Tag: vpw

man juggling on a tightrope against cloudy sky

What do you have to actually DO to get paid?

RobHLeave a comment

I’ve covered the mechanics of getting paid in retirement at what is a pretty detailed level, but maybe you’re curious about the actual, blow by blow steps of getting paid?

In a typical month, I make 6 sell trades (one for each RRIF, one for the non-registered account) and perform 2 cash movements (one withdrawal from my non-registered, and either a withdrawal from the cash cushion or an inter-account cash movement from the non-registered account to the cash cushion).

The diagram from the previous post1 I’ll include here, since it may make things a bit clearer:

Step 1. Make sure net worth is accurate in my spreadsheet

By the time the end of the month rolls around, this is normally fine. The beginning of the month has a bunch of (of mostly, but not fully, automatically reinvested) dividend payments and reward payments (aka “free money”) so the opening few weeks of the month always require tweaks to share amounts and outstanding cash amounts.

A quick login to Passiv, which connects in real time to all my retirement accounts held at Wealthsimple and Questrade, allows me to do a sanity check of my spreadsheet values versus what’s actually in all of my accounts. In the event there are discrepancies, I fix them in the spreadsheet before proceeding.

That’s what is behind step A in the diagram.

Step 2: Decide the order of priority for liquidating various assets in my non-registered accounts

Every month, I know that I will have to liquidate shares in my non-registered account, but since I have four different holdings to choose from, I have to input which ones are the most important to liquidate first2. This year, I’ve been trying to reduce dividend-paying holdings to reduce that source of income come tax-time. Another factor I consider is how far my portfolio has drifted from the asset allocation targets. Selling a fund to reduce an overweight asset class (e.g. Canadian Equity) is always a good way to take advantage of a needed asset sale.

This is an input for step G in the diagram.

Step 3: Run the Monthly Macro

The monthly macro3 does a bunch of things to help me figure out exactly what I need to do:

  • It plugs my current net worth into the VPW spreadsheet which then generates the VPW suggestion; the macro then squirrels the suggestion away
  • It takes a look at the current value of my cash cushion and squirrels that away;
  • It takes a look at the current value of the CAD/USD FX rate and squirrels that away4
  • It saves the current month’s numbers into a monthly ledger, which allows me to share with all of you things like my salary and net worth over time.

None of that, strictly speaking, is in the diagram, but is a necessary step for Step 4, below.

Step 4: Follow the step by step instructions that result

With the static copies of key bits of data (VPW suggestion, value of cash cushion, FX rate) these now plug into a specially crafted spreadsheet that provides instructions in English, step by step.

  • It tells me how many shares to sell in each of my accounts5
    • How many XGRO6 to sell based on the current share price and current cash position in each of the 5 RRIF accounts (steps E and F in the diagram; the RRIF payment amount is fixed at the beginning of the calendar year)
    • How many and which shares I need to sell in my non-registered account based on VPW’s suggestion (step G)
  • It tells me if I have to move money to my chequing account from my cash cushion or if I have to move money from my non-registered account to my cash cushion. (That’s step D or D’ in the diagram above).
  • The RRIF payments (steps E’ and F’ in the diagram) are automatic; nothing for me to do there
  • Step G’ requires a visit to Questrade’s “Move Money: Withdraw” menu in order to get money into my chequing account

In summary, I have to execute as many as 6 “sell” trades — one for each of the RRIFs7, and one (possibly more8) in the non-registered account. And then there are two “move money” transactions I have to make — one from my non-registered to my chequing account, and one representing step D/D’ (one of the two is always in play).

Step 5: Update my records

This I usually do right away since I have all the necessary data in front of me. That means

  • updating my holdings spreadsheet to reflect the reduction in XGRO in my RRIFs and the reduction of whatever holdings I liquidated in my non-registered account
  • Add the transaction in my non-registered account to adjustedcostbase.ca so I know what my capital gain/loss was.

Step 6: Wait for the Money

The non-registered cash is usually the first to arrive in my bank account, a day or two later.

Wealthsimple is next, and Questrade’s payments inexplicably arrive on different days depending on what I don’t know. Although all 4 Questrade RRIFs are set up with the same payment schedule, the 4 RRIF payments never arrive on the same date.

