Category: Retiring

Isn’t Yield Important in Retirement?

RobH1 Comment

I had an email from a reader this week (via comments@moneyengineer.ca, I read all the email I get) who was curious about the yield of my retirement portfolio. It occurred to me I haven’t really talked much about this topic, so thanks for the inspiration 🙂

A very common approach for retirement investing is to build a portfolio based on high-quality dividend-paying companies. The best example I can think of is the long-standing “Yield Hog” portfolio written about by the Globe and Mail’s John Heinzl. He updated readers at the end of 2025.

So, using the ETF fact sheets1 and my current holdings, I give you the overall yield2 of my retirement portfolio:

    So the overall yield is just a little north of 2%. For a divided investor, this would seem alarmingly tiny.

    If building an income stream from this portfolio was your objective, you’d either have to have a lot of capital, or very modest income needs, as this portfolio is only generating about $20k in dividends for every $1M invested.

    For me, I’m perfectly happy to dip into capital (i.e. sell ETF units) to fund my retirement. The overall growth of the portfolio is my only consideration, and whether that is in the form of dividends (which, in my portfolio, are always reinvested3) or capital appreciation (i.e. the price of the ETF increases) is irrelevant to me.

    Is it possible to build a dividend-focused portfolio just based on ETFs? Sure. But here I do offer a word of caution. The ETF providers out there have learned how to structure products with spectacular-looking yields that either use leverage (and are hence inherently more risky) or boost their yields by using RoC and giving you back some of your own money. So looking at yield numbers alone without understanding what’s inside the ETF is not a good idea. I took a look at one reasonable product (ZGRO.T) in a previous article.

    The Globe has been my go-to trusted source for such things for a long time; they have annually updated ETF lists in various categories, including dividend ETFs. One that jumps out for me on this list due to its very low cost to own4 (which is something I’m a bit fanatical about, admittedly) is XDIV.

    XDIV’s current yield is 3.93%, and holds large Canadian companies like TD, Royal Bank, Manulife, Sun Life, Suncor Energy, Power Corp…In total it holds only 21 companies, with never more than 10% invested in any one company5.

    Just for fun, I did a head-to-head comparison of XDIV versus XEQT using this calculator that is featured in Tools I Use. I chose XEQT even though it’s a smaller portion of my portfolio than XGRO, but is a better stand-in since XGRO holds bonds.

    So here it’s practically a tie. If you reinvested all the dividends for both ETFs, XEQT would have generated about $300 more on an initial investment of $10000 in August 2019.

    But is that really a good comparison? XEQT and XDIV are pretty different:

    • XEQT adds extra fees because it rebalances automatically between its different geographical holdings
    • XEQT invests globally; XDIV is limited to Canada only.

    What if I instead chose to compare the Canadian portion of XEQT to XDIV? (I broke down what’s inside these all-in-ones in a previous article: Under the hood of XEQT et al). XEQT’s Canadian portion is XIC, an ETF that tracks the entire TSX (219 stocks), so let’s run the numbers again over the same time period:

    Here the gap is more noticeable: XIC outperforms by about $1200 in the same time period, assuming all dividends are reinvested. Now, of course, you can see that sometimes XDIV was ahead during this period. I cranked up the timeframe to as far back as I could to see what the results were:

    Adding two more years of retrospective increased the gap by another $800, which is about a 1% per year return advantage to XIC.

    Now of course, you could find counter examples I suppose. But if capital preservation isn’t a concern6, then these results tell me that dividends needn’t be a concern in retirement. Even with my anemic yield stats, my net worth increased in 2025 even accounting for getting paid every month (chart from my latest What’s in My Retirement Portfolio):

    Every month, I sell XGRO shares to fund my RRIF payments. Every month, I sell some non-registered assets to cover the rest of my salary. The TFSA gets a monthly contribution. Selling shares isn’t bad — as long as those that remain keep growing, I can keep spending7!

