Inflation

How do you intend to retire?

Posted By Financial Independence Hub | January 9, 2026

By Mark Seed, myownadvisor

Special to Financial Independence Hub

Unless you go back in time, retirement no longer means stopping all forms of work from the factory job: Retirement means different things to different people.

While there remains a formal definition of retirement (in that there is the action of leaving one’s job or ceasing to work) retirement has many flavours these days. The traditional definition has evolved and no longer fits what people are doing and seeking.

As I approach retirement from my own career at the end of March 2026, I wondered how you intend to retire.

How do you intend to retire?

The rise of standardized work during the 20th century coupled with an abundance of industrialized or corporate jobs gave rise to pension plans as a key employee attraction and retention benefit. So, you worked hard for 30-35 years and then you retired with your pension as part of the long-term total compensation model: a model that remains in place to today.

Defined benefit (DB) pensions give retirees fixed lifelong monthly payments based on salary and a years of service formula. Some DB plans even offer a degree of indexing to fight inflation. But all DB plans represent a premium form of dependable retirement income that is not subject to financial market drama: since the financial risk is on the employer and not on the employee or retiree.

But times are a changing …

The long retreat of DB employee benefits has been well documented, shifts have occurred in the employer-employee dynamic involving unions along with shifts in the job market to industries where a DB pension is simply just not offered.

Canada’s retirement income system is often described as having three pillars, although variations exist.

The first pillar provides benefits based on age and years of residence in Canada: so it includes the Old Age Security (OAS) pension, the Guaranteed Income Supplement ((GIS), if that applies to you for lower-income folks), the Allowance and the Age Credit. This first pillar is funded largely through general tax revenues.

The second pillar consists of mandatory earnings‑related programs so you can put the Canada Pension Plan (CPP) and, in Quebec, the Quebec Pension Plan (QPP) in that bucket. These are public pensions, funded by mandatory contributions from workers and employers, as well as income from investments made with these contributions.

And finally the third pillar is composed of the aforementioned workplace pension or as the workplace employee compensation model continues to shift, it could be a Group RRSP or another form of employee compensation as well. “Private” retirement income planning may also include your own assets: RRSPs, TFSAs, LIRAs and any non-registered investments.

Weekend Reading - Your retirement income sources

Source: Government of Canada.

I share this information for context when it comes to the following types of retirement you might pursue: how you intend to retire. Your path to retirement could be one or more of these types below.

1. Traditional Retirement

I define this as follows: you work for decades on end uninterrupted and you stop working for good. During this period of time, you might have contributed to a DB or Defined Contribution (DC) pension plan or not at all.

If you had a pension, the automatic savings nature of any workplace pension would be very good for most people — this “forced savings approach” is a huge benefit unto itself – pay yourself first as per The Wealthy Barber.

If you had a pension (the golden handcuffs idea) and depending on the type of pension you have, pension income gets paid out in different ways at retirement. Some plans cannot start before a certain age while others can be accessed earlier. Depending on your retirement-income goals this flexibility (or lack of flexibility) is an important consideration in your financial plan: one I’ve struggled with myself.

There are many benefits to traditional retirement by remaining with one key employer for decades on end (i.e., work stability; the guaranteed pension income for life; don’t have to take too much personal investment risk; could be other workplace retirement benefits like health benefits, travel benefits or life insurance benefits) but traditional retirement also seems to come at a personal cost of trading your life energy for employer time for many decades.

The traditional path to retirement may not work for many people these days. It did not work for me.

2. Semi-Retirement

I define this as follows: you want to pursue some form of life-work balance.

My wife toggled back and forth between full-time and part-time work up until her retirement in October 2025.

I continue to enjoy my part-time role at work (until the end of March 2026): I wanted to remain with my employer for a bit, still contribute, just in a reduced capacity.

After I retire from my current career, I might still work (gasp!) but only a few days per week or a few days per month. We shall see.

I will continue to blog here for another year or so too and this site doesn’t make minimum wage: I enjoy running it.

