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Canada is about to experience an unprecedented transfer of wealth across generations that will transform household balance sheets, life plans, and the role of financial advisors. Experts estimate that roughly $1 trillion will transfer between generations over the next decade, and this shift is discussed weekly.
As someone who advises families across multiple generations, I see three key implications. First, the amount of capital shifting hands is significant, but equally important are the who and the how: younger recipients seek different things than their parents. Second, the timing and structure of transfers (gifts made during life versus testamentary bequests) are driven by family dynamics as much as tax considerations. Third, the industry itself must modernize to stay relevant: advice now goes beyond portfolio selection to include income architecture, behavioral coaching, private-market access, values alignment, and digital delivery. The landscape is changing more quickly than I have experienced in the past 25 years.
Understanding what each generation needs and why they want it is the foundation for giving meaningful advice.
Baby Boomers: stewardship, income, and legacy
Baby Boomers still hold a disproportionate share of wealth in Canada, and their priorities have shifted from accumulation to preservation, predictable income, and legacy planning. The questions they ask are practical and existential: Will I outlive my money? How do I leave a legacy without causing family conflicts? How do taxes and health-care risks affect my plan? In practice, this means structuring retirement income to address longevity risk, incorporating tax-efficient solutions, and creating estate plans that minimize friction at death.
At Trans Canada Wealth, an advisory group of Harbourfront Wealth’s independent platform, we integrate investment strategies with our in-house CPA tax specialist and estate planning expertise so clients can see the full chain of outcomes, cash flow, taxes, and transfer, rather than isolated portfolio returns. This comprehensive approach is what gives Boomers the peace of mind they value most. We walk clients through our “Atlas” system to ensure they have peace of mind that no stone has been left unturned and that they have a structure and plan that works for their unique situation.
Gen X: the bridge generation demanding clarity
Generation X is in the middle, often financially squeezed, supporting aging parents while raising children, yet they are likely to be the most active people in managing wealth transfers. Many Gen X clients will inherit significant wealth but usually don’t plan for it; instead, they seek control, transparency, and practical plans that address debt today, catch up on retirement savings, and fund education. Unlike parents of previous generations, they have a stronger desire to help their children buy their first home and ensure they start their financial journey on solid footing.
An important role for advisors is facilitation: helping families have clear conversations about intentions and timing. We frequently counsel Boomers on the merits of lifetime gifts versus estate transfers because earlier transfers can increase intergenerational utility and allow parents to witness the benefits. Equally, Gen X wants straightforward, independent advice that filters noise, ensuring one poor decision doesn’t derail a 20- or 30-year plan.
Millennials: aligning performance with purpose
Millennials prioritize differently when they invest. While performance remains important, purpose and fees are now key factors. Studies and industry reports reveal that younger investors are highly interested in sustainable and impact strategies; they seek access to alternative investments and ESG-informed allocations as part of a diversified portfolio.
For advisors, this means providing institutional-grade access and clear discussions about costs alongside values-based solutions. Millennials are well-informed but have limited time; they expect advisors to add value by curating investment opportunities, conducting thorough due diligence, and explaining trade-offs: such as how an ESG focus might affect risk/return, liquidity, and fees. When advisors excel at this, they not only retain inherited capital but also build lifelong relationships.
Gen Z: digital-first, early adopters and learners
Gen Z approaches wealth conversations with a different relationship to money. They are digital natives, comfortable transacting and learning online, and many start their investing journey earlier than previous generations. Research shows a significant rise in early retail investing and financial literacy among Gen Z, and their expectations for digital access, education, and transparency are high. Continue Reading…
Below we canvassed more than 20 retirement experts and financial planners in both Canada and the United States about how they and their clients can use new AI Tools to help investors pick stocks or ETFs and plan their retirement.
These experts were gathered by Featured.com, which has been supplying Findependence Hub with quality content for several years now. It has changed its procedure so that editors like myself can request input on particular topics we think will interest our readership. The sources are all on LinkedIn, as you can see by clicking on their profiles below.
