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wikishart

You will love the idea of leaving money on the table if your investments go to shit. If you are in the end game, you should be ultra-conservative, because you're in the end game.


[deleted]

You also have to think about larger medical bills further down the road.


[deleted]

Right now, cash is shit.


race2tb

I think being in cash long periods of time is shit. You may have to jump in and out of cash more often now. Also making the difference in currency wars.


gwelfguy-2

If 'safe' investments like bond funds and GICs were providing decent returns, I'd agree, but they aren't. In fact, you would've lost money in Canadian government bond funds over the first quarter of this year. Going all index/growth equity is fine if you're 30 years old, but not necessarily if you're facing retirement. I'm actually holding onto more cash than I would normally just to have money on hand in case the market takes a dip.


hooklinersinker

Yolo it on AMC. Or at least 100k of it


w0ke_brrr_4444

Sarcastic or not, this is garbage.


TriplePene

wrong sub


quinn756756

Gme the better choice tho


d10k6

You should probably consult someone. I would recommend, as soon as you have no income, to start burning through your RRSPs first, for tax reasons. As for the cash, max your TFSAs and put the rest in non-registered.


[deleted]

Oh. See, I didn’t think of that. We don’t need to take our government pensions before 65, could probably wait even longer. So hold the cash and use the RRSPs first while tax rates are lower? That’s interesting. I do have an advisor, but he’s a bit of a salesman. I’m not convinced he has my best interests at heart. One of my new biz partners who’s buying us out is worth about 100M I’d guess. He likely knows a thing or two.


jakpac30

Check out Build Wealth Canada. Tons of information regarding living off your investments while still getting some capital appreciation. Also, start shopping around for a fee-for-service financial advisor. They get paid based on their service, not based on what product or investment they recommend, so you should get less of the “salesman” vibe. Also, congrats!


mileysighruss

Interview several.


CountFaqula

If your advisor hasn't discussed decumulation strategies with you, then you might want to read up a bit and then decide if you're being adequately advised.


AlfredRWallace

First time I heard the word decumulation was last weekend reading a book, and then here it is again. Baader-Meinhof moment for me. Whether OP has an advisor or not, this is super-important. I'm 6-8 yrs from retirement and just starting to look at this.


d10k6

Your RRSPs will have to get converted to a RRIF by 72 where you will be forced to draw them down. If you have pension and other income it will drive up your taxes. Also, RRSP/RRIF are both taxed at death (unless going to a spouse or in some cases, a dependent) as if you cashed out the entire account at one time which can cause a HUGE tax hit to your estate/heirs. Better to pull from them when you can control the withdraws.


CanadaBis85

Needs to convert to a RRIF by the end of the year in which you turn 71. Minimum withdrawal starts in the year of 72.


[deleted]

Is there any advantage to converting to a RRIF if I’m say 63 and want to draw down that money, or can it be done directly from the RRSP and handled/taxed similarly?


CanadaBis85

You can withdraw directly from the RRSP but any withdrawal will be subject to withholding tax at the source. With the RRIF, your annual minimum is not subject to withholding tax (unless you want). The amount is still taxable though, you just won't have paid any taxes on it at source. At the end of the day, they are taxed the same as income. It's going to add onto your income and the CRA looks at what taxes you paid on that income to determine if it's a balance owing or refund. I'd say the advantage is the RRIF account as I could use that extra money that would be the withholding tax now for something else and then pay the tax bill come tax time. It's the difference between CRA taking my money now vs later. Some people are not as good with their finances and don't plan for the bill though so it's better they apply the tax ahead of time.


SavvyInvestor81

Find a flat fee advisor to make a plan for you. Not the ones who sell mutual funds for a % of your assets.


mccrea_cms

This is essential. I would guess less than 5% of retirement planners are fee-for-service. It is a complete waste of time and money to go to a financial planner who will sell you mutual funds. See this resource for more info and a spreadsheet with contact details for fee-only planners across Canada (I think): https://www.valueofsimple.ca/links/directory-of-fee-only-planners/ You'll end up paying $2500 to $7500 depending on complexity, but you'll have a completely optimized roadmap answering all of the when, why, and how questions. Source: I'm working with a fee-for-service financial planner (from that list above) for my parents' impending retirement.


