Category: RRIF

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What’s in my retirement portfolio (October 2026)?

RobHLeave a comment

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:

  • 5 RRIF accounts
    • 3 for me (Questrade, Wealthsimple)
    • 2 for my spouse (Questrade)
  • 2 TFSA accounts (Questrade)
  • 4 non-registered accounts, (1 for me, 1 for my spouse, 2 joint, all at Questrade)

The view post-payday

I pay myself monthly in retirement, and the charts that follow reflect the view post-payday, which happens around the end of the month. On October 29th after the markets closed, this is what it looked like:

The portfolio is dominated by my ETF all-stars, aka the Magnificent Seven ETFs list.

This is pretty much the same chart as last month. I’m sort of expecting that to be the case month-to-month. Every month there are small reductions in my XGRO position1 since that’s what I sell to make my monthly RRIF payments. There are slightly larger reductions in the non-registered part of the portfolio to pay my salary, but their contribution to the overall picture is pretty negligible. HXT is the largest non-registered holding I have now, followed by ZMMK and XIC. Everything else you see on the chart above is either in my RRIF or my TFSA.

My asset allocation targets are unchanged, namely:

  • 5% cash/ultra short term bonds
  • 15% bonds
  • 23% Canadian Equity
  • 37% US Equity
  • 20% International Equity

The asset-class split looks like this; you can read about my asset-allocation approach to investing over here.

This chart is an almost-perfect reflection of my asset targets, with all categories within 0.5% of the intended allocation.

Plan for the next month

Nothing looming; no planned changes. My spouse’s RRIF is 0.24% larger than mine, which is a tiny improvement over last month; ideally the values of our RRIFs would be equal so we withdraw the same amount and draw the same RRIF salary. Makes things a bit easier to plan.

I have been looking again at perhaps moving XGRO over to ZGRO.T to take advantage of ZGRO.T’s automated payouts, which would simplify my monthly RRIF routine considerably. Unless I can be reasonably sure ZGRO.T will generate enough income on a monthly basis to fully cover my foreseen monthly payouts, there’s really no compelling reason to do that.

Overall

Part of using VPW as a strategy is the need to calculate your retirement net worth on a monthly basis. My net worth took a small hit this month, but the trend remains positive overall:

My VPW-calculated salary has now increased for 10 straight months; it’s nice getting a monthly raise! I should start to see the salary flatline if the net worth remains flattish (as it has for the past 6 months now).

  1. And 4 times a year, that reduction is VERY small since XGRO pays quarterly dividends which are by default used to purchase more of the same. ↩︎
high angle shot of two people working in the office

Retirement taxes versus paycheque taxes

RobHLeave a comment

I’ve talked about how to think about taxes in retirement before (and I re-read my post, it still holds up) but maybe something that isn’t clear how it differs from when you collected a steady paycheque.

The paycheque withholds tax et al at the source; retirement, maybe not

I think this is well understood. The government likes getting taxes all year round, not just in April. And so part of your paycheque is remitted to the government — taxes, yes, but also CPP/EI contributions and all that stuff that no longer applies when you stop collecting a paycheque.

Withholding tax is an excellent example of the “pay yourself first” principle popularized by The Wealthy Barber. You never see the money, so you sort-of forget it’s yours. Anyway, all things being equal, the withholding amounts should be pretty close to correct, but there are all kinds of things that can throw off the calculation: bonuses, charitable giving, and RRSP contributions are the main ones. I never quite understood people who were happy to get a tax refund. That’s your money you’re getting back, and you’ve given the government an interest free loan.

Anyway, in retirement, this may not be the case:

  • If you pay yourself RRIF minimum (as I do) then there is no tax withheld at source. Of course, you can take MORE than RRIF minimum, in which case you will experience withholding tax, just like the bad old days when you were working.
  • If you pay yourself from non-registered investments (as I do), you’re likely creating taxable income if you’re selling assets that have increased in value. And that taxable income contributes to (surprise, surprise) your tax bill. Now it bears repeating that only half of your capital gains attract the CRA’s attention: the other half, and the money you put in, are all yours to keep, tax-free.
  • And of course T-slip capital gains, interest income and dividend income isn’t taxed at the source either. All of it must be accounted for at tax time.