Here’s what we asked:
What is your top recommendation for using AI tools like Grok or ChatGPT to enhance the investing experience or financial planning process for retirement?
Their answers are below, which have been re-ordered by me and in some instances edited down, using an ellipsis (…) to indicate cut passages.
“AI doesn’t replace financial advisors: it elevates investors to think and plan like one.”
One of the most powerful ways investors and retirees can use AI tools like Grok or ChatGPT is to transform information overload into clear, actionable insight not just faster, but smarter. These tools allow individuals to run scenario-based retirement models, stress-test investment ideas against historical data, and translate complex financial language into plain English they can actually act on. What I recommend most is using AI as an always-available financial co-pilot a tool that helps you ask better questions, explore tax and withdrawal strategies, and stay disciplined when emotions run high. Of course, AI should enhance, not replace, professional advice; but when paired with fiduciary guidance, it becomes a force multiplier for better decision-making. The future of retirement planning is not just automated: it’s augmented, where every person can access institutional-grade research and personalized planning at a fraction of the cost. — Justin Smith, CEO, Contractor+
Use AI for Grunt Work & Routine Analysis
I use AI to handle the grunt work for my finances. It’s great for automating my investment tracking and finding savings opportunities. For my SaaS business, I have ChatGPT audit expenses and run tax simulations. It catches small details I would definitely miss, but I always double-check with my accountant before making any big moves. — Cyrus Partow, CEO, ShipTheDeal
Running a fintech team, I use AI like Grok to track portfolios and summarize complex financial statements. I have it monitoring global trends that might affect Canadian retirement planning. Integrating these tools took some time, but the process is way less stressful now. My rule is to let AI handle the routine analysis while I double-check any critical decisions myself. — Sreekrishnaa Srikanthan, Head of Growth, Finofo
A good way to use AI tools like Grok or ChatGPT for investing and retirement planning is to treat them as helpful guides that explain financial topics, summarize current market information, and assist with planning choices. These tools can make complex financial ideas easier to understand, break down how different investment options work, and help create scenarios based on your retirement goals. You can ask questions to check your knowledge about topics like spreading your investments or tax rules related to retirement accounts, getting clear answers that fit your situation.
These AI tools also provide updated summaries of financial news and alert you to changes that could affect your retirement plans, like new laws or required withdrawals. While they do not replace a human financial advisor’s insight, they give you useful information that helps you talk to professionals with more confidence. Regular use helps keep you informed about your progress and reminds you of important details, making managing your retirement plan easier. — Richard Dalder, Business Development Manager, Tradervue
Use to summarize Market Trends
I work in tech marketing, so I’ve started using ChatGPT to research retirement investments. I’ll have it summarize market trends in telecom or healthcare IT, then cross-check with mainstream financial sources. This saves me hours of initial screening time. My advice is to never act on an AI’s take without fact-checking it first, but it’s a great way to get the lay of the land quickly. — Andrew Dunn, Vice President of Marketing, Zentro Internet
Use AI as a Personalized Planning Engine
My top recommendation is to use AI as a personalized planning engine. Feed it your retirement goals, income range, expected timeline, and risk comfort. Ask it to build draft scenarios, compare tax-advantaged account strategies, summarize differences between contribution options, or outline the impact of shifting a portion of your portfolio into metals, equities, or fixed income. This gives you a structured starting point before you meet with a licensed advisor.
AI also helps people evaluate items of value they already own. Many Americans keep gold or silver tucked away because they are unsure where to start or who to trust. Ask AI to walk you through how precious metal markets move, how payouts are typically calculated, and what reputable U.S. buyers offer. When people understand what their gold is actually worth, they make smarter decisions about whether to sell, hold, or incorporate it into their retirement strategy.
