In your fifties, you might want to consider taking advantage of RRSP over-contribution rules, look at consolidation of RRSPs to one account but also review your investment portfolio with more urgency as you are coming closer and closer to retirement.

Market turndowns are more perilous in your 50’s than when you were younger. That is why many people begin to further diversify their portfolios into stable products to avoid unwelcome surprises. At this age you typically want to see about 30% of a portfolio in GICs, which offer a guaranteed rate of return looking to preserve your principal, earning interest at a fixed rate.

As you get closer to your retirement you want to start building up a buffer. To calculate how much that should be, take the annual retirement income you’ll need and multiply it by three. For example if you think you’ll need to withdraw $20,000 a year, then in the years before you retire, build up a $60,000 buffer in ultra-safe investments.

Retiring with debt can be very dangerous. The more money you owe, the more you will have to withdraw from your RRSPs. The more you withdraw, the higher your taxable income, and the higher your taxable income, the more potential there is for some of your Old Age Security benefits to be clawed back. If you have assets in a TFSA, use some of it to pay down your debt.

Another way is to sell/withdraw enough of your holdings in an unregistered investment portfolio to pay off the debts. If you are dead set on keeping the investments, try this: If you sell some of your holdings, pay off your debt and then re-borrow to buy back the securities after a 30-day period has elapsed. Loans for investment purposes are tax-deductible, unlike regular loans.

Tips:

• It’s actually possible to have too much money invested in an RRSP, particularly if you’re a lower-income earner or have a generous pension coming. A large RRSP could result in your funds being heavily taxed upon retirement. It might be more prudent to max out your TFSA now.
• Get serious about paying off debts, such as your mortgage.
• This is the time to increase contributions, and decrease risks, both tactics that work hand in hand.
• Consolidating your RRSPs or RIFs is relatively easy, and because you are not deregistering them you won’t be incurring any tax charges or creating income problems.
• Get ruthless about carving out as much of your current income as you can and stashing it in savings. You won’t have the same advantage of compound interest as when you were younger, but you have a target in view — that’s the best motivator of all.