The implication of all this is that you have to be ready to pay some of your retirement salary back to the CRA. I have a special Wealthsimple savings account1 that I contribute to monthly; I “self-withhold” about 15% of my salary, fully expecting to drain this account come tax time2.

You care less about marginal tax rates, and more about overall tax rates

In case you weren’t aware, not every dollar you make is taxed the same way. Canada has tax brackets; each tax bracket has its own tax rate. Thanks to taxtips.ca, you can get a combined federal/provincial look for how your income is taxed:

This table (and most tables like it) are showing marginal rates. The marginal rate is the tax rate charged on the income that sits above the floor of the tax bracket. Lots of people mix up the idea of marginal rates versus overall tax rates. Let’s take a simple example of someone who is drawing a salary or getting their income from a RRIF: both are taxed as “other income” in the table above:

  • Net income: $50,0003. Tax bill: 19.05%*$50000=$9525. In this example, there is no difference between your marginal rate and your overall rate.
  • Net income: $55,000. Tax bill: $9525 on the first $50,0004, and 23.15%*$5000=$1,157.50 on the remainder. Your total tax bill in this case is therefore $9525+$1157.50=$10,682.50. Your marginal rate is 23.15%, but your overall rate is much lower: $10682.50/$55000=19.4%.

My financial advisor I hired pre-retirement suggested I should target a 15% marginal tax rate, blended between my spouse and I. That’s not easy to do on RRIF payments alone, but then of course you have to consider other income sources like capital gains and dividends.

Non-registered investments can pay a salary; but tax treatment is quite different

So I look for my non-registered investments to generous returns — whether those are capital gains or dividends is unimportant. From a tax perspective, capital gains are especially weird because when you’re paying yourself by selling assets, you are typically earning MORE than “just” the capital gain (i.e. the part that is taxable) part. An example may help.

Let’s say you bought $10000 of XEQT in January 2023. As of today (October 22), it would be worth $200005:

And say you sold it all on October 22m — you’d have $20000 in your bank account. Hooray. CRA would say you made a capital gain of $10000. So if that represented your whole taxable 2026 income, that would attract a tax bill of 9.53%*$10000 =$953.00. Thinking about overall rather than marginal tax rates, you’d therefore have an overall tax rate of $953/$20000 = 4.7%! Pretty sweet.

If instead that $20000 was a RRIF withdrawal, and you had no other taxable income, CRA would present you a tax bill of 19.05%*$20000=$3,810.00, an overall tax rate of 19.05%,

Maybe you’re counting on your non-registered investments generating $20,000 of dividends instead. This generates an overall tax credit in this case6!

Retirees are obsessed with how much tax they pay

Since taxes tend to be your single biggest expense in retirement, I understand why. I try to be smart without going to extreme lengths; as I learned managing my parents’ estate, there’s either going to be a tax bill while you’re alive, or a much larger one when you’re dead. Taxes you avoid in the early years of retirement are either going to come due once you start collecting CPP/OAS7, or when you’re dead. RRIFs8 and non-registered accounts are considered liquidated on the day of death, attracting all the income/capital gains in one calendar year, and hence the highest possible tax bracket.