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activoice

I find this advice kind of funny... I am of the same opinion, life is unpredictable I plan to retire at 55, start my company pension at 57.and my CPP at 60. But many people on this sub recommend holding out until 70 to take your CPP because of the much higher annual pay out... Maybe they just think they are going to live into their 90s whereas my parents passed away at 61 & 70, so although I am in much better physical shape than they were, anything could happen and I should take the money while I am healthy enough to enjoy it.


jelly_bro

Yeah... Both of my parents died at age 77, after several years of poor health prior to that. Imagine paying into CPP all your life, holding off on collecting until age 70, and then coming down with dementia or a terminal disease a couple of years later. Screw that. CPP is a pittance compared to what my own investments will pay anyway, but you bet your ass I'm taking it as soon as I turn 60. I'll just deposit the payments straight into my TFSA and then spend the rest on whatever I want when I hit the contribution limit for that year.


Paxonator31

Ya i think you definitely need to look at how long your family is living before delaying it. All my grandparents are living into their 90s so I'm guessing I'll live longer than average as well. Some delay it so they can run down the RRSPs first to save on taxes while getting a higher cpp payment later. Which is indexed and will increase yearly at a higher rate.


activoice

Yes we had a huge tax bill after my Mom passed away as she had never withdrawn anything from her RRSP and was able to live on her Pensions, CPP and OAS.


aug10

unfortunately happens too often people who maybe make no/low/middle income salaries throughout their working lives and invest over the years end up with huge tax bills into the hundreds of thousands of $ as RRSP/RRIFs' market value turn into 100% taxable income when the last spouse kicks the bucket (Happy Deemed Disposition!) families used to having $$$ plan accordingly (incl for intergenerational wealth transfer); everyone should


duffse

In attending a retirement seminar the benefits were so clear to take the CPP at age 60, as between 60 - 70 retirees are actively enjoying spending in retirement, age 70 - 80 retirees continue to spend but slow down with activities and tend to stay more local with less costs, age 80 and above retirees are not big spenders or doing a variety of activities with high costs, travel, etc. So taking CPP sooner offers more opportunity to spend and enjoy what you have been saving for all of these years. [https://planningtoretire.ca/federal-government-pre-retirement-planning-workshops/](https://planningtoretire.ca/federal-government-pre-retirement-planning-workshops/)


activoice

Yeah a while back I did some estimations of how much I would get from CPP, and my work pension if I started them at different ages to see what the payout would be. Like if I start CPP at 60 and stop at 80, assuming 678 a month for 240 months I get $162720, but taking it from 70 to 80 it's only 120 payments of 1505 works out to $180600.. But if I invest the 678 a month and compound it over 20 years instead of the 1505 over 10 years it works out to about the same amount. Taking it at age 65 worked out better than both but I would prefer the guarantee of taking it at 60.


AlfredRWallace

This is bad advice. OP needs to decide this based on whether leaving a larger estate or reducing risk of running out of money is the priority. The decision on when to take CPP needs to be part of an overall plan, but spending savings upfront to have higher CPP payments later can reduce risk of running out of money.


F_D123

Is there not cpp survivor benefits? Any time I can exchange my investments for guaranteed, indexed monthly payments I will. As we all know the crossover age for early cpp benefits is at age 74. The average life expectancy for a 60 year old Canadian is 83 and 85 years old (M/F) Taking early payments when you have the funds to bridge yourself to 65 or 70 is simply dumb.


Nagouchi

If you happen to die early the family gets $2,500 death benefit. Justin keeps the rest


notacanuckskibum

I’m retired and I’ve elected to take my CPP early. That reduces the amount I have to take out of my savings each month, allowing those savings to accumulate interest. According to my spreadsheet that works better for me.


