Tag: personal-finance

“How Much do You Need to Retire”?

RobHLeave a comment

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:

  • Necessities: shelter (and associated maintenance) and utilities(heat, light, water, internet, streaming services, phone), food, clothing, exercise, transportation and associated insurance/maintenance2, taxes (municipal3, federal)
  • 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:

CPI for last 30 years, courtesy StatsCan (https://www150.statcan.gc.ca/n1/pub/71-607-x/2018016/cpilg-ipcgl-eng.htm)

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:

  • no realistic plan lasts 30 years11
  • 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.

  1. 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. ↩ī¸Ž
  2. If you own a car ↩ī¸Ž
  3. If you own a house ↩ī¸Ž
  4. A lot of my spending takes place using my credit card so I can collect the free money offered. ↩ī¸Ž
  5. A bit crude, but once in a while it flags something for me: https://www.cibc.com/en/personal-banking/ways-to-bank/mobile-services/insights.html ↩ī¸Ž
  6. Doing this with 100% accuracy would imply you know the date of your own demise, so probably not a realistic objective ↩ī¸Ž
  7. And is currently $1507.65/month if you’re 65 this year. ↩ī¸Ž
  8. 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. ↩ī¸Ž
  9. 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” ↩ī¸Ž
  10. Owning equities is a sort of imperfect inflation hedge since equity prices, like all prices, are influenced by it. ↩ī¸Ž
  11. I’m reminded of the famous quote by Mike Tyson: “Everyone has a plan until they get punched in the mouth” ↩ī¸Ž
  12. 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. ↩ī¸Ž

What’s in my retirement portfolio (Jan 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:

  • 6 RRIF accounts
    • 3 for me (Questrade, QTrade, Wealthsimple)
    • 3 for my spouse (Questrade, QTrade)
  • 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 January 26, this is what it looks like:

The portfolio is dominated by my ETF all-stars, but if you’ve been following along, you’ll see a few changes.

  • As mentioned in a previous post, I did some shifting around and you now see XAW and XIC increasing their contribution to the portfolio at the expense of XGRO.
  • I also tidied up some extra funds that aren’t needed — VCN was replaced with XIC1, and I turfed some small holdings.
  • I sold more HXT than I needed to for my monthly paycheque, and when I discovered the mistake2, I just bought XIC instead.
  • And, I did my quarterly Norbert’s Gambit to shift some AOA to XGRO. And again, I came out ahead!

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 (most are buried in XGRO and AOA, some are in XCB)
  • 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)

Overall

Net worth overall is up month over month, reversing a 2 month losing streak and hitting a new all-time-high:

My VPW-calculated salary resumed its upward trend, also hitting an all-time high.

My QTrade RRIFs should move perhaps this week, but I’m no longer confident about that. More on that once resolved.

  1. Which, in my mind, are equivalent. This post goes in lots more detail. ↩ī¸Ž
  2. I had to do some quick manual calculations because I had already updated my auto-calculating spreadsheet to reflect fewer RRIF accounts. My RRIF transfers are 2 months in progress and counting. I guess trying to move a RRIF near the end of the year was a bad idea. ↩ī¸Ž

CPP and OAS as part of a retirement plan

RobHLeave a comment

One of the confusing questions I got from my international colleagues when I announced my retirement was “what’s the retirement age in Canada”? And, after thinking about it, said, “There isn’t one that I know of”, which is, strictly speaking, correct.

However, for many Canadians (and, I suppose, for many people around the world), “retirement age” equates to “the age where I can collect my pension”. For me, the equivalent statement was “the time when my retirement savings were sufficient1” (you can read about the steps I took here). I don’t have a private pension through my employer, so CPP, OAS and my own savings are all I have to sustain my needs throughout retirement.