  1. This account does NOT factor into my net-worth calculations. I’ve already, in effect, written it off. ↩︎
  2. And in my case, this I expect will start to be every quarter as I’ll shift to paying tax in instalments. Oh well. ↩︎
  3. Net income is lower than your salary, since everyone has (at least) the personal deduction. ↩︎
  4. using the calculation above ↩︎
  5. And doubling your money in less than 4 years is an excellent argument for holding equities. (Of course, you’ll all be crowing when the floor eventually falls out, but equities do outperform over time…) ↩︎
  6. If you’re in a lower tax bracket, it’s hard to beat dividends. They start to become less efficient as you climb the brackets, especially if you’re collecting OAS since grossed up amount of dividends are use to test eligibility for OAS. ↩︎
  7. OAS clawback is a particular obsession of the retired. ↩︎
  8. Unless you declare your spouse as a successor annuitant; you’ve already done that, right? ↩︎

expressive surprise in black and white portrait

News: Questrade changes how RRIF payments work

RobHLeave a comment

Questrade is my main provider of online brokerage services. They recently (this month) made a change to how periodic RRIF payments work. They unfortunately made no formal announcement about this, and the only reason I know it to be true is thanks to a helpful answer to my Reddit question from (presumably) an employee.

Questrade allows you to set up automatic withdrawals from your RRIF with (sigh) a form that provides options to withdraw monthly, quarterly, semi-annually or annually. As I’ve mentioned previously, I choose to use monthly withdrawals1 since that more closely approximates how I got paid when I was working.

Anyway, every month, Questrade sends you an email reminding you to make sure you have enough cash in your RRIF to make the payment. (Of course, they don’t actually tell you what that amount may be; they assume you know, probably after calling support early in the year.)

Prior to this month, they advised that cash needed to be in the account three working days before the withdrawal date (a date they never mentioned; I guess you’re supposed to know that too). Why three working days were required I have no idea2. Perhaps there’s an abacus powered RRIF processing centre in some corner of Questrade HQ?

All this to say if you didn’t happen to have enough cash in your account on the appointed RRIF withdrawal day Questrade used to:

  • Take the amount you were supposed to withdraw, let’s call it X
  • Divide X over the number of periods remaining in the year (e.g. you missed your February monthly payment: there’s 10 months left in the calendar year, so X/10, let’s call that Y).
  • Add Y to your old monthly payment amount going forward. Y is the new monthly amount.

Which, although a bit unexpected, has some logic to it.

Last week, I got another one of these reminder mails from Questrade, except the wording had totally changed. Now the notion of missing a payment was addressed directly:

If cash is unavailable:
We may still process your required payment on the scheduled date. If your cash balance is insufficient, your account will go into a debit cash balance. If you don’t take action to satisfy the debit balance, we may close positions in your account. If we need to close positions for you, we will charge a $45 fee for each trade we make.

— Questrade email from October 2026.

This is, I would venture, a rather significant change, yes? And the weaselly wording “may close positions….if we need” gives me zero information as to what rules are being applied here and when or if they would ever apply to me. The response to my Reddit post “the payment goes to our risk team for approval” means nothing to me. Will I get paid or won’t I? Will I get charged for my misstep or won’t I?

Anyway, I consider this another black mark for Questrade in the ever-evolving RRIF Support Showdown universe. It’s not the policy itself which annoys me; it seems fair enough, assuming “may” means “we will”. It’s the means in which it was communicated (or more accurately, not communicated) that leaves me cold.

With so many brokers throwing money at you to move funds, it’s hard to justify loyalty to ANY online broker, especially one whose loyalty bonus is coming to an end!

  1. I like monthly withdrawals; it allows me to keep a pretty manual process top of mind since I’m doing it every 30-odd days or so. The other benefit of going monthly is there’s not a huge number of shares being liquidated, so if the market is the midst of some temporary meltdown, I’m not risking a large amount of my net worth at any one time. . ↩︎
  2. When you’re comparing a hipster online broker’s SLA to be less attractive than that of one of Canada’s big banks, you know your bar is awfully low. ↩︎
colorful assortment of french macarons in box

What’s in my retirement portfolio (September 2026)?