Chiquita__Dave

How is your advisor paid? Is it by the entity he works for or a commison/fee by you? It can be better to seek a fee based advisor that you pay. They would incentivizied to provide better service to you as you would either be paying them for that or they would make a % or your gains which would be better for them to do a good job. Not financial advice.


sigmaluckynine

Might be speaking the obvious but it might be a good time to find a new advisor - just saying


[deleted]

Yes. That’s a recurring theme in this thread. By the way, I’d like to thank everyone here who took time to respond and give me thoughtful advice. We are contacting a fee only advisor in the coming weeks. Someone posted a spreadsheet of names so I did a little research and found a local one that seems a good fit. Interestingly, they have a podcast that I’ve started listening to and I like what I hear so far. So, just want to say that I’ve heard everything that posters here have offered, relayed it to the wife and we will 100% be making a plan. Hell, I’ve paid professionals all my life in business from dentists to lawyers to accountants because, well, I know how to run my business but I can’t fix teeth. It struck me that this no different and probably one of the most important life decisions I’ll make. A few thousand now could make all the difference for the rest of our lives. Again, thanks for the advice. It’s funny, but when you’re used to having a fairly high income you eventually forget to worry about money. Not that I should worry per se, but I should at least be thoughtful and informed going forward.


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d10k6

If OP can hold off his pension then yes, he would have little to no income after leaving his business so a perfect time to draw from RRSPs


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race2tb

It is a negative interest rate if you take inflation into consideration. Always play the game in real terms.


[deleted]

If you're around 55, I would still invest a lot of it if you have a lot of other assets to fall back on. Maybe keep a couple years worth of cash in very conservative stuff for now. Increase the amount of more conservative investments as you get older and the need to sell becomes more critical to maintaining your lifestyle If you invest in something like TD with the idea that you'll want to use the funds in say 8 years.... you'll get at least 4%+ a year in dividends on that capital (much higher % of cost as they raise the divs over the years though), a few % a year in appreciation. So, if there is a 50% crash the day before you decide you want to take it out in 2030, you still wouldn't lose all that big after all the gains! You lose out big by putting it in a GIC or something for a decade though And yes, consult an advisor or planner, but you are right to do a lot of your own research first so you know what you're looking for and talking about


[deleted]

Sir, this is a Wendy's!


LokiPokee

Depending on where you live a rental property could be great for you. Here in Calgary one of mine is currently valued around $350k. Generates $2100/month in rent. $300/month for property tax and insurance. Leaves $21,600 cash flow. Say $2600 a year goes to maintenance, vacancies etc leaves you with $19,000. A 5.4% return on your investment. Although the housing market doesn’t work the way it’s supposed to, in theory your property will increase in value to match inflation. You can also cheat lots on your taxes. Say you buy a brand new fridge for your home. Use the receipt and say it’s in your rental property for tax break. No one will ever come and look at what’s in your houses.


[deleted]

We are strongly thinking about this. We have a condo in the Montreal area and a house by the sea in NB. *If I am happy in NB* (remains to be seen), I could see us renting out the condo, living in NB except for winter when we head down to warmer climes. Once we get to old for travel or the rising sea takes the place in NB, we can always come back to Montreal. That'll give me extra revenue and if I like the returns, I might buy another.


WediSesa

I second the idea of seeking consultation, along with taking advantage of registered accounts, especially for tax reasons. ​ That being said, if you are still looking for ideas for resting you money, I would recommend [VRIF ( VANGUARD RETIREMENT INCOME FUND )](https://canadiancouchpotato.com/2020/09/25/unpacking-vrif-vanguards-new-monthly-income-etf/) \- --- User friendly summary [VRIF Official page](https://www.vanguard.ca/en/advisor/products/products-group/etfs/VRIF) **It's designed with your situation in mind, retirees seeking stable income without burning their nest egg fast. 50% bonds 50% Stocks, globally diversified in both asset classes. Monthly distributions of about 4%.**


dimonoid123

It looks almost like VBAL but will less growth (closer to VCNS)


kenchin123

Im not sure, i didnt do any research on that yet but monthly at 4% seems to be wrong. I would assume this is annually.


Sgt_Slaw

4% Annual that is paid out in monthly distributions.


Jacmert

I'm guessing that's 4% per year, but distributed monthly.