Using AI this way puts you in control. It speeds up research, cuts through noise, and helps you prepare with confidence before talking to a financial professional. — Brandon Aversano, CEO, The Alloy Market
I work with AI and financial data, and here’s what I’ve found: nobody reads those static retirement planning sheets. We switched to interactive simulations using tools like ChatGPT, letting people play out different investment choices and actually see the results. Engagement went way up. If you’re planning retirement in the U.S. or Canada, this gives you a much better feel for your financial future than any document. — John Cheng, CEO, PlayAbly.AI
Use to plan Retirement and support Financial Literacy
AI tools like Grok and ChatGPT shine brightest in retirement planning when used to simplify complex financial decisions. One powerful approach is creating personalized scenario models: quick projections that show how small adjustments in savings, expenses, or timelines can change long-term outcomes. This turns retirement planning from an abstract, overwhelming challenge into a set of clear, data-driven choices.
Another strong use case is ongoing financial literacy support. AI assistants can distill dense market insights, tax rules, or investment updates into plain-language summaries tailored to an individual’s stage of life. From my experience building learning systems at Edstellar, the real value comes when AI acts as a translator: cutting through jargon and helping people understand the “why” behind decisions. That level of clarity dramatically improves confidence, especially for long-horizon goals like retirement. — Arvind Rongala, CEO, Edstellar
An on-demand Analytical Partner
In my opinion, the best use of AI tools like Grok or ChatGPT when it comes to retirement planning is to enlist it as a personalized, on-demand analytical partner. When you present an AI with your financial data (savings, trajectory, risk profile, retirement age), it has the ability to remit stress testing of your assumptions at a breadth and speed most people will never do for themselves. I have even gone a step further and even asked the AI model to create a variety of long term simulations: good markets, flat markets, inflationary periods, tax shifts, and a few unexpected life surprises here and there. This is when you will feel a much better understanding of what the reality will look like on your retirement path versus static projections.
Where I do think AI can take the planning to another level is the rigor of thinking it is going to force on you. It will find blind spots you didn’t even know to look for, it will challenge your assumptions, it will allow you to show up to your advisor meeting with the potential to be prepared. In the U.S. and Canada—complex situations in retirement planning to say the least, not to mention personal—AI will present a great utility. It won’t replace your financial professional, but it might very well allow you to ask better questions and gain confidence in your decision making. — Kevin Baragona, Founder, Deep AI
AI is NOT a financial advisor
Running a finance team, I’ve found AI like ChatGPT is great for the first pass at retirement planning. It can explain jargon or summarize options way faster than reading a 20-page PDF. But here’s the thing: it’s not a financial advisor. Use it to get the lay of the land, but always talk to a licensed professional before you put any real money in. — Edward Piazza, President, Titan Funding
Treat AI tools as a Scenario Partner
One of the most useful ways I’ve leveraged AI tools like ChatGPT and Grok in the investing and retirement-planning process is by treating them as a “scenario partner.” Not a financial advisor, not a spreadsheet replacement, but a way to explore the assumptions behind long-term decisions.
When I was first building Zapiy, I didn’t have the luxury of long planning sessions with advisors. I needed quick clarity on questions like how much I should be contributing, how aggressive my allocations should be, or how different timelines would reshape my retirement targets. What I found was that AI excels at helping you pressure-test your thinking before you make any commitments.
I’d feed ChatGPT a basic profile — income, savings rate, intended retirement age, preferred account types like a Roth IRA or TFSA — and ask it to model a few “what if” versions: what if I increase contributions by five percent, what if I shift to a more conservative allocation in my forties, what if I retire earlier but maintain the same lifestyle? The answers weren’t perfect, but they gave me a clearer sense of how small behavioral changes compound over time.
The real value is that this preparation makes every conversation with a human advisor more productive. You walk in understanding your own priorities, trade-offs, and risk tolerance instead of starting from zero. For many investors in the U.S. and Canada, this hybrid approach — AI for exploration, experts for validation — seems to strike the right balance.
