Tag: asset allocation

RRIF, TFSA, non-Registered…what do you do with each?

RobH1 Comment

My retirement fund is divided amongst a bunch of different accounts: RRIFs, TFSAs, non-registered. And although I present them as a monolith in my monthly updates (latest one here), I don’t treat them the same way and they have rather different things inside them.

I don’t claim to have a fully optimized portfolio; a thoughtful reader was asking me questions about tax implications of my current holdings, and I admittedly haven’t given a ton of thought to that. But I will in a future post 🙂 .

So, in other words, you’re getting my current thinking for what I hold where. It may not be ideal. But at least you see why things are the way they are.

Below you can see how my retirement funds are divided amongst my various investment vehicles. This one is accurate as of January 8, 2026, and is greatly facilitated by tracking my stuff in Google Sheets. There’s a basic template of what I use over here1.

Retirement portfolio, divided by account type, January 2026

So that’s where it’s at. How do I treat the three main segments of the pie?

RRIF

So the RRIF is clearly the largest piece of the retirement pie and will be around for some time, possibly for the rest of my life. At this point in time, I’m only taking RRIF minimum payments which are recalculated every year and are based on my age and the value of my RRIF on December 31 of the previous year.

I am taking RRIF minimum primarily because I want to avoid the hassle of spousal RRSP/RRIF attribution that I talk about here. RRIF minimum is quite a bit less than the expected return of this account given the holdings therein, mostly AOA and XGRO:

I periodically (once a quarter) shift funds from AOA to XGRO using Norbert’s Gambit2. How much? Well, at the beginning of the year, I see how much of my RRIF is in USD. I then multiply that by my RRIF age factor3, divide by four, and presto, I have a quarterly amount I should move.

All of my many RRIF accounts4 have XGRO, and on the day I make my payday calculations, I have a spreadsheet that calculates how many shares of XGRO I need to sell in each account given the current price of XGRO and the amount of CAD happens to be kicking around in a given account. In very rare circumstances, I might (as well/instead) sell AOA if I had a need for US cash5.

The small contribution of ICSH here is because I have a 5% “cash” asset allocation in my portfolio, and I needed someplace to keep this monthly income. RRIF seems as good a place as any, especially since all those monthly dividends are completely tax-free as a result.

In the coming years, the RRIF will take on more and more of my monthly spending needs. Once the attribution time period has lapsed, I’ll probably take more than RRIF minimum from here in an effort to reduce taxes for older me — once I start collecting CPP/OAS as well as RRIF payments, I could find myself in a taxation world of hurt. Making my RRIF smaller will help, but there is no free lunch. You either pay taxes while you’re alive, or your estate will pay them when you’re not.

Non-Registered Accounts

I really have two kinds of non-registered accounts in my retirement calculations, and they have very distinct usages. Let’s see the difference:

The “legacy” non-registered accounts are long-standing accounts that have grown over the years of accumulation. They are held in my name and my spouse’s name and taxed accordingly. These accounts, specifically the one in my name, account for probably 2/3 of my current income. Every time I withdraw from these accounts, I have to account for capital gains, which is fine, since the taxation treatment of capital gains is generous. You’ll also notice that this account is 100% equity. And as previously noted, the dividends thrown off these investments is not particularly noteworthy (not zero, but nothing a dividend-focused investor would get excited about). That’s why you see funds like HXDM and HXS here, to explicitly avoid dividends. This portion of my non-registered funds is targeted to eventually go to zero in the next few years, probably before I start collecting CPP. That’s a tax avoidance strategy, no idea if it will work out in my favour.

The “cash cushion” non-registered holdings are 100% in ultra-short term bond funds, which to my way of thinking, is equivalent to cash. This account exists because I use VPW as a decumulation strategy, and the cash cushion helps smooth out my monthly salary. Sometimes I add to the cash cushion (directly from my other non-registered account) and sometimes I pay myself from the cash cushion. You can read all about how it works at The Mechanics of Getting Paid in Retirement. Here I keep a bit of uninvested cash floating around in an effort to reduce the number of buys/sells I have to do here. The capital gains are quite minimal in these funds since both ICSH and ZMMK stay close to $50/share6 but it’s possible to make minor gains/losses7 depending on the exchange rate and day of month I make the purchase/sale.

TFSA

The TFSA, per the plan prepared for me by my fee-based advisor, (part of the steps I took to figure out that I had enough to retire) is the last account to decumulate. I continue to contribute to my TFSA monthly, like I have ever since TFSAs were a thing. That would be an “expense” I could cut if needed, I suppose. It tilts heavily towards equities8:

Besides XEQT, you currently see XSH, a bond fund9. This exists in order to keep my target asset allocations in line, and because I don’t really want the monthly distributions landing in a taxable account. Perhaps that holding would be better in my RRIF? There’s also XIC here, which is a Canadian equity fund, necessary to offset the heavy US equity contribution made by AOA.