Semi-retirement is not about income but it may include some small financial compensation for doing something you really enjoy/want to pursue: trading your time or energy for some income.

This path and related definition of retirement has always appealed to me and much more so than just early retirement and not working again.

3. Early Retirement

Some bloggers or FinFluencers might express this is a “better way” to retire but when you really think about it: nobody in their 30s or 40s really retires early and never works again. I haven’t met one of them yet.

They continue to work for some income and many do so on their passion projects. Nothing wrong with that of course, being an entrepreneur, you just need to be honest with folks vs. selling some dream as you hustle a book or a podcast or something else to support your lifestyle.

In Your Money or Your Life, author Vicki Robin equates ample savings (and investments) with freedom. This means you have the freedom “to leave your job if the boss is intolerable or the benefits have just been yanked.” With sufficient savings (and investments) you have the opportunity to transform your life, including achieving Financial Independence if you want to.

Robin likens financially independent thinking to cartography: you need to create your own map. Your map will depict the delta between your life today and the one you want to lead. The results of financially independent thinking will allow you to step back from your assumptions and emotions about money and observe them objectively.

The concepts related to early retirement are not new but certainly lots of modern social media marketing have propelled this thinking into a new discussions and forums.

I’m a big fan of financial independence, just not any Retire-early part of FIRE marketing.

4. Mini-Retirements

Popularized by Tim Ferriss’ 2007 bestseller, The 4-Hour Workweek, Ferriss proposes you redistribute your retirement over many decades. Other books and articles have suggested the same over the years.

In this form of retirement you work in bursts or stints. For example, you might work for a few years and then take a few years off work only to work yet again.

When it comes to mini-retirements, I’ve considered this approach but quickly dismissed it since I was always more focused on my crossover point and becoming financially independent vs. needing to work to fund periodic time off only to work again …

Crossover Point

In doing so, that allowed us to start shifting both of our workplace schedules to part-time as part of a transition to retirement sooner than most.

How do you intend to retire?

The answer to this question is very personal and quite subjective.

Which type of retirement is right for you?

“It depends” is the common personal finance answer to pretty much everything but it’s so true.

Traditional retirement never appealed to me nor did any sort of mini-retirement either. So, I guess I’ve opted for the semi-retirement path and if you want to suggest that I’m an early retiree well that’s probably somewhat correct too.

Your financial planning and retirement income planning will depend on many personal factors but the ingredients to any retirement or some form of financial independence are pretty generic:

Spend less than you make and invest the difference: This obvious expert advice really never goes out of style. A high, consistent savings rate is a get wealthy eventually path to retirement.
Kill all high-interest debt and remove all debt from you life when you can: Debt management comes in the form of removing ongoing credit card debt, killing off high interest loans, and managing any other consumer debt well. If you are always paying other people first it will be hard to get ahead in life.
Educate yourself / gain financial literacy over time: Another obvious truth but it’s critical to educate yourself so you develop a better understanding of not only how to manage your finances but also the motivations of others around you. Otherwise, you will pay other people lots of money to do your financial thinking for you.

Leave a comment below. I look forward to your engagement.

Yours in happy planning and celebrations for what lies ahead in 2026.

Happy New Year!

Mark

Weekend Reading - Expenses that may disappear edition

Source: Carl Richards, Behavior Gap.

Mark Seed is a passionate DIY investor who lives in Ottawa. He invests in Canadian and U.S. dividend paying stocks and low-cost Exchange Traded Funds on his quest to own a $1 million portfolio for an early retirement. You can follow Mark’s insights and perspectives on investing, and much more, by visiting My Own Advisor. This blog originally appeared on his site on Dec. 31, 2025 and is republished on Findependence Hub with his permission.

6 Financial New Year’s Resolutions for 2026

Posted By Financial Independence Hub | January 7, 2026

By Matthew J. Ardrey, CFP, R.F.P. FMA, CIM®

Special to Financial Independence Hub

As I sit here at the beginning of 2026, I would like to take a moment to reflect on 2025. We had increased U.S. protectionism through tariffs, labour market concerns with the advancement of AI, changing interest rates and another strong year of stock market returns.