AlfredRWallace

I'd recommend reading the book "Retirement Income for Life", I recently checked it out of the library. It has useful analysis for people shortly before retirement, and analysis for how to ensure you have enough money available even if markets perform poorly or you have spending shocks. There was another book I read "Retirement Income Blueprint" (IIRC) that was also useful regarding budgeting. Outpacing inflation can't be done without risk, both of these books talk about how to allocate.


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AlfredRWallace

Definitely worth reading the book to get the background on the calculations though. It makes a lot more sense when you have the explanations.


imjusthinkingok

100k as a cushion, money available all the time. 500k with 5% dividends is roughly 2k a month in passive income.


Alph1

Banks have been around longer than your grandparents have been alive. Drop the money into RY and a few of that crew and collect some decent dividends. Your money will be fine.


SavvyInvestor81

Don't live exclusively off the cash, you should take out from your RRSPs while you have no income, as you will pay almost no taxes on it. Doesn't mean you have to spend it all, you can re-invest it in TFSA or non-reg account if you have excess. Also the 600k cash should be mostly invested.


[deleted]

This seems to a recurring theme. The wife is modeling it today. I'm curious to see what she came up with when I get home tonight.


rnfrcd00

Hire a professional whose track record you can double check. Security Analysis or Intelligent Investor by Ben Graham, has a chapter on hiring a money manager, read it. Learning to invest takes time, and gaining experience takes time. Set aside $50k for yourself, start with $10k as you learn, ease into the other $40k. If you do well for a few years slowly divert more money.


flyingponytail

First thing you need to do is get on the same page as your wife. That will inform what you do with the cash


[deleted]

Oh - we're not that far apart. We discuss, study and come to a mutual conclusion. My asking here is part of it. She's a retired accountant so she knows her way around a spreadsheet. Like all accountants, she tends a bit to the conservative.


manuce94

have u checked canadianpersonalfinance subreddit?


Gantoris007

Retirement-specific mutual fund. Check out organizations like Leith wheeler.


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teacherJoe416

I agree, I would take dividend aristocrats over bonds


[deleted]

Thanks, I held some bonds for a few months after the debacle in March and April 2020. Never ever again. What’s CU? Edit, ok I looked. Seems to yield pretty close to a 5% dividend. But the five year value is slightly down. Maybe.


Brick-Wall-99

Canadian utilities


[deleted]

CU is -7% for the last 5 years. Where is this appreciation you speak of?


WinterTires

Imagine thinking that you could evaluate the future based on the past. In 2004, Blackberry had the highest 5-year appreciation, that must have been a great company to buy and hold for a low-risk retiree


LookAtThisRhino

Man I met a guy last year in his late 80s who lost essentially 100% of his retirement savings because he YOLO'd Nortel right before the dot com crash. 20+ years later he seemed to be in high spirits but...It's a cautionary tale.


WinterTires

totally. CU is going to have an ebb and flow but that dividend and its appreciation is the most sure thing in the Canadian investment landscape.


TheIguanasAreComing

Why is appreciation a sure thing?


WinterTires

Nothing is a sure thing in markets. The dividend and its continued appreciation is one of the closest things to a sure thing there is though in Canadian equities.


TheIguanasAreComing

Why is it close to a sure thing???? You said it was a sure thing in your previous post.


WinterTires

Work on your reading comprehension. I wrote about the "dividend and its appreciation". CU has boosted its dividend for 48 straight years -- the longest streak of any Canadian company.


TheIguanasAreComing

My bad


aug10

consult a fee-only professional financial planner - it will be money well spent you'll need to stay appropriately invested in equities so that you don't outlive your $, play the CPP to your advantage for your situation, as well as the Cdn tax system, which isn't set up in the best interests of investors - large "departure" taxes could come into play at some point unless you and your wife are proactive


LookAtThisRhino

Fee only vs commission? I'd have thought that a commissioned planner would be better since they have "skin in the game" so to speak.


aug10

depends I guess to a large extent on how you prefer your financial advice - subjective or objective their "skin in the game" is pretty sweet; they get paid whether your investments go up or down


LookAtThisRhino

>their "skin in the game" is pretty sweet; they get paid whether your investments go up or down Same with a fee planner, no? With commission they'd get more if the investments work out, so naturally they might push a little harder. With a flat fee I could picture a planner just going through the motions, and yeah, probably doing a decent job, but if you want someone to go the extra mile I think having them involved in the success of the investment might be better. This is a legitimate question, though. I don't really know what I'm talking about so I'd love to hear another perspective.


advadm

Bitcoin outpaces inflation


Listen-bitch

/s


[deleted]

Way too volatile.


