4.0%: $110,000/year (before tax)

If you’re empty nesters in Halifax, a lot of couples can live well on $70,000–$110,000 after tax, depending on housing, travel, and how much you help adult kids. But the “before tax” part is the trap: $110,000 withdrawn isn’t $110,000 spent once taxes and benefit interactions show up.

A quick Halifax reality check

Halifax is often cheaper than Toronto/Vancouver, but it’s not “cheap Canada” anymore. Property taxes, insurance, utilities, and groceries add up—especially if you own a detached home or travel frequently.

A simple way to sanity-check your number:

1. Add up fixed costs (housing, insurance, utilities, basics)
2. Add lifestyle costs (travel, dining, hobbies)
3. Add one-offs (car replacement, home repairs)
4. Add a line for “family support” if it’s likely

If that total is under ~$100K/year before tax, $2.75M is usually workable. If it’s $140K+ before tax, your plan becomes highly sensitive to taxes, market returns, and sequence-of-returns risk.

The real threat: taxes and OAS clawbacks (not running out of money)

Answer first: Many high-net-worth retirees don’t “go broke”—they overpay taxes or trigger OAS clawback because withdrawals aren’t coordinated.

The Old Age Security pension is income-tested. If your net income rises above the clawback threshold in a given year, OAS gets reduced. The exact threshold changes yearly, but the planning principle stays the same: big RRSP/RRIF withdrawals later can cause clawbacks you could’ve avoided.

Here’s what tends to cause problems:

• Deferring taxes too long by living mostly off non-registered assets early
• Letting RRSPs grow untouched, then converting to a RRIF and facing mandatory withdrawals
• Taking CPP/OAS later while also being forced into large RRIF withdrawals (stacking income sources on top of each other)

Why empty nesters get caught

Empty nesters often have:

• A paid-off or nearly paid-off home (lower cash needs)
• A large RRSP balance built during peak earning years
• Flexibility to retire early and “live off savings”

That combination can accidentally create a future where ages 72+ become tax-heavy—exactly when you’d prefer stability.

Snippet-worthy truth: The goal isn’t to pay the least tax this year. It’s to pay the least tax over your whole retirement.

RRSP, TFSA, and non-registered: the drawdown order that usually works

Answer first: Most early retirees benefit from a plan that uses RRSP withdrawals earlier than they expected, preserves TFSA room for later flexibility, and manages non-registered capital gains deliberately.

There’s no universal order, but here’s a strong starting framework that often reduces lifetime tax and clawback risk.

Step 1: Use “low-income years” to pull from RRSPs on purpose

If you retire at 55–62, you may have several years with no employment income. Those are valuable. You can withdraw from your RRSP/RRIF (or do partial RRSP withdrawals) while staying in a moderate tax bracket.

This approach can:

• Reduce the future size of your RRIF (and mandatory withdrawals)
• Smooth taxable income over time
• Lower the odds of OAS clawback later

A common tactic is a planned annual RRSP withdrawal target (for example, enough to “fill up” a chosen tax bracket), then top up spending with non-registered funds.

Step 2: Keep TFSA as your “tax-free shock absorber”

TFSAs are gold for retirement planning because withdrawals don’t count as taxable income and don’t increase OAS clawback risk.

I’ve found TFSAs are most powerful later, when:

• You need a one-time large expense (roof, car, helping family)
• Markets are down and you don’t want to sell stocks in a slump
• You want to control taxable income tightly in OAS years

Step 3: Manage non-registered income like a thermostat

Non-registered accounts can create:

• Interest income (fully taxable)
• Eligible dividends (tax-favoured, but still affect income thresholds)
• Capital gains (only a portion is taxable)

In a higher-interest-rate environment, the biggest surprise is often how taxable interest income becomes if you hold lots of cash, GICs, or bond interest in a non-registered account.

Practical adjustments:

• Consider holding more interest-paying assets inside registered accounts when possible
• Be intentional about realizing capital gains (avoid “oops, huge gain” years)
• Watch distributions from funds that can spike taxable income

CPP and OAS timing: “maximize benefits” isn’t the same as “maximize outcomes”

Answer first: CPP and OAS should be timed based on longevity expectations, tax brackets, and portfolio withdrawals, not just on whether waiting increases the monthly amount.