With all of these macro themes out of our control, I thought of some of the personal conversations I had with clients during the year about things in their control.

1.) Keep a Positive Cashflow

One of the simplest rules in personal finance is to spend less than you earn. One of the most consistent matters I see when drafting financial plans is people know what they earn and know what they save, but do not have a complete grasp on what they are spending.

A simple way to know what you are spending is to subtract savings from after-tax earnings. Whatever remains you are spending. To take control of that spending though, you need to know where the funds are being spent. Armed with that knowledge, you can decide to continue spending on something, reduce it or cut it out altogether.

Once you are in control of your budget, use it to your advantage to save. Savings are key to wealth creation.

2.) Stay Invested

We have now had several strong years of market performance since COVID in 2020. There is no way we can predict what will happen in 2026. We may have another great year or maybe we won’t. Either way, studies show over and over again that staying invested is one of the most important factors in financial success.

There is a famous phrase in investing, “time in the market beats trying to time the market.“ Aside from how impossibly difficult it is to time them market, this also shows the power of compounding returns over time.

3.) Getting Wealthy vs. Staying Wealthy

Many financial plans I did for new clients this year were for people planning to retire in the next five years and almost every one of them had a portfolio that was at least 80-90% in stocks.

A large allocation to stocks is a great way to get wealthy but may not be the best way to preserve your wealth, especially when decumulating that wealth as part of your retirement plan.

Though we have not seen much of it in recent years, stocks can be a very volatile asset class. In the 2008 Global Financial Crisis, the S&P500 fell more than 50% and took close to six years to fully recover. A similar situation would be devastating to a retirement plan, as not only would the portfolio value fall, but there would also be crystallization of losses, as stocks are sold at losses to fund the retirement.

A well diversified portfolio among asset classes and geographic regions can help mitigate the impact of market declines. Once you have made your wealth, you don’t need homeruns to win the game. You can get around the bases on singles and doubles.

4.) Risk Mitigation: Part 1

In every plan I prepare, I want to create safety margin for my client. It could be using a Monte Carlo volatility analysis in retirement projections or an emergency fund against loss of income or large, unexpected expenses.

The benefits of these safety margins include the ability to survive a negative event, stress reduction and with that the ability to think more clearly to make better decisions. Stress clouds decision making and in a time of crisis, it is clear thinking that is most needed.

Life is never a straight line from A to B. Preparing for inevitable risks that life will bring you is sound financial planning.

5.) Keeping up with the Joneses

There is an immense amount of social pressure to fit in. To make sure you are of a similar status of those around you. But have you ever thought, how do others achieve or maintain that status? Your neighbour with the fancy house, pool and great car make look wonderful on the outside but may be swimming in debt up to their neck to “afford” all of their luxuries.

This is where the real value of a comprehensive, personal financial plan is visible. It will quantify if you can afford the reality you want. It also removes all of the rules of thumb and what works for the average person and focuses on what you need to do to achieve your personal financial goals.

6.) Risk Mitigation: Part 2

Much of financial planning is focused on the happy ending. Sailing off into the retirement sunset and enjoying the life you have worked so hard to earn. Unfortunately, life throws us curveballs and ensuring the risk management side of financial planning is covered is just as important. Continue Reading…

Opinion: Bitcoin will continue dropping in 2026. The thrill is gone

Posted By Financial Independence Hub | January 6, 2026

By Alain Guillot

Special to Financial Independence Hub

Bitcoin was supposed to be many things: digital gold, a hedge against inflation, a revolutionary alternative to money itself. In 2025, it turned out to be something far more mundane: a disappointing asset with no intrinsic value and shrinking excuses.

Let’s start with first principles. Bitcoin has no intrinsic value. It does not produce cash flow. It does not generate earnings. It does not represent ownership in anything productive. Its value comes from exactly one source: the hope that someone else — ideally a greater fool — will buy it from you at a higher price later.

