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 retirement1, so that’s a good trigger to update this post. On April 24 at mid-day, this is what it looked like:
The portfolio is dominated by my ETF all-stars, (and if not an all-star, they are probably on the Magnificent Seven ETFs list). The charts look almost identical to the previous month, in spite of some conversion of AOA to XGRO. (I use Norbert’s Gambit to move USD denominated funds into CAD on a quarterly basis since my spending is all in CAD).
Plan for the next month
The asset-class split looks like this; you can read about my asset-allocation approach to investing over here.
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/income (most are buried in XGRO and AOA, rest are in XCB)
20% Canadian equity (mostly based on ETFs that mirror the S&P/TSX — HXT and XIC)
36% US equity (dominated by ETFs that mirror the S&P 500)
24% International equity (mostly, but not exclusively, developed markets)
The alignment with target is what drives my investment decisions; and here I see that the international equity portion of my portfolio has drifted 1% below target, which is usually the threshold whereby I start to pay attention. Do I need to take action to increase my International Equity portion, or is my target something to reconsider? I have some thinking to do.
Overall
Part of using VPW2 as a strategy is the need to calculate your retirement net worth on a monthly basis. Last month’s meltdown is yet another speed bump that we’ve managed to survive, and April 2026 brings me to another all time high of my retirement net worth, as compared to January 20253.
My VPW-calculated salary continues to increase, albeit at a more modest rate, as expected.
Questrade, although my RRIF settings are for the last day of the month, seems to need a lot of time to process the payment; I’ve learned that unless I have cash in the account at least 3 business days prior to the last business day, the automatic payment won’t happen. ↩︎
Variable Percentage Withdrawal, my chosen decumulation strategy. ↩︎
In constant dollars. I should really adjust my net worth to show inflationary impacts but it’s more calculating than I feel like doing at the moment. ↩︎
My monthly retirement salary is calculated using a methodology called Variable Percentage Withdrawal, or VPW for short. You can read about the methodology over here, and you can follow an excellent real-time illustration of how it works over at https://tinyurl.com/vpwForwardTestFiniki.
Part of the “how it works” is calculating your total retirement savings on a monthly basis. For me that includes the real-time value of:
5 different RRIF accounts (3 for me, 2 for my spouse)
2 TFSAs (1 for each of us)
3 non-registered accounts (one for me, one for my spouse, one that serves as VPW’s cash cushion)
But what’s not in it?
My day to day chequing accounts
A rainy-day savings account
A tax savings account
A short term investment account
Since I’m continually talking about what’s in my retirement portfolio (most recently here), I figured a few words of other assets I have might be helpful.
My day to day joint chequing account
This is the account my spouse and I use for day to day banking. It’s an account we’ve held at CIBC for decades. It’s the kind of account that charges no fees as long as a minimum balance is maintained. It doesn’t pay any interest on balances. I could still conceivably use it to write physical cheques, but I can’t remember the last time I used it for that. Like most day to day banking, it has inputs and outputs:
Inputs: RRIF payments, payments from my non-registered retirement accounts, my spouse’s salary, eTransfers
Outputs: Most bill payments (subscriptions, utilities, insurance, credit cards, taxes, charitable donations), eTransfers, transfers to other accounts
As I build my relationship with Wealthsimple, some of the day-to-day duties are being shared — depending on cash flow I will sometimes pay bills from Wealthsimple, and if my CIBC balance gets too high (not often, but it does happen sometimes) I will move money from CIBC to Wealthsimple since Wealthsimple pays interest and CIBC does not. And if I’m traveling in a foreign country, the Wealthsimple credit card comes into play1, and balances for this card need to be paid from a Wealthsimple account.
My rainy day savings account
Every month, without fail, I redirect some funds to my rainy day savings account2. This is a separate account that pays interest. The rainy day fund pays for unexpected (but never ending) expenses. These could be car related (major repairs), house related (renovations, repairs), or sometimes a large splurge (vacation related). There isn’t a hard and fast rule as to when to apply rainy day savings, but a good starting point is when the cash flow of the joint chequing account looks like it’s heading to dip below the threshold where bank fees start getting paid for day to day banking. I hate all banking fees. Discretionary3 spending from the rainy day account is a joint decision.