    1. TEQT isn’t publishing a yield, so I made an attempt to calculate it based on the Dec 31 distribution. This seems a bit lazy on TD’s part: I get that it’s a new ETF, and 12 months of data isn’t available yet, so you can’t show a trailing yield, but you CAN show the forward looking yield based on the most recent distribution. Banks. Sigh. ↩︎
    2. A weighted average. You may wonder about HXS/HXDM — these are “corporate class” ETFs that by design do not make distributions and instead use accounting tricks to bury that growth inside the ETF price. It’s something I use in my non-registered accounts. ↩︎
    3. Either automatically via DRIP or through my own purchases; it’s a bit of a mix at the moment. ↩︎
    4. A MER of 0.11%, a bargain for this sort of ETF. ↩︎
    5. Otherwise, its tracking index (MSCI Canada High Dividend Yield 10% Security Capped Index) has a TERRIBLE name. ↩︎
    6. For me, it isn’t. I’m not looking to leave a large estate. Die with zero! ↩︎
    7. And if they shrink, so does my spending. That’s the VPW way. ↩︎

    DIY Decumulation: Expect Delays, Plan Accordingly

    RobHLeave a comment

    Something I never paid much attention to when I was building my retirement savings were the delays built into the system when it comes to moving money around. The Mechanics of Getting Paid in Retirement: 2026 Edition shows the steps I use to get a monthly paycheque, but it doesn’t show the delays. When I was working, I could predictably expect a paycheque twice a month. No guesswork. Now that I rely on these money movements to do things like pay bills, I’ve become a lot more attentive to where things slow down. Stressing about them isn’t helpful, but knowing about them in advance means you can build them into your plan so you don’t get caught in a cash flow crunch.

    I should preface this by saying that I use Questrade and Wealthsimple for my providers, and how your provider handles things can be quite different, so take these as examples, not as absolutes. So where have I seen things slow down?

    Time between selling an asset and having useable cash

    Here I’m talking about cash as cash, not cash to immediately do another trade, i.e. sell ETF “a” and then use the proceeds to buy ETF “b”. For that example, I think most brokers allow you to sell to buy immediately after the trade executes, at least in my experience.

    Here I’m talking about selling ETF “a” so you have the cash to pay your credit card balance. This is usually a multi-step process. The first step is having access to the cash you gain from the proceeds of a sale. This is generally speaking a business day after the trade executes. So if you sell on Monday, the cash appears in your account on Tuesday. If you have a margin account (which I do for my non-registered holdings), then it has the nice side benefit of providing access to the cash immediately after the trade executes.

    So now that the cash is there in your trading account, you then have to get it to a place where you can spend it. And here there will be a lot of variability depending on who your broker is, who you bank with, and how you actually move the money (EFT, wire transfer, physical cheque).

    For me, I use EFT withdrawals to my CIBC chequing account. And this has delays too.

    As an example, I executed a trade in my Questrade non-registered account to help fund my December paycheque.

    • December 23rd: sold some HXT in the morning, immediately requested a withdrawal to my CIBC account using an EFT. The money was available instantly because I have margin in that account.1
    • December 29th: deposit received to my chequing account
    • # of business days: Dec 23rd (0.5) Dec 24th(1), December 29th (2)= 2.5 days to get my $$$

    I also sold some funds in my Wealthsimple account on December 23rd. I wasn’t able to withdraw anything until the following day since this account isn’t a margin account. But on the 24th, when I made the request via EFT, the money appeared in my chequing account in minutes. This was 1.1 days2 to get my $$$$.

    I do recall when I managed my parent’s BMOI account cash in a non-registered account could immediately be used for bill pay, cheque writing, eTransfers or ATM withdrawals, thanks to their “AccountLInk” service.

    Delays in moving money between accounts at the same brokerage

    In my VPW-driven decumulation methodology, I have a non-registered Questrade account that is exclusively used as the “cash cushion” — about 5 months of rolling average salary, invested in ZMMK and ICSH, two funds that are on my ETF All-Stars page. Every month, I either get paid from this account or I move money into it from my non-registered account. Getting paid undergoes the same delays as I mentioned above: about 2.5 days, but moving money into this account from another account (one would think) is instantaneous, no? No, not with Questrade.