RobH3 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:

  • 5 RRIF accounts
    • 3 for me (Questrade, Wealthsimple)
    • 2 for my spouse (Questrade)
  • 2 TFSA accounts (Questrade)
  • 4 non-registered accounts, (1 for me, 1 for my spouse, 2 joint, all at Questrade)

The view post-payday

I pay myself monthly in retirement, and the charts that follow reflect the view post-payday, which happens around the end of the month. On September 30th before the markets opened, this is what it looked like:

The portfolio is dominated by my ETF all-stars, aka the Magnificent Seven ETFs list.

As you can see, I’ve now successfully kicked USD out of my retirement portfolio; it’s completed faster than I originally planned thanks to Questrade’s offer of free Norbert’s Gambit to all Questrade users for a few months. The demise of USD-denominated assets does not mean a demise in the holding of US assets, in case you were wondering. The portfolio is still well exposed to the US equity market, since my asset allocation targets have remained unchanged:

  • 5% cash/ultra short term bonds
  • 15% bonds
  • 23% Canadian Equity
  • 37% US Equity
  • 20% International Equity

The asset-class split looks like this; you can read about my asset-allocation approach to investing over here.

This chart is an almost-perfect reflection of my asset targets, with all categories within 0.5% of the intended allocation.

Plan for the next month

Nothing looming, which given the time I’ve had to spend moving USD out of the portfolio, is a welcome change.

The only thing I’m keeping an eye on is the relative size of my RRIF holdings compared to that of my spouse. From a planning and tax perspective, it’s much easier to manage if the size of our RRIF holdings is equal. At present, my spouse’s RRIF is 0.25% larger than mine, so probably that’s close enough. All I can really do to control this (since one cannot add to a RRIF) is to allocate more equity to one over the other, and cross fingers that the equity portion outperforms the bond/cash portion. Historically this has been the case, but one never knows when the timelines are measured in months!

Overall

Part of using VPW as a strategy is the need to calculate your retirement net worth on a monthly basis. My net worth stayed stagnant month over month but it’s still 20% above when I started on my retirement journey.

My VPW-calculated salary has now increased for 9 straight months; it’s nice getting a monthly raise!

people exchanging money in cantor

Retirement Portfolio is now USD-free

RobHLeave a comment

On September 4th, I sold my last units of DLR1 within my RRIF account and completed my multi-month activity of kicking USD out of retirement portfolio. I ended up doing this about 3 months faster than I anticipated, but that’s because Questrade offered a free two-month trial for Questrade Plus, which included as many free journaling activities2 as you wished during the trial. And since I’m a cheapskate, I figured saving the journaling fees was worth me upping the pace of my USD to CAD conversions.

I asked Claude to take a look at the various gambits I undertook3 and evaluate them. Claude was quite upbeat:

  • Claude calculated an effective blended rate of 1.39946.
  • Claude said I beat the spot rate by roughly +0.15% overall
  • And, as expected, Claude assessed that every single gambit landed within a few basis points of the spot market, much better than what Questrade would have charged me (1.5% or so).

So now, here’s what my various account types look like, in terms of assets. There’s no USD listed ETFs anymore. Here’s what the three kinds of accounts look like.

Let’s recap the major changes, per account type.

Non-Registered accounts

I’m always a bit reluctant to mess around with non-registered accounts since making trades here inevitably lead to capital gains. But the impact in the end was pretty minor.

There’s actually three separate accounts being considered here. Two are legacy investment accounts that have long-term holdings. The other is my so-called “cash cushion” account that is an integral part of my decumulation strategy, called “VPW”. You can read about the mechanics of it here.

So for the cash cushion, I had to get rid of ICSH in favour of ZMMK. I’m giving up roughly 1.2% in annual return by doing this, but I figure at some point the Bank of Canada and the US Federal Reserve will get closer in terms of their interest rates. This had a minor capital gain impact, which was as expected. Both ICSH and ZMMK keep a pretty stable price point (around $50/unit) and pay out monthly.