  1. Over the holidays I’ve started on a new template that makes heavy use of pivot tables, which I do like quite a bit. ↩︎
  2. You can track my progress over at Tracking Norbert’s Gambit Costs with Questrade ↩︎
  3. Per https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/completing-slips-summaries/t4rsp-t4rif-information-returns/payments/chart-prescribed-factors.html, it’s “1 divided by (90 minus my age)” until I turn 70. ↩︎
  4. Hopefully in a week or two it will be down to five. ↩︎
  5. I do have a USD bank account (via CIBC) and a US credit card (ditto) to avoid FX charges, but my shiny new Rogers Red card also provides sufficient cashback on USD transactions to wipe out the extortionate FX rates charged by credit card companies. ↩︎
  6. Reverts to around $50 on its ex-dividend date, late in the calendar month. Except January, where ICSH doesn’t distribute at all, instead distributing twice in December. ↩︎
  7. Losses are unlikely because I trade frequently enough to fall under superficial loss rules. Best explanation of how this works at https://www.adjustedcostbase.ca/blog/what-is-the-superficial-loss-rule/ ↩︎
  8. Longer timeframe = higher risk acceptable = more equities ↩︎
  9. Here is a bit of problem. XSH is a short term bond fund; by rights, this should be a long term bond fund since the timeline of the investment is longer. Sigh. I picked this one because (a) it had corporate bonds and (b) it had a very low MER. ↩︎

Retirement Portfolio Annual Review

RobHLeave a comment

Happy New Year! A new year means it’s a good time to take a look at what went on in the retirement portfolio.

Let’s start by comparing the makeup of my portfolio at the beginning of the year versus my last update:

PositionJanuary 2025December 2025Notes
AOA: USD 80/2052.2%51.3%Used for RRIF payments1
XGRO: CAD 80/2020.2%18.6%Used for RRIF payments
ICSH: USD short term bond0%4.4%Cash cushion, plus additional “cash” inside RRIF2
ZMMK: CAD short term bond0%0.6%Cash cushion CAD funds
SCHF: International Equity2.8%1.9%Used for monthly salary; held only in non-registered
XEQT: CAD 100% Equity0%6.5%Mostly in TFSA
HXT: CAD Equity7.4%6.3%Used for monthly salary; held only in non-registered
XIC: CAD Equity5.3%6.1%Did not add or subtract from this holding this year
DYN6005: USD HISA3.7%0%Replaced by ICSH
DYN6004: CAD HISA2.6%0%Replaced by ZMMK
HXS: USD Equity2%0%Sold off from non-registered accounts to fund monthly expenses
VCN: CAD Equity1.8%1.1%In TFSA; reduced in favour of XEQT

What didn’t change much

The portfolio is still dominated by XGRO and AOA (not coincidentally, these are two of my ETF All-Stars) and they both had excellent years, as shown by this tool:

What also didn’t change is my overall approach: decisions for shifting funds is totally dependent on maintaining my asset allocations that haven’t changed either:

  • 5% in cash or “cash like” holdings
  • 15% in bonds
  • 20% in Canadian Equity
  • 36% in US Equity
  • 24% in International Equity

This approach meant that what I sold off in my non-registered portfolio to fund my day to day expenses changed throughout the year; as the year progressed I sold HXDM, then HXS (reducing this to zero), and then finally HXT, all in the service of keeping my assets in line with my targets.

What did change

As a result of changing brokers (QTrade to Questrade), I lost the ability to cheaply hold HISAs. And so I had to change tactics and hold “HISA-like” ETFs instead. (which, on Questrade, like all ETFs, can be bought and sold at no charge). At the same time, I realized that I could increase my returns by shifting more to the US market. Significantly higher interest rates in the US means that I can get more for my “safe” funds, with the small annoyance that I have to deal with USD. You can see the latest rates on my frequently updated page.

As I sold off “pure” equity funds from my non-registered accounts, I had to make changes to keep my bond percentages aligned with my targets3. This is the reason XEQT (a global 100% equity fund) now makes an appearance in the overall picture. The nice side-effect of adding XEQT is that my portfolio is now 76% held in all-in-one funds, up about 4% from the beginning of the year. All-in-ones do the rebalancing for you, which is a good way to avoid bad behaviours.

