How to cope with the RRSP-to-RRIF deadline in your early 70s
MoneySense » Retired Money
by Jonathan Chevreau
1w ago
As I wrote in my previous column on Fred Vettese’s PERC, I’ve reached the age when my registered retirement savings plan (RRSP) will soon have to be converted to a registered retirement income fund (RRIF) and/or annuitized. I turn 71 in early April, which means I have until the end of December 2024 to wind up my RRSP. Thousands of baby boomers will be in the same boat as me this year, so this column shares what I’m learning about this process.  It pays to know! Get FREE MoneySense financial tips, news & advice in your inbox. Subscribe now The latest you can receive your first RRIF pay ..read more
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Retirement Income for Life: Why Canadian retirees love Frederick Vettese’s books and his PERC
MoneySense » Retired Money
by Jonathan Chevreau
1M ago
Since I turn 71 soon, my attention is naturally becoming focussed on the inevitable question of what to do when my registered retirement savings plan (RRSP) must be collapsed. Do I keep it as a registered retirement income fund (RRIF)? Or should I convert it into an annuity? Maybe I do a combination of both. I will focus on the mechanics of the RRIF conversion in an upcoming Retired Money column, as that will likely be my choice for most of my retirement savings. And, a year down the line, that will likely be the choice of my spouse. In the meantime, I have been reading the new third edition o ..read more
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Are GICs a no-brainer for retirees?
MoneySense » Retired Money
by Jonathan Chevreau
2M ago
For years, the humble GIC—guaranteed investment certificate—was disparaged by the fixed-Income cognoscenti and more often than not financial advisors. But, things started to change when interest rates started rising a few years ago in Canada and the U.S. As of January, DIY investors in Canada should be able to find 1-year GICs paying about 5%, falling to a tad over 4%, if you go out four or five years.   While fixed-income investors were brutalized in 2022 with unexpected losses even in supposedly safe bond funds, Canadian investors who put some of their fixed-income into GICs were l ..read more
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Inflation a scourge for retirees? Ottawa’s silver lining(s)
MoneySense » Retired Money
by Jonathan Chevreau
3M ago
While inflation and taxes are both major scourges for retirees, there’s a silver lining in how the two interact. That’s because the federal government builds in a degree of inflation-indexing to tax brackets, retirement vehicle contribution room and major retirement programs like the Canada Pension Plan (CPP), Old Age Security (OAS) and the Guaranteed Income Supplement (GIS). As CIBC Private Wealth’s Jamie Golombek recently wrote for the Financial Post, come 2024, all five federal income tax brackets are indexed to inflation using the rate of 4.7%. The new brackets are 15% for income between ..read more
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Infinite banking in Canada: Should you borrow from your life insurance policy?
MoneySense » Retired Money
by Jonathan Chevreau
4M ago
I must admit that until my editor drew it to my attention, I had never heard of infinite banking. Apparently, this topic is drawing a lot of interest from retirees, but I’m guessing many younger readers will draw a blank on the term. But at least for those in the know, I’m told “it’s growing exponentially.” Now, after a fair bit of research and a few interviews with experts on infinite banking, I feel I know enough to pass on the basics—plus what you should think about before signing up.  What is infinite banking? According to a useful primer from independent insurance firm PolicyAdvisor ..read more
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Check your inbox: Investing newsletters can cost you more than a sub fee
MoneySense » Retired Money
by Jonathan Chevreau
6M ago
Like most retired or semi-retired investors—even those with traditional 60/40 balanced portfolios—I found 2022 a challenging year. While our family’s investment portfolio is super diversified by asset class and geography, we had our share of losers, most of them SPACs (special purpose acquisition companies) or recent electric vehicle IPOs (initial public offerings)—like Lordstown Motors, Lucid and Rivian—plus crypto play Coinbase. I blush even to admit this. Get FREE MoneySense tips and more in your inbox! #itpaystoknow SUBSCRIBE NOW Be careful what you read and what investing newsletters you ..read more
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The best ETFs for retirement income
MoneySense » Retired Money
by Jonathan Chevreau
7M ago
While exchange-traded funds (ETFs) are appropriate for investors of all ages and life stages, they make particular sense for retirees and those close to retiring. Things like quick and easy broad diversification of asset classes and geographic exposure at a reasonable price are especially relevant when you no longer wish to be exposed to single-stock risks. Mind you, concentration risk still exists even with ETFs because sector or regional ETFs continue to be released, typically with higher fees. Just look at the current furor over AI ETFs (those specifically for artificial intelligence tech c ..read more
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Is semi-retirement stressful? You bet—here’s what to do about it
MoneySense » Retired Money
by Jonathan Chevreau
8M ago
One of my semi-retirement philosophies is that reducing stress can sometimes be more important than maximizing revenue. Assuming you’re self-employed in semi-retirement, as I am, you may find yourself juggling multiple clients and conflicting demands on your limited time and energy. The topic of stress has come up a few times with my clients lately, as summer starts to give way to fall. Given the sporadic nature of freelancing, most freelance writers and suppliers know how hard it is to turn down paying work. I was like that in my first stint as a freelancer back in the 1980s, long before I ac ..read more
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Should retirees in their early 70s partly annuitize?
MoneySense » Retired Money
by Jonathan Chevreau
10M ago
If you’re nearing the age when you have to wind up your registered retirement savings plan (RRSP), it’s a natural time to consider annuitizing, at least partly, if you haven’t yet done so. Canadians are required to close their RRSPs at the end of the year they turn 71. Since cashing out and paying tax on the entire lot is not practical, closing the RRSP amounts to either annuitizing or converting to a registered retirement income fund (RRIF), or probably some combination of these two.  Historically, Canadians have tended to avoid annuities, especially all those years when interest rates w ..read more
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The five factors of retirement for Canadians
MoneySense » Retired Money
by Jonathan Chevreau
11M ago
This month’s Retired Money column reprises a couple of interesting takes on the key factors in deciding one’s timing of embarking on retirement. One is from the Plutus-award winning American author and blogger Fritz Gilbert, and the second is a Canadian take from MyOwnAdvisor’s Mark Seed. A Canadian perspective on the five factors of retirement Gilbert started the ball rolling back in April 2022, with a post on his The Retirement Manifesto blog, entitled “The 5 most important factors in your decision to retire.” His Plutus award was for Best Retirement Blog. After more than 30 years working in ..read more
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