If I had to give one recommendation, it would be this: use AI to sharpen your financial instincts, not to substitute professional judgment. Let it help you see the landscape more clearly so you can plan with confidence and ask better questions when it’s time to make real decisions. — Max Shak, Founder/CEO, Zapiy
Large-language models aren’t crystal balls
With new AI tools, the first impulse is always to ask for a prediction. People want to find the next winning stock or time the market perfectly. I’ve seen this happen for decades with every new wave of technology.
But these large language models aren’t crystal balls. They’re incredibly good at synthesizing information and finding patterns in past data, but they also have a tendency to invent things with absolute confidence.
The hardest part of long-term investing isn’t about finding more data. It’s about managing your own psychology, your biases, and the emotional urge to react to every bit of market noise. This is where AI’s real, and more subtle, value comes in.
My top recommendation is to stop treating these tools like an analyst and start using them as a sparring partner to challenge your own thinking. Instead of asking something simple like, “What are the best Canadian dividend stocks for 2025?”, give it a much more powerful prompt.
Try something like this: “Act as a skeptical financial advisor. My plan is to invest 30% of my retirement portfolio in Canadian dividend stocks for income. Poke holes in this strategy. What are the biggest risks I’m ignoring, what behavioral biases might be at play, and what alternative approaches should I consider?”
What this does is force the AI to act as a “red team” for your own ideas. It uses its vast knowledge of economic principles and market history to find the flaws in your logic before you commit real capital.
This reminds me of a brilliant young engineer I once mentored. He had designed this complex, theoretically perfect trading algorithm and was in love with its elegance. Instead of telling him it would fail, I just spent an hour asking questions.
What happens if this data source is delayed by two seconds? How does the model behave in a flash crash? What’s the single point of failure? He came back two days later and scrapped the whole thing, starting over with a simpler, more resilient design.
The AI can be that patient questioner for you. True financial security isn’t built on finding the perfect answer, but on developing the wisdom to question your own. — Mohammad Haqqani, Founder, Seekario AI Job Search
Use for Stress Testing Assumptions
My top recommendation for using AI tools like Grok or ChatGPT to enhance retirement planning is not to use them for advice, but for stress testing assumptions. Never take financial advice from a large language model. That is a path to financial ruin. Instead, use the AI to aggressively challenge the core numbers you are already getting from a human financial advisor.
The effective use is feeding the AI a series of complex, negative scenarios based on your existing US or Canadian retirement plan. Ask the AI: “If inflation averages 5% over the next ten years, and my portfolio only returns 4%, where does the system fail?” or “If I move to a high-tax state and health care costs double, how does the plan survive?”
This approach works because it turns the AI into a powerful, objective risk auditor. It exposes the hidden vulnerabilities in your human-designed plan without the emotional filter of your advisor. This is the only high-value application: using AI to force clear, honest conversations about competence and failure points in your retirement strategy, ensuring you have the strongest system possible. — Flavia Estrada, Business Owner, Co-Wear LLC
Use to get a head-start on when to retire
Use AI tools like Grok or ChatGPT to get a head start on how to retire. These services will evaluate the state of your finances and most can administer a wide array of retirement and other accounts then recommend investments that fit your criteria. They demystify complicated financial subjects. They can help you with budgeting, monitor progress and shift plans as markets change. Ask questions in a frame where hopefully will receive clear and good advice. Bots driven by AI help save you time, reduce mistakes and change the way you think about money. It makes retirement planning much simpler and more straightforward. — Keith Sant, Founder & CEO, Kind House BuyersContinue Reading…
Learn the key differences between Canadian Depositary Receipts (CDRs) and American Depositary Receipts (ADRs), and how each structure helps Canadians access international stocks.
Image courtesy BMO/Getty Images.
By Erin Allen, CIM, BMO ETFs
(Sponsor Blog)
Investing outside of Canada sounds simple. Just buy shares of Apple, right? But if you’ve ever tried, you know it’s not that straightforward. You’ll need U.S. dollars, your brokerage will likely charge a steep currency conversion fee, and you’ll be exposed to foreign exchange (FX) risk the entire time you hold the stock.