    Typically, it takes a day before the money becomes useable in the destination account. Not so with Wealthsimple, where transfers are instantaneous.

    Delays in getting dividend payments

    All ETFs publish their dividend schedule. For example, here’s what ICSH’S looks like:

    “Ex-Date”, at least for my provider (Questrade) is the date used to indicate a “dividend event” notification. But “ex-date” isn’t when you should look for your dividend payment; you have to own the ETF in question by ex-date to take part in the next dividend payment. And so “Payable Date” is the one of interest, and the lag between the ex-date and the payable date is highly dependent on the ETF in question. Since most of my ETFs pay out either quarterly or monthly, often declaring ex-dividend on the last business day of the month, the first week of January will be active with new dividend funds rolling into my various accounts.

    Delays: Just Roll with it

    While I do find it irritating that my own money gets tied up for days at a time for no discernible reason, I’ve adapted my expectations accordingly and don’t worry about it. In the early days of retirement, be aware that things may not happen as quickly as you expect, so it’s probably a good idea to have a bit of cash flow leeway in the first month or two as you work out the kinks in your own decumulation system.

    1. And no, I don’t get charged interest when I do this. I’m not sure why, but if I did, I would simply wait a day. I just like being able to make the move in the moment — still logged in, the amounts are fresh in my mind…. ↩︎
    2. Fast transfers seem to be part of the Wealthsimple ethos. ↩︎

    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. ↩︎

    What’s in my retirement portfolio (Dec 2025)?

    RobH5 Comments

    This is a monthly look at what’s in my retirement portfolio. The original post is here.

    Portfolio Construction

    The retirement portfolio is spread across a bunch of accounts:

    • 6 RRIF accounts (2 for me, 3 for my spouse, 1 for me at an alternative provider as a test)
    • 2 TFSA accounts
    • 4 non-registered accounts, (1 for me, 1 for my spouse, 2 joint)

    The target for the overall portfolio is unchanged:

    • 80% equity, spread across Canadian, US and global markets for maximum diversification
    • 15% Bond funds, from a variety of Canadian, US and global markets
    • 5% cash, held in savings-like ETFs.

    You can read about my asset-allocation approach to investing over here.

    The view post-payday

    I pay myself monthly in retirement, so that’s a good trigger to update this post. On December 23, this is what it looks like:

    Retirement holdings, December 2025

    The portfolio is dominated by my ETF all-stars; anything not on that page is held in a non-registered account and won’t be fiddled with unless it’s part of my monthly decumulation. Otherwise I’ll rack up capital gains for no real benefit.

    There aren’t really any notable changes this month — AOA’s contribution was down a bit this month, largely due to an unfavourable change in the USD/CAD exchange rate (down about 3% month over month, back down to a level not seen since around May this year). I recalculate the FX rate every month1 since I track my net worth in CAD so I always have an apples-to-apples comparison. I don’t stress too much about the FX rate as it tends to cut both ways. Sometimes it’s a lift to my numbers, sometimes not. In the end, I suppose it all evens out. I tracked my snapshot FX rates starting in February2, just for illustration:

    Monthly USD/CAD rates on payday day

    Plan for the next month

    The asset-class split looks like this

    Retirement portfolio by asset class, December 2025

    It’s looking pretty close to the targets I have, which are unchanged:

    • 5% cash or cash-like holdings like ICSH and ZMMK
    • 15% bonds (almost all are buried in XGRO and AOA)
    • 20% Canadian equity (mostly based on ETFs that mirror the S&P/TSX)
    • 36% US equity (dominated by ETFs that mirror the S&P 500)
    • 24% International equity (mostly, but not exclusively, developed markets)

    The end of the year will mean more distributions from my holdings; in my RRIF accounts they are set to DRIP since I only hold AOA/XGRO/ICSH in these accounts. The rest I redeploy to the asset classes that are short funds; typically this means investing in one of the *EQT funds since the bond complement of the portfolio frequently moves above the 15% target.