This is not a controversial statement. It is textbook Greater Fool Theory. Bitcoin holders are not investors; they are speculators betting that demand from new buyers will continue indefinitely. But here’s the problem: by now, every fool on Earth has already heard of Bitcoin.

The Tulip Mania Parallel isn’t an Insult: It’s Accurate

Bitcoin enthusiasts hate comparisons to the Dutch Tulip Mania of the 1600s, but the similarities are undeniable. Tulips weren’t valuable because of what they produced; they were valuable because people believed they could resell them at higher prices. Sound familiar?

Tulips collapsed when the pool of new buyers dried up. Bitcoin faces the same mathematical reality. Adoption is no longer early. There is no untapped population waiting to “discover” Bitcoin. Those who wanted exposure already bought in years ago.

What happens next in any speculative bubble is predictable:

Some holders need real-world money for real-world needs: food, rent, taxes.
Others look at stagnant prices and lose interest.
Boredom replaces euphoria.
Selling begins.

Bitcoin does not fail dramatically all at once. It fails slowly, then suddenly.

2025: An Embarrassing year by any standard

Supporters will try to spin the numbers, but facts are stubborn.
In 2025, Bitcoin declined by roughly 4%.

That alone would be bad enough. But investing is always about opportunity cost.

During the same period:

The S&P 500 rose about 18%.
Productive businesses generated profits.
Shareholders were paid dividends.
Capital was allocated to companies that actually do something.

Bitcoin did none of that.

A supposedly revolutionary asset losing money in a strong market is not “volatile”: it’s underperforming. A 4% decline isn’t a badge of honor. It’s an embarrassment.

The Myth of Digital Gold is dead

Bitcoin was marketed as “digital gold,” yet gold has thousands of years of history as a store of value. Bitcoin has barely survived a few market cycles, all fueled by cheap money and hype.

To make things even more embarrassing for Bitcoin holders, real gold prices went up 67%, breaking the relationship between real gold and digital gold. Real gold is still tangable and pretty to see; Bitcoin is none of those.

Gold is used in jewelry, electronics, and industry.

The real intrinsic value is that it’s a great tool for criminal activity. When regular citizens hold Bitcoin, they are adding and abetting the criminals. Bitcoin’s real usefulness is:

Money Laundering (Digital Washing Machine)
Ransomware and Extortion
Online Black Markets
Tax Evasion and Income Concealment
Sanctions Evasion
Scams and Fraud

Remove hype and liquidity, and Bitcoin has nothing left to stand on.

Prediction for 2026: No new Highs, Likely new Lows

I’ll make a clear prediction:
Bitcoin will never again reach $100,000. Continue Reading…

The Blazingly Simple Portfolio shines in TFSAs

Posted By Financial Independence Hub | January 2, 2026

By Dale Roberts, cutthecrapinvesting

Special to Financial Independence Hub

In 2010 the Globe & Mail offered a simple Canadian stock portfolio idea. It was also called the Canadian Essentials Portfolio. The portfolio concept was courtesy of political science professor Mike Henderson who singled out the companies for the essential roles they play in the Canadian economy. He identifed the companies in the year 2000 and it formed the core of the retirement investments for he and his wife. The cumulative 10-year total return on these stocks to 2010 was 305%, greatly outpacing the 72% for the S&P/TSX composite index. In a recent article, the Globe detailed how Kate, a 71 year old retiree in Guelph used the Essentials Portfolio to take her TFSA to over $250,000.

For those who have a Globe subscription here’s the Essentials article from 2010, and the Essentials update in 2018.

The 2018 update reported that the annualized return since the beginning of 2000 for the Canadian Essentials Portfolio was 13.1%, including dividends, while the S&P/TSX Composite Index made 7.6%.

The blazingly simple portfolio

Once again, the idea was to hold companies that are essential to the Canadian economy. These companies are not going away and they are in everyday use. In fact, it’s the same concept as the Canadian Wide Moat portfolio that I’ve offered on this blog .

The Essentials Portfolio is concentrated in 3 sectors, while the Canadian Wide Moat approach offers 4 sectors by including the very important grocers. The returns would have been helped greatly in the last two decades by adding grocers.