That’s where depositary receipts come in. Canadian Depositary Receipts (CDRs) and American Depositary Receipts (ADRs) are two ways to buy foreign stocks without directly trading on an international exchange. They’re designed to make global investing easier: but they work differently.
In this article, we’ll break down the differences between CDRs and ADRs, which could help you determine which one makes more sense for your portfolio.
Canadian Depositary Receipts (CDRs)
CDRs are a homegrown solution designed to make global stocks more accessible to Canadian investors. Listed on a Canadian exchange and priced in Canadian dollars, CDRs give you exposure to foreign companies: without needing to exchange currency or worry about FX fluctuations.
What makes CDRs unique?
CDRs come with a built-in notional currency hedge. That means the value of the receipt adjusts for movements in the Canadian–U.S. dollar exchange rate (or other foreign exchange rate depending on the stock), helping reduce the impact of currency swings on your return. It’s a structural feature that’s automatically factored into the pricing of each CDR, so you don’t need to manage it yourself.
Another feature is fractional share access. Most CDRs are initially priced around CAD $10 per unit, making them more accessible than buying full shares of blue-chip companies like Tesla or Berkshire Hathaway in U.S. dollars. This structure makes it easier to build diversified portfolios: even with modest amounts of capital, which makes them particularly beginner-friendly.
Why consider CDRs?
Because CDRs trade on a Canadian exchange and in Canadian dollars, there’s no need for currency conversion, which means no currency conversion fees and the impact of currency movements is managed through a built-in notional hedge.
They also streamline global access: the current lineup includes U.S. giants, international developed-market companies.
And you can buy them at any major Canadian brokerage, just like any other Canadian-listed ETF or stock.
Notable examples in BMO’s CDR directory include ex-Canada companies like:
ASML Canadian Depositary Receipt (CAD Hedged) (Ticker: ASMH)
LVMH Canadian Depositary Receipts (CAD Hedged) (LV)
Nintendo Canadian Depositary Receipts (CAD Hedged) (NTDO)
Honda Canadian Depositary Receipts (CAD Hedged) (HNDA)
Tesla (TSLA) BMO Canadian Depositary Receipts (CAD Hedged) (ZTSL)
Berkshire Hathaway (BRK/B) BMO Canadian Depositary Receipt (CAD Hedged) (ZBRK)
With lower dollar-per-share amounts and built-in currency hedging, CDRs are designed to simplify international single-stock investing for Canadian portfolios.
American Depositary Receipts (ADRs)
ADRs are the original gateway to international investing for North American investors. Introduced nearly a century ago, ADRs were designed to make it easier for U.S. investors to buy foreign stocks: without dealing with foreign exchanges, unfamiliar regulations, or foreign currencies.
How ADRs work
ADRs trade in U.S. dollars on major U.S. exchanges like the NYSE and Nasdaq. Each ADR represents shares of a non-U.S. company, held by a U.S. depositary bank. These banks issue the ADRs and handle the underlying foreign shares.
There are two types of ADRs:
Sponsored ADRs are backed by the foreign company itself and often come with better disclosure, liquidity, and alignment with investor interests.
Unsponsored ADRs are issued by banks without the direct involvement of the company. These tend to be less liquid and may not offer the same level of investor information. They trade exclusively on Over-The-Counter (OTC) markets making them very hard to retail investors to access.
Unlike CDRs, most ADRs do not include currency hedging. Your returns will reflect not just the performance of the stock, but also any gains or losses from exchange rate movements between the foreign currency and the U.S. dollar.
Why investors use ADRs
ADRs are widely accepted and highly liquid, with a long track record. They provide convenient access to hundreds of international companies, particularly from developed and emerging markets in Europe, Asia, and Latin America.
But for Canadian investors, there are some added frictions. Because ADRs are priced in U.S. dollars, you’ll need to convert Canadian dollars to buy and sell them. That introduces currency conversion costs and FX risk, which can eat into returns.