  1. Ok, I lied, it’s not exactly the same. I decided I didn’t like the D/D’ arrows in the original post since it wasn’t 100% accurate. ↩︎
  2. And usually, the first one listed is the only one sold. My spreadsheet can handle the scenario where there’s not enough shares held to meet the amount I’m requesting. ↩︎
  3. The macro mostly just makes static copies of these values (aka “squirrels away”) and puts them in known places so I can perform other calculations on them. Since my retirement spreadsheet uses live market data — delayed by 20 minutes, that’s what you get for relying on googlefinance(), the value of things is constantly changing. If I didn’t make static copies, it would make it hard to perform consistent calculations. ↩︎
  4. The value of my cash cushion is dependent on the USD/CAD rate since the majority of my holdings there are in USD since the interest rates are better. ↩︎
  5. It doesn’t actually need to do this for my Wealthsimple RRIF since I’m permitted to sell a dollar amount of assets instead of a number of shares with Wealthsimple’s trading tool. Handy, that. But I haven’t yet made the change to the macro. ↩︎
  6. It’s always XGRO I sell since that’s the majority CAD holding in each of the 5 RRIF accounts ↩︎
  7. My spousal RRIF and my spouse’s individual RRIF are both rather modest in size and their monthly payments are sometimes covered by cash on hand. And I have cash on hand there because Questrade doesn’t offer fractional trading for CAD listed ETFs. . ↩︎
  8. My spreadsheet is fancy enough that I can sell up to 3 different non-registered assets, but only in the scenario where I reduce the holding of a given asset to 0. ↩︎
assorted sushi and sashimi platter top view

What’s in my retirement portfolio (April 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 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.

  1. 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. ↩︎
  2. Variable Percentage Withdrawal, my chosen decumulation strategy. ↩︎
  3. 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. ↩︎
close up view of colorful liquids in laboratory glasswares

Are my portfolio’s asset allocation targets “correct”?

RobHLeave a comment

A key aspect of my investment philosophy is to have targets for each of the asset classes I invest in. Because I like to keep things simple, my asset classes are rather broad1:

  • Cash, which includes ultra-short-term bonds (bonds with durations measured in days, not years)
  • Bonds2, which means corporate and government bonds from multiple geographies with various and assorted durations
  • Canadian Equity: Canadian stocks
  • US Equity: US Stocks
  • International Equity: Stocks that don’t sit in North America

The targets I’ve used for a few years now are

  • 5% Cash
  • 15% Bonds
  • 20% Canadian Equity
  • 36% US Equity
  • 24% International Equity

But where did those target numbers come from?

The easy answer is that they are based on the target number of the Canadian 80/20 fund I use in my retirement portfolio, namely XGRO, one of my ETF all-stars. XGRO’s makeup is actually

  • 20% Bonds
  • 20% Canadian Equity
  • 36% US Equity
  • 24% International Equity

The immediately obvious difference between XGRO and my target is the presence of “Cash” in my target, something XGRO doesn’t have3. “Cash” was a recent arrival to the portfolio, a decision I took to accommodate the presence of a Cash Cushion in my portfolio. The Cash Cushion is an integral part of my chosen decumulation strategy, VPW. So rather than keep the Cash Cushion as something set apart from my asset allocation model, I chose to create a new asset to track. 5% was a small and round number, and is about 2x the value of the Cash Cushion today.

That 5% is almost all invested in ultra-short term bond funds so perhaps you could also argue that I never stopped holding 20% bonds in my portfolio4; I just segmented that category a bit more precisely.

But why 20% bonds? Shouldn’t a retiree have a greater portion of bonds to protect against market downturns5? Habit, I suppose. I’ve held 20% bonds for decades now, since well before I retired. I don’t see any reason to change that now. I’m hoping my retirement will go on for decades, and so having a good chunk of equity is a good way to make sure my portfolio returns outpace inflation and offer some protection against outliving my money.