Behind the scenes I also tried to better focus each of the account types to make things simpler and clearer:

  • TFSAs are now 90% equity, with the rest held in bonds. The rationale here is that TFSAs will be the last things I touch to fund retirement, and hence have the longest time horizon. There are still too many individual ETFs here, and my January resolution is to simplify this further.
  • RRIFs now have only three funds: AOA, XGRO and ICSH.
  • Investment accounts will remain a bit chaotic as most of my retirement expenses are coming out of these. It also happens to be the place where my “free money” payments end up and so there is a small amount of inbound cash to purchase things with. The 2026 plan is to continue to draw down my non-registered funds since my spouse is still working and would be taxed higher on her capital gains.

What’s ahead in 2026: RRIF

My own calculations4 show that my household RRIF-minimum income will be up 19% YoY, a result of good returns in the RRIF (roughly 11% YoY by my calculation) and being a year older. Selling XGRO every month will cover the required payments, and quarterly I will shift a portion of AOA into XGRO, converting the USD to CAD using Norbert’s Gambit.

What’s ahead in 2026: TFSA

January will see an effort to reduce the number of ETFs here. There are multiple CAD equity ETFs which I should consolidate into one, for instance.

We continue to contribute monthly to the TFSAs. The goal is to maximize equity percentage while minimizing the number of funds held. Once the cleanup is done, I expect to purchase XEQT monthly. Questrade introduced automated investing which I’ll likely set up to accomplish this.

What’s ahead in 2026: Non-Registered Accounts

The same strategy as 2025 will continue. Shortfalls in my monthly salary will be covered by selling assets in the non-registered accounts. I ended last year up 2% YoY in my non-registered accounts; I don’t really expect a repeat there. All things being equal, I should be down in my non-registered accounts at this time next year.

  1. Indirectly. I haven’t tried to do a USD withdrawal for a RRIF payment, but in theory it should be possible. Instead I convert my AOA into XGRO a little at a time using Norbert’s Gambit. ↩︎
  2. My VPW cash cushion is about 50% of my cash position in the retirement portfolio. The other 50% of my cash position is inside the RRIF in order to avoid taxation on those monthly distributions. ↩︎
  3. AOA and XGRO are both 20% bonds, not 15%, and so mathematically this has to be offset with 100% equity somewhere in the portfolio. ↩︎
  4. My providers will give me the real numbers sometime in the coming weeks. How much hassle this will be is TBD. ↩︎

XEQT, TEQT, VEQT, ZEQT, HEQT Fee Showdown

RobHLeave a comment

Summary: Although iShares(XEQT/XGRO) and Vanguard(VEQT/VGRO) get all the love, the all-in-ones from BMO and TD are actually the current winners in the “lowest all-in-one fee award”. Given how similar they are to their competitors, I see no reason not to park money there.

I’m a fan of all-in-one1 ETFs in my retirement portfolio. If you’re new to the world of all-in-ones, you might want to start here. There’s at least five competing families of products out there, courtesy of iShares (XEQT, XGRO, XBAL et al), TD (TEQT, TGRO, TBAL et al), Vanguard(VEQT, VGRO, VBAL et al) BMO(ZEQT, ZGRO, ZBAL et al) and GlobalX2 (HEQT, HGRO, HBAL et al). We’ve taken a look at some of them “under the hood”, so to speak, but didn’t really find super-significant differences.

One facet I haven’t looked at yet is the fees each of these companies charge. As I’ve shown elsewhere, small differences can add up if you have significant investments or are holding them for a significant time.

With the news that iShares is reducing their management fees, (BMO did earlier this year) I figured it was time to do a head-to-head fee comparison for the four major families.

Here you have it:

CompanyRelevant TickersManagement Fee3
iSharesXEQT, XGRO, XBAL et al0.17%, effective Dec 18, 2025
VanguardVEQT, VGRO, VBAL et al0.17%
TDTEQT, TGRO,TBAL et al0.15%
BMOZEQT, ZGRO, ZBAL et al0.15%
Global XHEQT, HGRO, HBAL et al0.18%

TD and BMO are the low fee winners at the moment, but the gap has narrowed significantly from earlier in the year. I like low fees, and so I’ve started to invest in these families.

  1. Technically called “asset allocation” ETFs, which is good, since asset allocation is how I view my own portfolio. ↩︎
  2. Formerly known as Horizons, which explains the stock tickers used here. ↩︎
  3. Most of the time I use MER (Management Expense Ratio) to report on fees, but since a few of these companies have lowered their Management fees this year, and since MER is only calculated annually, the MER values only become relevant again on Jan 1. They are a few basis points higher than the management fee, but just a few. Most of the cost is buried in the management fee. ↩︎

News: Vanguard reduces fees on their all-in-ones

RobHLeave a comment

Summary: Vanguard asset allocation funds aka all-in-one funds VEQT, VGRO, VBAL, VCNS. VSIP have reduced their management fees to 0.17%, down from 0.22%, effective November 18, 2025.