For Canadian investors, ADRs still remain a viable route to global diversification. But they come with a few more moving parts compared to Canadian-listed alternatives that need to be accounted for.
CDR vs. ADR: Side-by-side comparison
Feature
CDR
ADR
Currency
CAD
USD
Exchange
Cboe Canada / TSX
NYSE / NASDAQ
Currency Hedge
Yes (notional hedge)
Typically, no
Fractional Access
Yes
Varies
Accessibility for Canadians
High
Limited
Investor considerations: a checklist
When deciding between a CDR and an ADR, the best choice often depends on your specific needs as a Canadian investor. Here’s a checklist of key factors to think about:
✓ Portfolio diversification with local convenience
Both CDRs and ADRs give you access to global stocks, but only CDRs let you do it without leaving the Canadian market. You can trade them in Canadian dollars, through your regular Canadian brokerage account, during local market hours.
✓ Currency risk management
CDRs include a built-in notional hedge that helps offset the effects of exchange rate fluctuations. ADRs, on the other hand, generally leave you fully exposed to currency movements. If FX risk is something you’d rather not manage, CDRs offer a more hands-off approach. Continue Reading…
Franklin Templeton’s Investment Outlook for 2026 and beyond was largely positive, judging by the three speakers who presented to advisors and the media at Toronto’s Ritz Carleton Hotel on Tuesday (Nov. 25). In fact, UK-based Global Investment Strategist Michael Browne declared the year now closing, 2025, to be “the Year that the Bear cried Wolf.”
Browne, who is with the Franklin Templeton Institute, released the following preliminary results of Franklin Templeton’s Global Investment Management Survey 2026, shown below:
Browne expects three Fed rate cuts next year and foresees U.S. equities as measured by the S&P500 to end as high as 7400 by the end of 2026.
Like other Templeton executives, Browne expects to see rises in stocks outside the United States. This year, the story has been about growth in the U.S. market and Value in the rest of the world, he said. But even though there are no “Magnificent 7” stocks in Europe or the Emerging Markets — the Mag 7 and their innovation mindset seem unique to the U.S. — he expects a widening and broadening of global markets, with “opportunities in all asset classes.” He expects earnings growth of 5 to 10%, somewhat below the 13.5% Factset consensus.
Corporate margins keep rising, housing markets are weak, and the High-Yield Default Rate is near historically low levels, Browne said, with slides illustrating each point: “Stress indicators do not
point to a severe default cycle in the near term.”
However, Tariff revenue for the U.S. is “unfortunately” high, he said.
Even so, as the chart below demonstrates, real GDP (Gross Domestic Product) is forecast to rise over 2026 and inflation is expected to be flat to down next year.
Meanwhile, there is more than US$7 trillion in cash still sitting on the sidelines and capex growth for the big hyperscalers is expected to remain strong, Browne said. They will spend US$3 trillion by the end of the decade and may generate significant returns for the four hyperscalers investing from Cash: Meta, Microsoft, Amazon and Google.
How to spot a Bubble … and a Crash
Browne provided past examples of historic bubbles, ranging from Dutch Tulipmania of 1637 to the American railway mania of the early 1850s, which crashed in 1873, and severe stock market declines in 1907, 1929, 1987, 2001 and 2008.
Bubbles usually end after 7 developments: Debt, Rate rises, a “First Failure,” Confidence fails Reverse Velocity, Margin Calls, Forced or Panic Selling and finally Fraud.
Comparing the 2020s to the 1990s, one of Browne’s slides said “The dot-com bubble burst in 2000: more than five years after the release of Netscape.”
Historically, Global Equities have delivered double-digit gains following Rate cuts and have supported P/E expansions, Browne said. All markets except China are more correlated to the U.S. than in the past. In Emerging Markets, Browne likes India and China: “When the Fed cuts, Emerging Markets fly.”