Here’s the ‘Essential’ holdings from 2000 …

Canadian National Railway (CN-T), Canadian Pacific Railway (CNR-T), Enbridge (ENB-T), TransCanada Pipelines, now TC Energy, (TRP-T), Royal Bank of Canada (RBC-T), TD Bank (TD-T), Bank of Nova Scotia (BNS-T), Canadian Utilities (CU-T), Fortis (FTS-T) and Emera (EMA-T).

It’s railways, financials and utilities. It’s a case of boring and staple blue chips beating the crap out of the broader market. That should be of no surprise.

Check out Canada’s top Robo Advisor

In Canadian stock portfolios on Cut The Crap Investing I offered this chart from Norm Rothery.

We see that the low volatility approach is a bit better. And there is a lot of boring essentials blue chip in the Canadian low volatility index.

And there is a lot of boring essentials blue chip in the Canadian low volatility index. The essentials, wide moats, low volatility and high dividend styles are all mostly concentrated in the same sectors.

In the high-dividend space check out the Beat The TSX Portfolio. It too has a long history of incredible performance, but with much greater volatility at times.

Back to Kate and her TFSA

Kate has maxed out her TFSA space and made the life-changing move of dumping her high fee mutual funds in favour of the Essentials stock portfolio approach.

Canadians should dump their high-fee mutual funds.

From the Globe & Mail post …

By early 2020, Kate had a substantial CEP in place. Her TFSA is now worth $247,000 as of mid-June, with most of the growth coming after January, 2020. Kate’s TFSA is not one of the million-dollar-plus TFSAs that the Trouncers series has often profiled, but after adjusting for the constraints of maintaining a relatively smooth ride and an undemanding workload, she sees her TFSA hitting a home run in terms of her own needs.

In the post, how to use your TFSA I noted that a maxed-out growth-oriented global ETF portfolio strategy would have delivered about $225,000 to the end of 2024. Given the gains in 2025 and the additional $7,000 contribution space, we can call it a draw. The ETF global ETF model would also be in the $245,000 range.

More risk for the same returns

For Kate’s experience, she took on much more risk for the same returns as a global ETF portfolio. She’s concentrated in a few stocks (concentration risk). All of her TFSA rests largely on the success of Canada (geographic and political risk). She’s mostly concentrated in one currency – the Loonie.

As we’ve seen recently, President Trump has suggested he might ruin Canada economically if we don’t cooperate on trade terms. He could ruin Canada in the near term. He might. That demonstrates that the risk is present. Risk to Canada could show up in other ways, it’s doesn’t have to be a Donald Trump.

Net, net, just because Kate’s strategy worked very well, doesn’t mean that it’s a good idea. It’s not. 100% concentration in Canadian equities in any account carries incredible risks.

Just because something worked doesn’t mean it’s a good idea. If a driver claims that he drove without car insurance for 30 years, it’s a good idea because he never had an accident? He saved a lof of money; it was a good strategy? Of course not. It’s the same false argument for extreme portfolio concentration risk.

If Kate had invested in the Canadian Essentials and a sensible U.S. stock portfolio, her returns would be much greater.

What is the cost of your Canadian home bias?

Our best performers over the last 15 years are U.S. stocks and ETFs.

Canadian stock portfolio weights

Of course, it’s a personal decision. Do you want a 20% , 30%, 40%, 50% Canadian weight? Many experts will suggest that 30% Canadian is optimal within a global portfolio. And again, I like the idea of the Essentials, Wide Moat, or Low Volatility approach. The long term outperformance is meaningful and likely to repeat IMHO. But we need to pay attention to geographic allocation.

But of course – past performance doesn’t guarantee future returns.

Norm Rothery tracks the Canadian low volatilty stock model for the Globe and at Stingy Investor. The current holdings are …

Algoma Central, Alta Gas, Atco Ltd, Scotiabank, CIBC, Canadian Utilities, Emera, Enbridge, Fortis, Hydro One, Intact Financial, MCAN Mortgage, Metro, National Bank, Royal Bank of Canada, Waste Connections, PowerCorp, Quebecor, Rogers Sugar, Sienna Senior Living.