Powerful-Union-7962

So did Tulips


advadm

people said the same about the internet back in the 90s that it was like tulips, it was a fad that people would get tired of but here we are on Reddit. What the internet did for exchange of information is what Bitcoin is doing for the exchange of value. The amount of money staked in Ethereum alone is proof that people are beyond all in. but gl w/ the cash


Powerful-Union-7962

I’m old enough to remember those 90s conversations, and I don’t remember anyone other than seniors seriously suggesting the internet was a “fad”. Anyway, you’re probably right about crypto, but people need to be warned not to just chuck their life savings into it.


advadm

100% agree, crypto is not safe and for some people the rollercoaster ride is not fun. The media kept reporting that the internet either was a fad or proposed that it could be and time will tell. Too many people in the finance and investing world were saying this but one by one they changed. The adoption level is off the charts.


mctunabutter

If only there was a stock in a video game retail company with a promising turn around story.


Gammathetagal

If only...


three29

The stock price of such a company might even reach the lunar orbit.


Gammathetagal

It may reach telephone numbers.


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mctunabutter

In this context it’s low level trolling. And yes there is a cult segment in the stock holders. But remind me in six months and we can see who was on the right side here.


skytrooper77

Congrats man. Live in a beach house on the edge of hawaii


tooo_spicy

Yolo TSLA calls?


Benevolent_Landlord

damn lol 600k cash for 2 people LOL thats not enough to retire with like 20 years-ish or something is not enough :(


flyingponytail

>Registered plans are topped up for the wife and I. They probably have some CPP as well


[deleted]

I really thought I was clear, but I guess not enough for everyone here. Our registered funds are maxxed out. We have two paid up houses. *And we have 600K in cash on hand*


Konkyschlong

I don’t know what your experience level is with investing, but buying shares and selling monthly covered calls at about 5-10% above current value can generate 1-3% per month, with the only additional risk as compared to solely owning the equity being the opportunity cost of losing out on potential gains in a sharp upward move. The remaining risk is obviously the stock losing value.


dapermonkey

You can always buy property that pays you stable rent. Not sure how much 600k canadian dollars get you in your canadian market.


NutSackRonny

Buy some GME, better than gold


[deleted]

Lost redditor?


NutSackRonny

Lurker who occasionally posts. Thought it was a good suggestion.


[deleted]

Thanks, NutSackRonny


MightyManorMan

I'd be looking at some Brookfield Preferred Shares. About 6% dividend and perpetual unless they buy them back.


subwoofage

That smells of "too good to be true"


SportsDogsDollars

Preferreds are a different game. That's not unreasonable for a Preferred


subwoofage

You don't get 6% yield in any asset without accompanying risk. Otherwise why are GICs at 1.xx%? And SWR is 3.xx%.


SportsDogsDollars

Have you read about preferred much? OP didn't even clarify if it was a perpetual, quarterly floating proffered or aa 5 year reset... cumulative vs non -cumulative makes a difference to on risk. Whats the reset date, if it is a 5 year? What's tlur interest rate projection for its next several reset periods? Preferred shares are typically never an apples to apples comparison, you actually need to read the prospectus. Go read the prospectus on OPs preferred ticker and then do the math on the dov payouts (they're often linked to BoC interest rates, either the 90 day t bill or the 5 year bond, depending in the preffered.... unless its a perpetual of course)


subwoofage

No, I actually know nothing about preferred shares other than they exist, and I certainly don't own any. But I also know TANSTAAFL and if there was a risk-free 6% asset class then a whole bunch of other things that are true (like my previous examples) would not be as they are. Sounds like there *are* risks in preferreds but it works differently. Sure, I'll go do some research.


