How To Create a Financial Plan That Is Your Life Plan – Interview with Kornel Szrejber

I recently worked with Kornel Szrejber, host of Canada’s #1 financial podcast “Build Wealth Canada,” on his family’s financial plan, so he could feel confident about his retirement.

Kornel retired in his 30s, but he was starting to feel anxious because he wanted to make sure he wasn’t overspending.

This YouTube interview and podcast episode is a Q&A between the two of us where we talk about Kornel’s situation, as well as other situations people may go through when they are saving for retirement.

We talk about what makes a good financial plan, tax planning, and understanding how to foresee how much you can spend on things you love in your life like vacations and entertainment.

After watching this interview you’ll realize that when you know the lifestyle you want to live, you can live the life you want in your retirement.

Here are some points we touched upon:

  • Why it’s so critical to track and itemize your household expenses (so you aren’t stressed about your retirement).
  • How to know how sustainable your lifestyle is when living off your portfolio.
  • In which order should Kornel withdraw from his accounts for a tax-efficient retirement?
  • Why a personalized financial plan is key to having a successful retirement.
  • What is lifestyle creep?
  • Why you should view expenses as discretionary and non-discretionary.
  • Why investing is only 20% of the financial plan.
  • The 2 overall tax strategy choices to minimize tax in your retirement.
  • How should you plan if you earn income for a few years in your retirement.
  • Do you retire with more peace of mind with Active or Passive investment strategies?
  • Tax planning for a higher Canada Child Benefit.
  • How the CCB can put you in a high tax bracket with income as low as $17,500/year.
  • How many hours does it take to do a financial plan?
  • Planning for long-term financial success.

To learn more about Kornel Szrejber, please visit his “Build Wealth Canada,” blog, which includes his article and podcast.

Below are questions we covered in the YouTube video and Podcast episode.

Question # 1:

When you updated our financial plan, one of the major insights that I got from that exercise is how critical it is to actually track your household expenses, especially the non-discretionary expenses that you need to spend every month to live.

I found that knowing that monthly number is not only critical when you’re working your way towards financial independence so that you can avoid things like bad debt, but I actually found it to be critical in early retirement as well to prevent anxiety about running out of money and to know how sustainable your lifestyle is when living off your portfolio.

Can you speak to your process when it comes to this, and what have you found works well when trying to figure this out with your clients?

Discussion points:

  • Helps prevent issues like being house rich but cash poor.
  • Helps with evaluating career opportunities. Ex. Should we move?
  • Helps prevent issue of getting money spending anxiety no matter how large your portfolio is (ex. our net worth was higher than when we retired and yet I was still getting stressed.). Continuing to make more money was clearly not the solution.
  • Can mention my expenses. Mention how we’re mortgage free so this may seem low to some because there is no mortgage: $42,647 of non-discretionary spending without a mortgage and 2 young kids.
  • I found it helpful to view money in 2 buckets: discretionary vs non-discretionary instead of having a budget for different disc. items. What are your thoughts on that Ed?

Question # 2:

Another interesting insight that you brought up when updating our financial plan, was that when it comes to a strategy for paying the least amount of tax, you typically want to either:

a) Defer paying tax as long as possible. A good example of this would be using a tool like the RRSP.

b) Or manage your income to always be in the lowest tax bracket once you hit financial independence/retirement. For example, taking advantage of how different accounts like the TFSA and RRSP are taxed, so that you and your partner are always in the lowest tax bracket when living off your portfolio.

Can you talk about these two strategies, how they typically work, which one is better suited for who, and feel free to use me as a case study if you’d like, since we actually ended up switching strategies after the financial planning that you did for us.

Discussion points:

  • 2 overall tax strategies depend on tax brackets through retirement, including clawbacks.
  • Retirement income is from different account types that are taxed differently. Not like when you work on salary. You can choose to withdraw from the lowest tax accounts and pay very little tax, but then you may be pushed into a higher tax bracket in the future. The best strategy depends on how much higher of a tax bracket and how many years until then.
  • Most people are best to withdraw what they can in the 20% bracket and avoid going into the 30% bracket. Then target $55,000 taxable income each (sometimes $48,000) from pensions & RRIF.
  • In your case, you can always be in the lowest tax bracket, because you are frugal. It is up to $55,000/year each, or $110,000/year before tax. You are actually in a higher tax bracket now because of the CCB clawback. So minimize tax now.
  • Your best strategy:
    • Withdraw only from non-registered personal investments for your lifestyle, plus keep contributing to TFSA & RRSP from non-registered until they are depleted.
    • Don’t withdraw anything as a dividend from your corporation until you no longer get CCB.
    • Withdraw from lowest tax accounts first, while keeping TFSA maximized. So:
      • Non-registered.
      • TFSA.
      • Corporation.
      • RRSP
    • Your estate might have a high tax rate as high as 54%, but it is decades from now. Not worth prepaying tax at 20% to avoid 54% tax on estate unless you expect to both live 13 years or less.

Question # 3:

A lot of people, especially early retirees tend to still generate some income in retirement (myself included).

Some, will also receive things like an inheritance or other types of cash windfalls, like a sale of a business for example. In all of these types of cases, there is the temptation to just spend it all or a large portion of it on discretionary items, while others will be tempted to just save it and invest it all.

Your approach to this dilemma really appealed to me and is something that I’ve started to implement in my own financial life.

Can you share what you told me as a good rule to follow when dealing with any sort of surplus funds? (lifestyle creep)


Don’t get used to a lifestyle you cannot sustain long-term.

Question # 4:

For all the parents out there, particularly for those families that aren’t in very high tax brackets, the Canadian Child Benefit can be a substantial amount of tax free cash that you receive, especially if you manage your income carefully, through the use of tools like the RRSP.


Just for some context, before any clawbacks, you can get $7,437 per year, per child, tax free for your kids under six, and $6,275 for each of your kids ages 6-17.

But of course, there are those clawbacks so it’s very tough to get the maximum amount. Ed, can you speak to how us parents can optimize this in Canada so that we receive as much as possible, and also what mistakes do some parents make where they are limiting the amount they receive?

These are the effective tax rates – income tax + CCB clawback:

Question # 5:

While on the subject of kids, one of the questions that I came to you with when we met was, should I really always be putting in the maximum amount into my kids’ Family RESP every year (to get the maximum grant per child), even if I don’t think they will possibly be able to use all that money to get their education. Also, I’m sure there are some parents out there that wonder: “What if my child doesn’t end up going to post-secondary, is it risky to be putting in these tens of thousands of dollars into their RESPs over the years.

Can you address these concerns?


It is usually worthwhile to get all the free grant money from the government. You can transfer the credits with a Family RESP, so that if even one of your kids goes to university or college for just one year, you can keep most or all of the grant – plus the growth on the grant.


Planning With Ed


Ed Rempel has helped thousands of Canadians become financially secure. He is a fee-for-service financial planner, tax  accountant, expert in many tax & investment strategies, and a popular and passionate blogger.

Ed has a unique understanding of how to be successful financially based on extensive real-life experience, having written nearly 1,000 comprehensive personal financial plans.

The “Planning with Ed” experience is about your life, not just money. Your Financial Plan is the GPS for your life.

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