CPP (Canadian Pension Plan) and (possibly2) OAS (Old Age Supplement) are two sources of income that will eventually make up part of my retirement income, but not for a while. For the time being, my retirement income comes from a mix of non-registered asset sales (about 2/3 of my 2025 household income) and RRIF payments (about 1/3 of my 2025 household income)3. My advisor suggested waiting as long as possible to collect on CPP/OAS, which is age 70 for both.

But maybe, if you haven’t retired yet, you haven’t really thought too much about these things4? Here’s a quick primer.

What’s CPP and what’s it worth to me?

CPP applies to anybody who has contributed to the plan; how much you contribute annually is captured on your T4 slips. You can see your lifetime contributions5 by logging into your My Service Canada Account. It is the history of these contributions6 that ultimately determine what your annual pension will be in the year you first start taking it.

The first year you are eligible to receive CPP is the year you turn 607; every month you wait after turning 60 increases your monthly payment. The absolute maximum CPP you could collect would be waiting until you turn 708. The Feds lay it all out here.

The absolute maximum monthly CPP you could possibly get as a 65 year old is $1507.65 in January 2026 per the Feds9. Since I retired early, and 18 year-old me worked a part-time minimum wage job, my CPP will be less than that. (The CPP calculation takes your best 32 years of earnings into account).

What’s OAS and what is it worth to me?

OAS (“Old Age Security”) applies to anybody who has lived in the country long enough10. OAS can start at age 65, and be delayed until as late as age 70. Like CPP, OAS rewards those who start payments later than age 6511. You get an OAS supplement of 10% when you hit 75.

The absolute maximum monthly OAS payment in the first quarter of 2026 is $742.31 if you’re under 75 and $816.5412 if you’re over per the Feds. (These amounts are adjusted every quarter in accordance with inflation rates.)

The wrinkle with OAS is that it’s income-tested. If you make too much money, you’re going to have to pay some of it back. If you really make too much money, you’ll have to give it all back. This is commonly known as “OAS Clawback”13.

The magic of CPP and OAS

CPP and OAS payments are both indexed to inflation, for as long as you collect it. This is key for me personally — none of my other income sources are inflation-proof, so the more I can get that is inflation-protected, the better. That’s part of the reason I’m planning on delaying collecting CPP and OAS until I’m 70 — that way, I can maximize the inflation-protected income. The other reason I’m delaying these payments is to try to avoid OAS clawback. The earlier I take RRIF money out, the lower my RRIF income will be later in retirement, when I have to start adding CPP to my income. I have no idea if I will avoid the clawback because it depends on the performance of specific elements of my portfolio. But try I will.

Estimating CPP and OAS for VPW

My decumulation strategy is based on VPW (Variable Percentage Withdrawal). I’ve talked about it previously over here and here. VPW requires, as an input, the value of a future pension. So how do I go about estimating that? Any reasonable estimate might want to ignore what the feds put on the periodic CPP summaries they send out because those estimates are assuming you’re retiring at 65, and working at a similar salary level (of course, if that’s your plan, then it’s perfectly fine — but it wasn’t mine :-))

All good estimates start from the lifetime contributions table you can find at My Service Canada. From there I’ve given a few tools a spin:

PWL Capital Tool

https://research-tools.pwlcapital.com/research/cpp

This tool has a lot of neat features, but be careful. The model bakes in both inflation estimates and wage inflation estimates that are changeable, but not immediately obvious.

CPP Calculator

https://www.cppcalculator.com/

This is one I recommended previously in Tools I Use, but the upload feature has been broken for a while now. It still works by entering it manually, but I now prefer the tool below….

Finiki CPP and QPP Calculator

https://www.finiki.org/wiki/CPP_and_QPP_calculator

The Finiki tool is now my favourite because it’s available as a worksheet (Google Sheets, Excel and Libre Office all supported), and all you need to do is enter in your pension contributions. The current version (2.3) hasn’t been updated with the latest YMPE values, but it’s a trivial exercise to update them.