So 80% equity it is; but are the allocations between Canada, the US and International markets the right allocations? Like I said, I basically picked the equity targets to match what the percentage allocations are in XGRO. If I look a bit further at the other *GRO funds (TGRO, VGRO, ZGRO), I find that XGRO is a bit of an outlier with respect to International Equity allocation:

ETF% CAD% US% Int’l
XGRO (Blackrock)203624
TGRO (TD)626.735.617.8
VGRO (Vanguard)253520
ZGRO (BMO)204020
Average for all22.936.720.4

This tells me a few things

  • My US allocation target of 36% is justified by looking across multiple funds
  • My International Equity target is probably too high if I rely on the wisdom of (small) crowds.

Since I like dealing with round numbers, a case could certainly be made for my targets to instead look like

  • 23% Canadian Equity
  • 37% US Equity
  • 20% International Equity

Using these targets and looking at my current holdings would require me to move about 3% of my International equity holdings into Canadian equity.

I can control my equity allocations in normal monthly transactions, somewhat — since a good chunk of my retirement salary is funded by selling non-registered assets, I get to choose (somewhat) what equity class to liquidate. Here’s the problem I see — my International Equity component in my non-registered account is SCHF, which trades in USD. Liquidating SCHF is possible. but the small problem with SCHF is that it’s denominated in USD, and thanks to my current credit card lineup, I don’t have a way (or need) to spend USD natively anymore.

Sigh. Actually, there’s really no good reason for me to hold *any* USD assets in my non-registered accounts. USD assets are now, for me

  • Difficult to spend as USD
  • Problematic because they are counted against my “foreign income”, per CRA’s T1135; hold too much foreign income, and you have to file additional paperwork at tax time. I hate paperwork.

So, in conclusion,

  • I think I will shift my asset allocations slightly, tilting a bit towards Canadian Equity at the expense of International Equity; this will take time as I draw down SCHF from my non-registered portfolio
  • I will get rid of USD-denominated assets from my non-registered accounts. This will start with reversing the decision I took about a year ago when I went with a majority of ICSH in my Cash Cushion.
  1. 5 categories could easily morph into 20 if you were particular about things. For example, bonds could be split by geography, and/or by duration and/or by bond quality. The US and Canadian equity categories could be split into sectors and/or company size. The international equity categories could be split by region, country, sector, company size. The possibilities are endless, and so could the number of assets you actually hold to meet them. I don’t claim that my 5 are the right ones for you, but I’ve used them for quite a while now. ↩︎
  2. For the longest time, and for many earlier posts, I refer to this segment as “Income”. This made some sense in the days where I didn’t track “Cash” as a distinct category. But it’s time to move on. What lives here are bonds, and only bonds. ↩︎
  3. Of course, all ETFs hold some portion of cash, it’s pretty much unavoidable as you shift assets, collect dividends and so on. I don’t worry about this sort of thing; my assumption is that the ETF manager is doing their job and adhering to their published targets. That MER has to be worth something, right? ↩︎
  4. Questrade (my primary broker) doesn’t offer high interest savings accounts; at my previous broker (QTrade) this cash cushion really was cash held in a high interest savings account. ↩︎
  5. And there will always be market downturns. SORR is a common acronym thrown around; it stands for “Sequence of Returns Risk”. Basically this is the admission that there will be market downturns during retirement; SORR is the risk that those downturns happen really early in retirement and blow up your well-crafted plan because you are forced to sell into a down market. My mitigation strategy concerning SORR? I can always find a job if things got really bad… ↩︎
  6. The reason TGRO’s numbers aren’t round is because the other *GRO funds hold 80% equity while TGRO holds 90% equity. I’ve scaled TGRO’s holdings accordingly. ↩︎

What’s included in your “retirement bucket”?

RobHLeave a comment

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!

  1. No FX fees when I use this card. One of three I carry, which I talked about lately. ↩︎
  2. There’s actually a few of these held at different providers (Wealthsimple, Simplii) at the moment; this needs to be consolidated. ↩︎
  3. Renovations that aren’t urgent, for example. ↩︎
  4. 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. ↩︎
  5. 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). ↩︎
  6. 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. ↩︎

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

RobH1 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, 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.

  1. Of late, my need for spending in USD seems not so critical anymore. ↩︎
  2. Typically 1.5% of the amount converted. ↩︎
  3. Variable Percentage Withdrawal, my chosen decumulation strategy. ↩︎