My tax savings account
Every month, without fail, I direct some funds from my chequing account to the tax savings account. As a retiree, my only income comes from
Monthly RRIF minimum payments, which get no special tax treatment4. It’s like income. The big difference between a RRIF paycheque and a salary paycheque is that a typical salary paycheque has tax withheld at the source, CPP payments, EI payments… A RRIF paycheque has none of that.5
Payouts from my non-registered accounts, which also don’t come with any withholding tax. Every payout typically6 generates a capital gain and even with a 50% tax break on capital gains, it adds up!
So yeah, there’s a good chunk of income coming in (all flowing in to my day to day chequing account) but no taxes. So to cushion the blow in April, I’ve set aside funds to pay the looming tax bill. And for simplicity, I keep this separate from other accounts so there’s no temptation to “borrow” from it or to “forget” to make a payment. Payments are automated, direct from the chequing account every month. Wealthsimple makes this sort of thing quite painless to set up. And it’s a straight savings account, paying a small amount of interest, about 50 basis points below Bank of Canada overnight rate.
Short term investment account
This is something I’ve set up after getting a small inheritance. I haven’t decided what to do with this money, but while I think about it, I have it invested in an account with a reasonable return without taking on too much risk. It’s like the rainy-day fund, but with a likely longer time horizon.
The firewall between retirement savings and everything else remains in place. But everything else is a bit more complex than you might expect at first glance!
No FX fees when I use this card. One of three I carry, which I talked about lately. ↩︎
There’s actually a few of these held at different providers (Wealthsimple, Simplii) at the moment; this needs to be consolidated. ↩︎
I’m ignoring the fact that if you’re over 65 (I’m not) then you can split RRIF income with your spouse however you like. Because I planned ahead, my spouse and I are both the same age, and have very nearly the same RRIF value saved up, so even once I turn 65, the splitting may not be needed. ↩︎
To clarify, if you take RRIF minimum payments (as I do) then there is no withholding tax. If you take more than RRIF minimum, then there is, and the amount withheld will depend on how much above the minimum you go. Full and complete rules outlined by the CRA (prepare coffee before reading). ↩︎
A lot of the things I hold in my non-registered account I have held for a long time. And since it’s mostly boring index funds (I covered what’s inside a while back), they tend to increase in value over time. ↩︎
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, so that’s a good trigger to update this post. On March 30, this is what it looks like:
The portfolio is dominated by my ETF all-stars, (and if not an all-star, they are probably on the Magnificent Seven ETFs list). This split is before all the quarterly dividends have paid out. AOA, XGRO, XEQT, XIC all have a quarterly payment that collectively might skew the numbers a bit — I have all these investments on DRIP so I just buy more of the same. All that to say that there weren’t big changes month to month; my USD holdings got a bit of a boost this month thanks to a favourable exchange rate. (A lot of my retirement holdings are in USD, so the FX rates matter somewhat). Here’s what the USD has looked like in CAD since my retirement:
Plan for the next month
The asset-class split looks like this; you can read about my asset-allocation approach to investing over here.
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/income (most are buried in XGRO and AOA, rest are in XCB)
20% Canadian equity (mostly based on ETFs that mirror the S&P/TSX — HXT and XIC)
36% US equity (dominated by ETFs that mirror the S&P 500)
24% International equity (mostly, but not exclusively, developed markets)
The alignment with target is what drives my investment decisions; seeing the chart above tells me there’s no movements needed, which makes things simpler.
Since we’re just about in to the 2nd quarter of the year, it’s time for me to move some AOA into XGRO using Norbert’s Gambit1. The Gambit has worked out pretty well for me so far; I track my effective FX rate every time I do it, and it’s always less than relying on the instant (and relatively expensive) FX conversions offered by my broker2.
Overall
Part of using VPW3 as a strategy is the need to calculate your retirement net worth on a monthly basis. As you can see below, the most recent market gyrations have had a bit of an impact on the bottom line, taking me back to a value I haven’t seen since September last year:
But my VPW-calculated salary, which has a built in shock absorber (aka cash cushion), continued its upward trend nonetheless:
I’m expecting to take a pay cut at some point if the markets fail to recover, but pay cuts are an expected outcome of using VPW as a strategy. The “V” is for “variable”, after all. At this point, I’m still taking over 10% more than I did a year ago, so no matter how you slice it, things are more than on track.
