Tag: vpw

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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. ↩︎
a tree stump on the seashore

Why I’m dubious about the “cash wedge”

RobH2 Comments

The cash wedge, as the name may imply, is a chunk of cash (i.e. liquid assets that are safe to withdraw at any time, in any market, the cash under the mattress being the 0% interest option1) that allows you to survive market downturns. The concept comes up again and again in reading the personal finance blogs and media. Here’s a typical treatment2: https://www.sunlifeglobalinvestments.com/content/dam/sunlife/regional/canada/documents/slgi/810-4986-10-20-cashwedge.pdf

And the article linked above has some quite specific recommendations, which is typical. The details will vary a bit from source to source, but let’s keep rolling with Sun Life.

  • Put about one year of expenses in a money market account (I would add: or HISA)
  • Put another two years of expenses in something slightly less liquid (e.g. GICs, bond funds)
  • Invest the rest “to match your individual investment profile”. This, I think, is supposed to imply some percentage of things that aren’t cash (e.g “equity”), but here is where the vagueness begins…

I have some issues with this first bit, which you may find surprising. After all, doesn’t my own retirement allocation strategy have a “cash wedge”? It does have cash, and it’s true — until I actually stopped earning a salary, I had NO cash in my retirement savings. It was strictly 80/20 (equity/bonds). Once I decided to use VPW3 for my decumulation strategy, I saw I would need to have what they called a “cash cushion”. I formalized it by adding 5% cash to my overall retirement asset allocation.

What I have in my retirement portfolio is 5% “cash” (actually, ultra short term bond funds, but close enough), 15% “bonds” and 80% equity (with targets by geographic region for USA, Canada, and everywhere else). But this 5% cash position isn’t a cash wedge since the amount of cash I hold will vary with my net worth. It’s a fixed percentage. If times are good, I add cash. If times are bad, I subtract cash. Mostly I’ve been adding cash in retirement, since my net worth has also increased. The wedge strategy suggests you keep the amount fixed, regardless of net worth.

This downside of keeping a static amount of cash set aside is that it could become either a vanishingly small portion of your savings (which means more limited downside protection), or a very large portion (which means limited growth opportunities) of your retirement savings over time.

This is, in the end, not the main objection I have. The big problem I have with the “wedge” idea is that too many questions are left unanswered and unaddressed:

  • If you are paying yourself from the wedge, when do you top it up?
  • Some variations of the wedge idea suggest that you pay yourself from the wedge “when markets are down”. “Down” compared to what? How far is “down”. When does “down” become “up” again?
  • In any case, the wedge should be replenished. How frequently? From where?

Maybe some people have figured out rules and procedures to answer these questions. My fear is that new retirees set up the wedge but then are left on their own to make decisions about when, where, and how much to draw down. And this sort of decision making is what I would call “timing the market”. Which, if you’ve been reading this blog for a while, is something that I strongly believe simply cannot be done4.

My retirement methodology, based on VPW, takes all the potential for bad behaviour out of my hands:

  • My cash position is always a fixed percentage of my net worth
  • How much I withdraw every month is based on my net worth. If markets are bad, I spend less. Same as when I worked in sales and had a bad quarter/year: less quota bonus means less spending..
  • There is no temptation to time the market, since every month is more or less the same
    • Sell XGRO from my RRIFs5
    • Sell additional non-registered assets6 to reach my recommended monthly salary
    • Augment or subtract from my cash cushion as needed7
    • Make additional trades to pull my asset allocations back into line if needed8

The longer I live my retired life using VPW, the more I find to like about it. But happy to hear from you if you think you’ve found a way to use cash effectively without trying to guess where the market is headed. Hit me up at comments@moneyengineer.ca!

  1. Or like most big banks ↩︎
  2. And although Sun Life and their financial products are not something I would wish on my worst enemy, the ideas expressed in this article can be found in lots of sources. ↩︎
  3. “Variable percentage withdrawal” which is a methodology that considers age, future pensions and current asset allocation to generate a sustainable income flow. ↩︎
  4. For about 2 years now, I’ve been reading about the imminent market crash. I’m still waiting, now worth 20% more than when the first rumbles started, and so now I can survive a 20% decline in the market and be exactly where I was 2 years ago, except that I’ve been drawing a generous salary the whole time. I’m not saying that there isn’t a crash likely coming at some point, but no one can say when that will happen. If you stay invested, you tend to be rewarded. Leaving money sitting idle means that you have to guess right twice: once that the crash is imminent, and once when the bottom is reached. ↩︎
  5. Which reduces all the asset classes I track except cash. Cash grows rather slowly so every once in a while I have to buy a little more to keep the 5% in line. ↩︎
  6. Here I do exercise some discretion over what asset(s) are liquidated, but normally I just sell the asset class that is the most overweight in my portfolio. ↩︎
  7. The full monthly workflow is described in The Mechanics of Getting Paid in Retirement: 2026 Edition. The VPW methodology tells me exactly how much to manipulate my cash cushion. ↩︎
  8. Trading is free on the platforms I use, but I don’t obsess; as long as the assets are within 1% of targets, I don’t make additional changes. ↩︎
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!

vibrant crayola crayons in box on white surface

What’s in my retirement portfolio (August 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 month1. On August 27th before the markets opened, 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).