The last scheduled speaker was Jeff Schulze, CFA, Managing Director and Head of Economic and Market Strategy for ClearBridge Investments, who reassured attendees they don’t need to fear the All-Time Highs the U.S. has been experiencing throughout much of 2025:
Schulze says that with possible Tariff Refunds, “we think the economy next year will outperform consensus expectations … We’re buyers of Dips.” While valuations are “full” right now, with the Fed cutting we don’t see multiples going down … for the first time in a long time, diversification will be more additive as we see a broadening out.” The previous laggards will become leaders, including small- and mid- caps and the S&P493 (all but the Mag 7).
One slide on the Tariffs said this: “The Supreme Court may decide that the administration’s IEEPA tariffs need to be refunded, which would be a windfall to corporate America next year. Secretary of the Treasury Scott Bessent has noted that approximately half of the incremental tariff revenue, which is on pace to near $200 billion by year-end, has come from IEEPA tariffs.”
It goes into more detail on William Bengen’s updated book about the 4% Rule, which was one of three recently published financial books we reviewed in the last Retired Money column.
For that column I had originally planned to focus exclusively on that book, A Richer Retirement, Supercharging the 4% Rule to Spend More and Enjoy More. However, I decided to review two other books at the same time; meanwhile I ended up on a related project on my own site, which involved asking more than a dozen financial advisors on both sides of the border what they think of the 4% Rule and the tweaks Bengen covers in his follow-up book. You can see all responses in this blog that appeared earlier this month on Findependence Hub, but at over 5,000 words it was a tad long for the space normally assigned to the Retired Money column.
For the MoneySense version, I focused on the most insightful comments and added a few thoughts of my own. The survey was conducted via Linked In and Featured.com, which has long supplied good content for my site.
Broader diversification spawns a 4.7% Rule
Trusts and estates expert Andrew Izrailo, Senior Corporate and Fiduciary Manager for Astra Trust, says Bengen’s original idea was to provide a sustainable income stream for at least 30 years without depleting your savings. In his new book, Bengen “revisits this concept using updated data and broader asset allocations,” summarizes Izrailo, “He now argues the safe withdrawal rate could rise to around 4.7%, supported by stronger market performance and portfolio diversification beyond the original stock-bond mix.”
For American investors, Izrailo still begins with 4% as a baseline because “it remains simple and conservative. Then I evaluate three major factors before adjusting: market volatility, portfolio performance, and expected longevity.” For Canadian retirees, “I tend to start lower, around 3.5%, due to differences in taxation, mandatory RRIF withdrawal rules, and the impact of currency and inflation differences compared to U.S. portfolios.”
Toronto-based wealth advisor Matthew Ardrey, of TriDelta Financial was not part of the original Featured roundup but agreed with the general view that while a helpful starting point, the 4 Rule is only a guideline. “When I meet with a client, I don’t rely on the 4% rule at all,” said Ardrey, who has worked with clients for more than 25 years “I’ve learned that rules of thumb — like the 4% rule — pale in comparison to the clarity and confidence that come from a well-crafted” and personalized financial plan. Such a plan should reflect each person’s unique circumstances, priorities, and goals, allowing them to build the right decumulation strategy for their situation.
No one size fits all
Almost all the experts caution against taking a one-size-fits-all approach to the 4% Rule or its variants. Over 20 years with her own clients financial advisor and educator Winnie Sun, Executive Producer ofModernMom, starts with 4% as the baseline, then adjusts it based on actual client spending patterns and market conditions … The biggest mistake I see isn’t about the percentage itself: it’s that people forget about tax efficiency in withdrawal sequencing.”
Oakville, Ont.-based insurance broker James Inwood says the 4% rule is “a decent guideline, but it’s not some magic number you can set and forget. I’ve watched people get into trouble because they didn’t account for medical bills, which are a real wild card here in Canada. I always tell people to build in a cash buffer and check in on that withdrawal rate every couple of years instead of just locking it in permanently.” Continue Reading…
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