Of late, my need for spending in USD seems not so critical anymore. ↩︎
4 non-registered accounts, (1 for me, 1 for my spouse, 2 joint, all at Questrade)
You will notice that QTrade is no longer in the mix. I successfully moved the last RRIF accounts during the month; I learned a lot in the process. QTrade was the victim in the chase for free money offered by Questrade last year; based on current offerings, I’d say that QTrade still has an edge in terms of user experience over Questrade. I’ll go into more detail in a future post.
The view post-payday
I pay myself monthly in retirement, so that’s a good trigger to update this post. On February 28, this is what it looks like:
The portfolio is dominated by my ETF all-stars, (and if not an all-star, they are probably on the Magnificent Seven ETFs list) but if you’ve been following along, you’ll see a few changes.
I dropped XAW since I realized I didn’t need it if I was smarter the ratios of holdings I already owned (XEQT/XIC/XCB). Less is more.
I sold XIC instead of HXT in my non-registered account this month to help pay the bills because I reasoned that eliminating its dividend payouts would be better from a tax perspective2.
Plan for the next month
The asset-class split looks like this; you can read about my asset-allocation approach to investing over here.
It’s looking pretty close to the targets I have, which are unchanged:
5% cash or cash-like holdings like ICSH and ZMMK
15% bonds3 (most are buried in XGRO and AOA, rest are in XCB)
20% Canadian equity (mostly based on ETFs that mirror the S&P/TSX — HXT and XIC)
36% US equity (dominated by ETFs that mirror the S&P 500)
24% International equity (mostly, but not exclusively, developed markets)
I am mulling over making a small tweak to these percentages, increasing US equity exposure at the expense of International equity based on some calculations I’ve done4 but this is neither urgent nor will it be massively impactful to the overall picture.
Overall
There is a bit of an anomaly this month that I should mention. A number of readers have questioned my wisdom of contributing monthly to a TFSA in retirement. From a tax-free growth perspective, it would be far better to make the contribution at the beginning of the year. And many studies have shown that lump sum investing provides better returns than spacing them out. And so, I have taken their advice5 and made all my TFSA contributions for the year this month. And since my TFSA is part of my net worth, there’s a bump being caused by that contribution.
And so, net worth overall is up month over month, a two month winning streak.
One spousal, one individual. One at Wealthsimple because (a) I like their user experience and may consider them as my primary broker in the future and (b) they offered me free money and a laptop to move some fees their way. I can be bought. ↩︎
HXT does not pay dividends and instead uses swap contracts to convert them into capital gains, which receive better tax treatment for me ↩︎
This was the title of a recent webinar I attended via PWL. You can watch it yourself over here: https://www.youtube.com/watch?v=pQl6n4zepys. I don’t think I learned a ton from it — the short answer? “It depends”. “On what?”, you may ask. Here’s some things that influence the answer to the question:
It depends on HOW you live.
Put another way, “what’s your budget in retirement1“? This is a question that many people don’t have an answer to. There’s a few buckets to think about, it’s not intended to be exhaustive:
Medical expenses (drugs, dentists, optometrists, physiotherapy)
Entertainment (eating out, shows, memberships/user fees)
Travel (transport, housing, activities)
Charities
One thing you don’t have to worry about is setting aside money for an RRSP, since once you’re retired, that’s no longer a thing. But don’t neglect the need for a savings fund for unexpected larger expenses. We always keep a “house fund” that gets a monthly payment that we don’t touch for anything other than home renovations or repairs.
Your bank/credit card4 statements5 might be a good place to see what your typical spending looks like.
It depends on where you live
Live in Toronto? Vancouver? Yeah, that’s not cheap. But if you were willing to move to, say, Thailand or a low cost Canadian city, you might be able to spend a lot less on housing. But since most people aren’t willing to uproot, these costs are known, or can at least be reasonably estimated. And if you’re staying put, then will you downsize? When?
It depends on whether you have a pension outside of CPP/OAS
And I’d add, “and it depends if that pension is indexed to inflation”. (The CPP and OAS are, which is why they are great).