It’s a good time to be an all-in-one investor, as I am. New to all-in-ones? Read all about them here.

The summary pretty much says it all. It just got cheaper to own Vanguard’s all-in-one funds. The amount of the reduction amounts to 50 cents for every $10001 invested per year, but compounded over many years, and multiplied by however much you have saved for retirement, it can be a surprisingly large number.

All-in-ones are much cheaper than either roboadvisors or your typical financial advisor, but as we studied before, they’re not without some cost, so fee reductions are always welcomed. Vanguard joins TD and BMO in reducing the cost of their all-in-ones. We looked at the makeup of each of these funds lately; there’s not a huge amount of difference, no matter which one you pick.

Anyway, you may note that Blackrock’s XEQT/XGRO/XINC family is now the most expensive of the lot; there’s no reason for that to be true given the competitive landscape. I would expect Blackrock to follow suit, or if not, I’ll probably be making some moves to get to lower fees, since a lot of my retirement portfolio is currently tied up in XEQT/XGRO. ZEQT/ZGRO I think is the closest in makeup to the XEQT/XGRO family.

  1. Of course, if you only have $1000 saved for retirement, you have other worries. ↩︎

News: Questrade and QTrade changes afoot

RobH1 Comment

I have financial relationships with 4 different brokers, soon to be reducing to 2, if things go according to plan:

  • My long-term relationship with QTrade will come to an end by the end of the year as I move the last of my RRIF accounts out1
  • Questrade holds the vast majority of my retirement savings; they will inherit most of my remaining QTrade holdings this year2
  • Wealthsimple holds a small percentage of my retirement holdings, normally because I’ve been chasing a particularly attractive promotion (free money, or last year, a free MacBook Air)
  • My mother’s estate is held by BMO Investorline and if all goes according to plan (CRA willing), I’ll be done with them early next year as the estate wraps up.

I mention all this because I sometimes get wind of new developments from these providers in near-real-time, if they chose to share those developments with their existing clients. You benefit by hearing about them at the same time I do.

QTrade joins the realm of commission-free brokers

Starting October 28th, QTrade is eliminating trading fees on ALL stocks and ETFs, bringing them in line with Questrade, Wealthsimple, Desjardins, and National Bank. This, combined with their reasonably generous cash back offer3 that runs until the end of the year, makes them a serious contender for your investing dollars. Read more at https://www.qtrade.ca/en/investor/campaign/cashbackoffer.html.

Questrade to ditch Passiv in favour of home-grown tool

One of the things I like about Questrade is their support for Passiv, which I covered here. The main thing I like about Passiv is the integrated dashboard that can span both mine and my spouse’s accounts, especially since Questrade’s native support of Authorized Traders is absolutely abysmal.

This week I received an email from Questrade with subject line “Your Passiv integration will be changing soon”.

Uh-oh.

Anyway, in what I suppose is an effort to make their product “stickier”, Questrade appears to be working on their own Passiv-like “Portfolio Monitoring and Rebalancing Tools”, which are supposed to launch “in 2026”. As a result, the current annual access to Passiv Elite will end at the end of the current renewal date, or on January 30, 2026, whichever is later.

Passiv Elite4 is the tier of Passiv that can do rebalancing trades on your behalf. It’s not a feature I really cared about since Passiv doesn’t model all-in-one ETFs the way I think about them. You might say Passiv is an alternative way of getting the benefits of all-in-one ETFs without actually holding them.

Passiv Elite is $99/year, (which is a bargain compared to the cost of all-in-ones), so I’d expect Questrade’s own tools to be bundled into some tier of their current Questrade Plus offering.

No action required at this juncture, but I’m very curious as to how Questrade’s intended offer will work…and what it will cost.

  1. As mentioned elsewhere, it was mostly because I decided to chase some free money being offered by Questrade at the time. ↩︎
  2. I would have moved everything back in March, but I hit a snag concerning how RRIFs work. In essence, there’s no support offered for changing RRIF providers mid-year. Once the RRIF calculation has been done for the calendar year, your current broker is obligated to pay out the RRIF minimum. If you decide to move RRIF providers mid-year, the current RRIF provider still has to pay you your RRIF minimum for the entire year before allowing the transfer. Read about it here: https://moneyengineer.ca/2025/03/27/cautionary-tale-changing-brokers-when-you-have-a-rrif/ ↩︎
  3. Up to $2000 available for the taking ↩︎
  4. I think this is what I have, currently. I became a Questrade client just before the launch of Questrade Plus and probably got access to the “full” Passiv experience for the current year (March 2026 to be exact) by virtue of the assets Questrade has under their management from me aka “Questrade Elite”. ↩︎