    Overall

    Net worth overall is down slightly month over month, but up a little over 10% from the start of the year. Hard to be unhappy about that.

    My VPW-calculated salary took a slight decline, breaking the 7 month growth streak. It ends the year a shade under 6% larger than my first paycheque. Not bad. I don’t recall many years where I got a 6% raise 😉

    Next month will end my relationship with QTrade as I move the final 3 RRIF accounts to Questrade; I had thought December would be the final month, but as you’ll see in my next post, a (hopefully) small wrinkle has delayed this.

    1. Using =googlefinance(“USDCAD”) of course ↩︎
    2. February because I only thought to start tracking that a month in. January’s rate will be lost to the sands of time. Or I could add it back using the official FX rates, I suppose. ↩︎

    What’s in my retirement portfolio (Nov 2025)?

    RobH2 Comments

    This is a monthly look at what’s in my retirement portfolio. The original post is here.

    Portfolio Construction

    The retirement portfolio is spread across a bunch of accounts:

    • 6 RRIF accounts (2 for me1, 3 for my spouse, 1 at an alternative provider as a test)
    • 2 TFSA accounts
    • 4 non-registered accounts, (1 for me, 1 for my spouse, 2 joint)

    The target for the overall portfolio is unchanged:

    • 80% equity, spread across Canadian, US and global markets for maximum diversification
    • 15% Bond funds, from a variety of Canadian, US and global markets
    • 5% cash, held in savings-like ETFs.

    You can read about my asset-allocation approach to investing over here.

    The view post-payday

    I pay myself monthly in retirement, so that’s a good trigger to update this post. On November 25th, this is what it looks like:

    ETF Breakdown of retirement investments, November 2025

    The portfolio is dominated by my ETF all-stars; anything not on that page is held in a non-registered account and won’t be fiddled with unless it’s part of my monthly decumulation. Otherwise I’ll rack up capital gains for no real benefit.

    No notable changes this month; HXT is down slightly because that’s the fund I sold in my non-registered account this month to help pay the bills. I’ve sold quite a few shares of this fund this year and I’m seeing the capital gains mounting, but it’s around where I expected to be. I try to keep taxes owing reasonable; nonetheless I’m guessing I will certainly be moving to quarterly instalments in FY 2026; that’s the downside of having no withholding tax of any kind this year.

    Plan for the next month

    The asset-class split looks like this

    It’s looking pretty close to the targets I have, which are unchanged:

    • 5% cash or cash-like holdings like ICSH and ZMMK
    • 15% bonds (almost all are buried in XGRO and AOA)
    • 20% Canadian equity (mostly based on ETFs that mirror the S&P/TSX)
    • 36% US equity (dominated by ETFs that mirror the S&P 500)
    • 24% International equity (mostly, but not exclusively, developed markets)

    All looks to be in order from an asset allocation perspective, no need to do anything here. Cash is slightly elevated as a result of the pending closure of the three remaining QTrade accounts and will drift back to the normal 5% over the coming few weeks, I expect.

    Overall

    Net worth overall stopped its 6 month winning streak and I’m down slightly month over month. But I will reiterate: my net worth is still growing even though I’m taking a living wage every month. You might think that “decumulation” means “a steady reduction in net worth” but it needn’t be the case. And, in my particular case, my retirement income will include no pensions, so it’s probably a good thing that it keeps increasing overall.

    My VPW-calculated salary continues to grow for the 7th straight month in spite of the step back this month in my net worth. That’s a feature of the “cash cushion” that is integral to the VPW withdrawal. It serves as a shock absorber to the monthly ups and downs of the stock market.

    Next month will end my relationship with QTrade as I move the final 3 RRIF accounts to Questrade2.

    1. My QTrade one is no more, transferred to Wealthsimple to take advantage of their Summer promotion. ↩︎
    2. I had hoped to move these to Wealthsimple and generate more free money, but alas, they still don’t support self-directed spousal RRIFs, which is very odd indeed. ↩︎