It depends on how long you’re going to live
Not predictable, obviously. The oft-cited “4% rule” of retirement assumes a 30 year retirement. That’s living until age 95 if you retire at the “usual” age of 65. When I engaged a financial advisor in the lead-up to retirement, the charts stopped at age 95 as well.
It depends on whether you want to leave an estate to your beneficiaries
Want to die with nothing6? Then you need less money than if you want to leave assets behind. It’s a pretty fundamental question. And if you want to leave assets behind, then how much? And to who? (You do have an up to date will, right?)
It depends on what your CPP and OAS payments are likely to look like
CPP is dependent on how long you’ve been contributing to the plan, up to a maximum that is published annually7. You can take CPP as early as age 60, and as late as age 70, with penalities/bonuses accumulating every month. CPP needs to be applied for before the cheques start rolling in.
OAS is dependent on how long you’ve lived in the country. If you’ve lived here for 40 years or more, then you qualify for the maximum payment of $742.31 at age 65 and automatically starts at age 658 (for most people) unless you specifically ask for it to be deferred.
It depends on how much income you’re intending to make in retirement
The CPP isn’t designed to pay a living wage9. For this reason, many people “ease” into retirement by working part-time or on short-term contracts. This income impacts the answer to the original question — obviously, if you are earning money, then the retirement nest egg can be smaller.
It depends on what your retirement assets are invested in
This, in my view, is frequently overlooked. The fact is that retirement can be quite long, and assets invested in a retirement portfolio still have growth potential. My retirement assets are 80% equities, 15% bonds, 5% cash. This provides me with more growth potential at the risk of having to weather periods of market volatility. I’m comfortable with that degree of risk, but others may not be. Having a lower exposure to equities means your nest egg needs to be bigger.
It depends on future inflation
Inflation can fluctuate a lot over the course of retirement. Take the last 30 years as an example:
Inflation is really the biggest concern in my retirement since most of my current income is not inflation-protected10.
My approach? Knowledge and a willingness to be flexible
What kind of knowledge?
I had a sense of what my budget desires were
I knew my retirement portfolio was going to stay 80% equities
I knew I had no pensions outside of CPP/OAS. With advice from my advisor, this lead to the current plan to defer these pensions to age 70 so I can maximize my inflation-protected income.
My advisor advised me that I had enough saved up that I could retire
But I gained additional, non-data-driven knowledge:
that market returns are highly variable12, that inflation is highly variable, that my personal spending budget is highly variable
that I have always, always, always, adapted to life changes (income, expenses) by either being looser or tighter with money.
The decumulation strategy I use (VPW, Variable Percentage Withdrawal, talked about here) is deceptively simple, but requires you to be flexible, as your monthly calculated salary is based on your net worth. My salary has generally ticked upwards in the past 12 months, but it could just as easily turn in the other direction in the event of a sustained market downturn. I’ve decided I can live with that. And if you want to see a much longer test in action, check out longinvest’s VPW forward test at https://tinyurl.com/vpwForwardTest.
My final thoughts: be suspicious of a specific answer to “how much do you need to retire”? It depends on so many factors, including your own propensity to adapt to changing conditions, that a simple answer doesn’t seem possible — or reasonable.
And does it change over time? I expect my budget needs are higher now than they will be in the future, when presumably I’m less able/willing to travel. ↩︎
Doing this with 100% accuracy would imply you know the date of your own demise, so probably not a realistic objective ↩︎
And is currently $1507.65/month if you’re 65 this year. ↩︎
This one thing I did learn from the PWL webinar: that for most of us, unless you take action, the OAS will start when you turn 65. ↩︎
Per the CPP website (emphasis mine): “The Canada Pension Plan (CPP) retirement pension is a monthly, taxable benefit that replaces part of your income when you retire” ↩︎
Owning equities is a sort of imperfect inflation hedge since equity prices, like all prices, are influenced by it. ↩︎
I’m reminded of the famous quote by Mike Tyson: “Everyone has a plan until they get punched in the mouth” ↩︎
One year after paying for my retirement plan that informed me I was still three years from retirement, I retired. Why? My retirement savings had blown past “the number” I was advised to hit. And, after a year of retirement, my net worth is 10% higher than when I started retirement. The market sometimes works in your favour. ↩︎