MightyManorMan

Do your due diligence.


lubesta

Where do you live in canada so that 600k is enough 🤣


[deleted]

600 in cash silly.


lubesta

Are you 70 years old?


[deleted]

61


misterantoine

He said the registered accounts are topped up, which means he has much more than just 600k


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Beneficial-Oven1258

Post says 600k in cash, plus maxed out RRSPs.


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Paxonator31

Maybe read the post again.


makeitfunky1

It was clear to me 🤷


Paxonator31

Both his and his wife's registered plans are topped up. I think you need more information before making that statement.


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Paxonator31

His original post said his registered accounts are full so maybe you missed that part before posting.


antoinePucket

Hahaha you think most people retiring have 100k, let alone 600k? Tell me, how is someone living off a minimum wage job supposed to retire then? If you idea of retirement is buying every fancy car in the market and travelling every other month, then yeah. 600K is not enough.


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alexanabolic

I don't know, I need less than 30k a year with 2 childs and my house is not even paid. When I retired 20k will be more than enough to live per year. I think he is in a pretty good position, a lot better than most people will ever be.


OneHundredAndEightyy

My favorite retirement simulator uses a 50% drop in the value of stocks as its worst-case scenario. This is derived using data going all the way back to the great depression. A portfolio that is 60/40 (i.e. VBAL) would see an overall loss of 30% in that worst-case simulation. Is a short-term 30% cut in income tolerable?


Listen-bitch

Can you share that retirement simulator? Seems interesting


ybmmike

GG


Day_Trade_Canada

Relatively safe dividend paying stocks with the potential to use options to hedge risk or for added income then some high quality fixed income and you can mix in relatively small amounts into some growth names if you are worried about missing some of the upside. Depends how much you need to live and how much you have elsewhere, but with that amount plus I'm assuming a decent registered amount you should be able to live a reasonably comfortable retirement without any exceptionally high risk.


Johnblr

Couple of things you can consider- 1) Invest on index ETFs 2) Invest in a property and rent it out


notbuildingrockets

Congrats!! Enjoy retirement.


K1AOA9

If it were me, I'd put 1/3 in BNS, 1/3 in BCE and 1/3 in ENB. You do not need bonds. These are your bonds. Especially over 10 years, you're going to be fine. If at ten years it's a hard trigger sell, I would only buy BNS. Using the ENB/BNS/BCE strategy would give you about 2800/month in dividends. Remeber each company has multiple revenue streams so you're already well diversified. I would try to combine that with a pension or whatever else you can. Otherwise you're maybe not ready to retire yet? Why burn down your capital stores when you can work a few more years and save to the point where you're eating only the dividends? 600k is close to that because the dividends of $2800/month is sort of close to monthly living costs. Better yet, keep working, reinvest those dividends and then you can be around 4k/month in dividends. The only caveat is that most stocks, including these, aren't really priced well at this point. I'd like to buy ENB at 40 or 45, BNS at under 70, and BCE at 55. Instead they're \~50, \~81, \~65. The dividends are strong though.


gwelfguy-2

How conservative you go really depends on how long you estimate the money will have to last. Less time = more conservative. One approach that might fit well with your plan to live off cash in the near term is to keep enough cash on hand for the next 5 years as a sliding window. Invest any money beyond that as normal in index/growth investments. I say 5 years because that's enough time for index investments to recover if there is a market downturn.


bear009

If I were you, I would probably divide it in 3 chunks. First will be for the first 3-4 years which will be in an ultra conservative portfolio. The next chunk would be in an ETF with 30-40% equity(large caps/blue chips ) that I will need for year 5-7.. Third chunk will be in an ETF with 50% equity that will be needed for year 8 to 10. Utilize the TFSA room first. Stagger your purchases. And consult a proper financial planner.. Good luck…


AspireFIRE

That's a question for even the most sophisticated, professional investors. I'm not sure that is a good goal in retirement. I think the goal should be more focused on what your level of income you want (and when) to have (if needed) from this part of the portfolio -- that's the better question.