More progress has been made on my plan to kick USD out of my retirement portfolio; it’s proceeding faster than I originally planned thanks to Questrade’s offer of free Norbert’s Gambit to all Questrade users for a few months. I’m expecting that it’ll all be gone by the end of September.

AOA is largely being replaced by XGRO, but because AOA is so heavily US Equity weighted, I always have to pick up VFV to make up the difference — I’m kicking USD out of my portfolio, not the US market. ZST is my pick for the RRIF to replace ICSH. It’s a similar idea to ICSH, but since Canadian interest rates are lower, I expect I’m sacrificing a bit of return there. I hope this will work itself out in the long run.

And I’m trying to respect my asset allocations at the same time, which remain 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. Every time I get rid of some AOA or ICSH, it gives me an opportunity to make sure I respect the splits. Here’s what it looks like:

Plan for the next month

With the asset class splits under control, next month will see the last vestiges of USD gone from the portfolio. And I expect I’ll do a bit of shifting to bump up the Interational Equity portion of the portfolio, which is a little light. And I plan to celebrate a bit, because the removal of USD from my retirement portfolio should reduce complexity significantly.

Overall

Part of using VPW2 as a strategy is the need to calculate your retirement net worth on a monthly basis. Net worth clawed its way back to June’s levels, but no complaints — it’s still 20% above where it was when I started on my retirement journey 20 months ago.

My VPW-calculated salary has now increased for 8 straight months, it’s nice getting a monthly raise!

  1. The exact day is variable because of the timing of the end of the month. Payday has to fall on a trading day. ↩︎
  2. Variable Percentage Withdrawal, a structured way to decumulate your portfolio. ↩︎
variety of cookies in a box

What’s in my retirement portfolio (July 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, so that’s a good trigger to update this post. On July 301 before the markets opened, 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).

There have been pretty big changes since last month as my strategy to Kick USD out of my retirement portfolio continues in earnest. This has focused on getting rid of AOA and ICSH in my spouse’s RRIF account this month as she takes advantage of the free Norbert’s Gambit included in her trial subscription to Questrade Plus2.

AOA is largely being replaced by XGRO, but because AOA is so heavily US Equity weighted, I always have to pick up VFV to make up the difference — I’m kicking USD out of my portfolio, not the US market. ZST is my pick for the RRIF to replace ICSH. It’s a similar idea to ICSH, but since Canadian interest rates are lower, I expect I’m sacrificing a bit of return there. I hope this will work itself out in the long run.

And I’m trying to respect my asset allocations at the same time.

Plan for the next month

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

The moves I made to start reducing USD in my portfolio have quickly allowed me to get to my recently revised target allocations I have for each asset class:

  • 5% cash or cash-like holdings like ZMMK and ZST
  • 15% bonds/income (most are buried in XGRO and AOA, rest are in XCB)
  • 23% Canadian equity (mostly based on ETFs that mirror the S&P/TSX — HXT and XIC); this is up from the old 20% target
  • 37% US equity (dominated by ETFs that mirror the S&P 500); this is up 1% from the old target
  • 20% International equity (mostly, but not exclusively, developed markets); this is down 4% from the old target

With the asset class splits under control, next month will see more moves to get rid of USD in my portfolio. There’s only USD in my RRIF accounts now, all invested in AOA and ICSH. These positions will be reduced by 1/5th in August as my target is to be fully USD free by the end of the year.

My timing for conversion looks to have been pretty decent; the USD/CAD rate continues to run north of 1.40, which for me is a good thing.

Overall

Part of using VPW3 as a strategy is the need to calculate your retirement net worth on a monthly basis. My three month winning streak has come to an end as I took a slight step back month over month. However, I’m worth 19% more than when I started my retirement journey in January 2025.

Irrespective of my net worth stumble, my VPW-calculated salary continues to increase, albeit at a more modest rate, as expected. The VPW cash cushion (now 100% invested in ZMMK) acts like a shock absorber to my salary, smoothing out the more volatile month to month variations in my net worth.

  1. I did all the trading I needed to do on the 24th; it takes a few days for everything to settle and for money to get sent to the bank account. My net worth is quite a bit lower after the mini-crash on the 29th! ↩︎
  2. Questrade Plus is 11.95 monthly, but offers a 30 day free trial. I’m a cheapskate, remember? Norbert’s Gambit is otherwise 9.95 a go plus HST. ↩︎
  3. Variable Percentage Withdrawal, my chosen decumulation strategy. ↩︎