CPP: earlier can be smart when it reduces portfolio strain

Delaying CPP increases the monthly benefit, but early retirement creates a different question: Do you want guaranteed income now to reduce withdrawals from investments?

Situations where taking CPP earlier can make sense:

• You’re drawing down a portfolio during volatile markets
• You want to keep RRSP withdrawals smaller in your 60s
• You value stability over a bigger benefit later

Situations where delaying CPP can make sense:

• You expect a long life and want higher guaranteed income later
• Your portfolio comfortably covers spending without high withdrawals
• You’re managing taxes and want to avoid stacking taxable income too early

OAS: clawback planning matters more than the start date

OAS planning is less about “early vs late” and more about keeping net income under control once OAS begins.

If your future income will be high (large RRIF withdrawals, big taxable investment income), you may benefit from:

• Drawing down RRSPs earlier to shrink future mandatory withdrawals
• Using TFSA withdrawals for irregular spending
• Avoiding large one-time income events (like big RRSP withdrawals) in OAS years

Another quotable line: The cleanest OAS clawback strategy is boring: steady income, fewer spikes.

Interest rates change the retirement playbook (and your banking choices)

Answer first: Higher interest rates can boost safe-income options like GICs, but they also raise the tax cost of interest and increase the risk of being too conservative too soon.

In late 2025, many retirees are staring at decent GIC rates and thinking, “Why risk the market?” The problem: retiring early can mean 35–45 years of spending. A portfolio that’s too heavily in cash and GICs can lose purchasing power over time.

A practical “two-bucket” approach

Many couples do well with a split like this:

1. Stability bucket (1–3 years of spending): High-interest savings, cashable GIC ladder, short-term GICs
2. Growth bucket (rest of portfolio): Diversified mix of equities and high-quality fixed income

This reduces panic-selling in down markets because your near-term spending doesn’t depend on selling investments at a bad time.

Banking tip that actually matters

Interest rates aren’t just a macro headline—they show up in your day-to-day choices:

• What you earn on cash savings
• What you pay on lines of credit (useful for short-term liquidity, dangerous if it becomes lifestyle debt)
• How your bond prices and yields behave

Retirement plans that ignore interest rates tend to swing too far: either overly aggressive (ignoring sequence risk) or overly conservative (ignoring inflation).

A simple early-retirement blueprint for a $2.75M Halifax couple

Answer first: The most reliable plan is one that sets a spending target, smooths taxable income, and schedules CPP/OAS around your drawdown—not the other way around.

Here’s a clean checklist you can apply this weekend:

1. Set a base spending number (annual after-tax) and a “fun” number (travel/gifts)
2. Run a withdrawal rate reality check at 3.5% and 4.0%
3. Map ages 55–72 as a “tax planning window” (often your best chance to shrink RRSPs)
4. Choose a target taxable income range in those years and withdraw from RRSPs accordingly
5. Use TFSA for flexibility and to avoid income spikes
6. Plan CPP and OAS to avoid stacking large RRIF withdrawals + full benefits in the same years
7. Build a cash/GIC ladder to cover 12–36 months of spending so you’re not forced to sell in a downturn

If you do only one thing: forecast taxable income year-by-year (even roughly). That’s where the clawback and bracket problems become obvious.

What to do next (and the question to ask before you retire)

A $2.75 million portfolio can absolutely fund an early retirement in Halifax. The real difference between “comfortable” and “stressful” is whether your plan controls taxes and benefit interactions as carefully as it controls spending.

If you’re close to pulling the plug on work, build a one-page retirement income plan that includes: expected spending, account types (RRSP/TFSA/non-registered), a drawdown order, and a CPP/OAS start strategy. If that feels like a lot, that’s the point—this is the part where good planning pays for itself.

The question I’d ask before you hand in a retirement letter: What year will your taxable income be highest, and is that the year you want OAS running at full speed?