The bigger issue was getting rid of SCHF from my non-registered holdings, which I had held for a very long time. Selling that was going to trigger a large capital gain that I hadn’t accounted for in my tax calculations. The solution I came up with was pretty nifty, if I do say so myself. SCHF in my model is largely “International Equity” so clearly I was going to have to replace that international equity contribution somewhere. I ended up replacing SCHF with VCN (a Canadian equity holding) and replacing XIC (a slightly different Canadian equity holding than VCN) with VFV in the TFSA account. In essence, I moved my international equity stake out of my non-registered accounts and put it in the TFSA instead.

By buying VCN (a new fund for me) in my non-registered account, I reset the ACB of that fund so selling units a few months from now shouldn’t really attract too much in the way of capital gains. In fact, the first month4 I sold VCN to pay my monthly salary, I took a small loss. So my tax planning should also stay intact.

TFSA accounts

There were no USD assets in my TFSA to begin with, so no changes were needed on that account. I had to do some asset class shifting here while maintaining 100% equity allocation in the TFSA. As mentioned above, XIC (Canadian Equity) was dismissed from the TFSA, and replaced with VIU (which is international equity).

I do have a small desire to convert the TFSA into a custom index (a Questrade feature) to save a bit on the MER imposed by XEQT here. I may yet do this. It will expand the number of ETFs in these accounts since I’ll need to decompose XEQT into its constituent components. This is again a case of me adding complexity in order to save a few bucks…But don’t I owe it to my readership to give it a try?

RRIF accounts

Mainly, the RRIF accounts replaced AOA with XGRO and ICSH with ZST. But since XGRO holds a lot less US Equity than AOA did, the AOA to XGRO conversion wasn’t exact. I had to replace some of the AOA with a US Equity holding (VFV). I chose to use ZST instead of ZMMK in the RRIF for two reasons:

  • I wanted a different ETF in my RRIF as compared to my non-registered. This helps me avoid CRA superficial loss rules.
  • ZST is ever so slightly riskier than ZMMK, which is fine, since the cash position in the RRIF is much more static than the cash position in my non-registered account.

The way ahead

Getting rid of USD assets has simplified my portfolio and my workflow thinking. I no longer have to worry about USD/CAD exchange rates, and my need to use Norbert’s Gambit should be over. It also opens up my universe to other DIY brokers. I’ve been a fan of Wealthsimple, but couldn’t use them for my RRIF accounts since they contained USD assets. Now I can consider Wealthsimple for all my investing needs5.

Working through the mechanics of slowly moving my assets to an all CAD lineup has caused me to probably spend way more time than is healthy looking at my portfolio and making trades. This should come to an end — with DRIP set up across all registered accounts6, the holdings should be more or less on autopilot with only monthly checkins to make sure my asset allocations haven’t drifted too far from my targets.

I’ve updated my posts that talk about ETF all stars and the “Magnificent Seven” ETFs as well, for reference.

  1. Selling DLR is the last step of a Norbert’s Gambit when you’re converting USD to CAD. You can read about the gambit on Questrade here. ↩︎
  2. “Journaling” is the step that turns units of DLR.u (which are priced in USD) into units of DLR (which are priced in CAD). If you’re not a Questrade Plus subscriber, journaling costs $9.95 plus HST every time you do it on Questrade. ↩︎
  3. Ok, not all of them — Claude only connects to the accounts I own, and not those of my spouse. And the last trades haven’t settled yet, so the one I did on September 4th wasn’t showing up in my transaction history. I don’t expect the story is too different if I include the gambits I ran in my spouse’s RRIF account. ↩︎
  4. After making sure 30 days had passed in order to avoid a “superficial loss” in CRA’s parlance. ↩︎
  5. And if they offer a promotional offer that throws free money my way, I’d seriously consider switching brokers again. ↩︎
  6. I don’t use DRIP in non-registered accounts because non-registered transactions need to be logged for adjusted cost base adjustments; I’d prefer to keep these fully under my control to minimize the number of transactions. I don’t mind carrying a bit of cash in non-registered accounts in order to avoid excess trades. ↩︎