A friend sold his business for $1 million when he was 40.
That was 30 years ago and he hasn't worked since then.
Well, that's not exactly true. While he and his wife have no regular employment duties, they have made an unofficial retirement career out of buying or building carefully chosen homes, then selling at a profit.
It's not a business in any sense, more of a hobby - something for which they have a knack.
If it were a business, they would have to declare each profit as income and pay tax.
But because the homes are their principal residences - they tend to live in each one for several years and always move for non-financial reasons - they pay no tax on their profits.
You might remember those London Life "Freedom 55" ads which encouraged people to save diligently so they could retire at 55.
These days, people might aim for early retirement like my friend.
But they are more likely to continue to work parttime or full-time - often at a new career or volunteer position - for as long as they enjoy what it is they are doing.
And that involves a whole new approach to money management.
"Like any other stage of life, retirement has key financial risks," said Michelle Munro, director, tax planning, for Fidelity Investments Canada which recently published an interesting report entitled After the Global Financial Crisis: The Five Key Risks to Retirement Income.
"Thanks to that report we know what risks investors should be aware of: longevity, inflation, asset allocation, withdrawal rates, and health care."
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Munro suggested people use the simple Tax Free Savings Account as one of their strategies to help reduce all five risks. The TFSA allows $5,000 annual contributions and shelters the growth - income, capital gains - from tax, so the growth compounds faster than an investment subject to tax.
You can take money out of a TFSA without facing any income tax bills - compared with withdrawing fully taxable RRSP funds or selling off an investment that has grown in value and so has a capital gain subject to tax.
Mike Grenby is a columnist and independent personal fi nancial advisor; he'll answer questions in this column as space allows but cannot reply personally - email [email protected].