  1. “sufficient” means different things for different people. You have to have a budget, and you have to have an idea what sort of estate, if any, you’re intending to leave behind. ↩ī¸Ž
  2. I figure my odds are 50/50 that my combined CPP+RRIF income when I hit 70 will render me ineligible for OAS. ↩ī¸Ž
  3. I am not planning on actually working for a living anymore; there are all kinds of rules concerning the interplay of CPP and employment income, but I’m not talking about them here because that scenario doesn’t apply to me. ↩ī¸Ž
  4. Or, if you were a cynic like me, figured that it wouldn’t exist by the time I got to an age where I’d be collecting it. Seems like the pension plan is currently in pretty good shape. ↩ī¸Ž
  5. Starting at age 18. ↩ī¸Ž
  6. Mostly. If you took a leave from employment to raise a family, there is special treatment which could increase your pension. ↩ī¸Ž
  7. You get 36% less of a monthly payout by starting at age 60 compared to age 65. ↩ī¸Ž
  8. You get 42% more monthly compared to age 65. ↩ī¸Ž
  9. You would have to be at maximum pensionable earnings for 39 years between the ages of 18 and 65 to get this amount. (47 years less the 8 worst years of earnings). ↩ī¸Ž
  10. OAS can be estimated by using the Canada.ca calculator which is down at the moment: ↩ī¸Ž
  11. Details at https://www.canada.ca/en/services/benefits/publicpensions/old-age-security/when-start.html ↩ī¸Ž
  12. Which, if you’ve been paying attention, is 10% more than the benefit for someone under age 75. ↩ī¸Ž
  13. OAS is progressively reduced if you make more than $95k in 2026. You get no OAS at all if you make more than ~$155k at ages 65-74, $160.5k for ages 75+. These numbers are modified 4 times a year based on inflation. ↩ī¸Ž

News: Wealthsimple offering free money

RobH3 Comments

Stop me if you’ve heard this before, but yes, there’s another offer out in the market that demonstrates the seemingly never-ending gravy train for the DIY investor who isn’t too dedicated to any particular broker.

It’s Wealthsimple’s turn, again, with a promotion they are calling “The Un(Real) Deal”. Marketing page here, Ts and Cs here, but step one, as in all Wealthsimple promotions, is a registration for the promotion that is painless, but must be done by March 31, 2026. After registering, you have 30 days to initiate account transfers.

In this promotion, Wealthsimple is trying to keep the rewards modest for the deal-hopper, but are pretty darn attractive for the more loyal investor. When you register for the promotion, you pick a lock-in period for transferred-in funds of one of:

  • 1 year, and get 1% cash back payable over 12 months
  • 2 years, and get 3% cash back payable over 36 months
  • 5 years, and get 3% cash back payable over 60 months1

What is particularly noteworthy about this promotion (besides the 3% cash back) is that the maximum you can earn in free money is 3% of five million dollars2. That’s (checks math) $150,000 possible in free money. That is a nice slice of pizza, if you ask me.

It appears that the usual kinds of accounts count as eligible for the promotion: non-registered, TFSAs, RRSPs, RRIFs, RESPs, LIRAs…One missing is spousal RRIFs, but spousal RRSPs are shown, so not sure about that.

If you’re tired of missing out on the gravy train, this could be an even better deal than the aforementioned Questrade deal.

Anyway, there you have it. This is one that I will take a closer look at. If you want a little extra incentive, you can use my referral code and get some additional free cash.

  1. I (meaning chatGPT) ran the numbers at various discount rates (0%,5%,10%) and the present value of 5 year deal always came out ahead. My MSci prof would be so proud of me. At 10% discount rate, the PV of the three options assuming $200k is moved is $1900, $3350, and $4720. ↩ī¸Ž
  2. Yeah, ok, I know most people aren’t moving that kind of dosh, but normally these promotions are capped at a much lower dollar amount. The aforementioned Questrade deal is capped at a maximum reward of $20k, requiring $750k to be moved across 3 accounts. ↩ī¸Ž

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 ↩ī¸Ž
  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. ↩ī¸Ž