Other recent holdings are George Weston, Great West Life, Keyera Corp, Loblaw, Pembina, Sun Life and TMX Group. Personally, I would continue to hold stocks that come and go within the low volatility portfolio; I would simply consider and new holdings that are added to the list.

As you can see the low volatility portfolio is dominated by financials, utilities (including pipelines and telco) and grocers.

Inflation protection

Contrary to how the Essentials portfolio was billed, it is not inflation friendly. That was demonstrated in 2021 and 2022 when we had the COVID-inspired inflation spike that led to a rising rate environment.

The Essentials was down 1.9% in 2021 and up only 2.5% in 2022 as inflation surged, delivering a negative real return.

Cut The Crap Investing readers were prepared (at least armed with the knowledge), holding gold in a balanced portfolio. I also put Canadian oil and gas stocks on the table in late 2020. Fantastic returns were on the way in 2021 and 2022. Oil and gas is the most reliable inflation-fighting sector. Here’s XEG-T.

I have long put the Purpose PRA-T ETF on the table as a one-stop, well-diversifed inflation fighting asset. Here’s PRA over the last 5 years, averaging 15% annual.

The inflation paradox

Inflation fighters would have greatly helped portfolios over the last 5 years of course. But certainly unexpected and high inflation is rare.

And ironically, it is the avoidance of these cyclical sectors such as oil and gas and materials that has led to the success of the Essentials and Wide Moat Portfolios since the 1980’s, as we have mostly been in a low inflation, disinflationary environment. It’s possible the inflation fighters will be a drag on performance if we return to low inflation / disinflationary times.

An accumulator might stick to the Essentials / Wide Moat ‘stuff’. I think it’s a good idea for retirees and those in the retirement risk zone to hold some dedicated inflation protection.

As always the above is not advice. Think of it as information for consideration as you build your portfolio. 🙂

Dale Roberts is a former advertising writer and creative director and long time index investor. In 2013, he followed his passion to become an investment advisor, and then trainer at Tangerine Investments. He won Advisor of the Year in his first year. He left Tangerine in 2018 to start Cut The Crap Investing, where he helps investors learn how to use ETFs, simple stock portfolio models and Robo Advisors to full advantage in the accumulation stage, and especially in retirement. A ‘hyper-focuser’ Dale has spent thousands of hours studying retirement – from the financial planning aspects to the portfolio models that make it happen. Early in 2025 he co-founded Retirement Club for Canadians, described in this Findependence Hub blog. Keep in mind Dale is not a financial planner. Retirement Club provides ideas and learning for consideration. As we know, self-directed investors are responsible for their own investment decisions. This blog originally appeared on his site on July 17, 2025 and is republished with permission.

Contradictory Retirement Plans

Posted By Financial Independence Hub | December 24, 2025

By Michael J. Wiener

Special to Financial Independence Hub

I get a lot of friends and family asking for help figuring out their retirement finances when they’re just a few years from retiring. These discussions follow a common pattern: people say they want to spend more in their 60s while they’re still able to enjoy new experiences, but they make plans that involve spending less in their 60s than they will have available in their 70s and beyond. They resist a simple idea even after I show them how much more they could be spending early on.

I’ll illustrate what’s going on with an example that borrows from some of the real cases I’ve helped with.

Meet Dan

Dan is a single guy about to retire at 60. Here are his relevant financial details:

TFSA: $200,000
RRSP: $300,000
Pension: $4000/month indexed to inflation + $800/month bridge until he is 65
CPP: entitled to 90% of the maximum amount ($826 at 60, $1290 at 65, $1832 at 70)
OAS: entitled to the full amount ($740 at 65, $1006 at 70, 10% increase at 75)

Dan tried to work out what to do on his own initially. His thinking was mostly short term. To compensate for his drop in income when he retires, he would take his CPP right away, and take his OAS at 65. He wants some money to do some traveling over the next decade, and his work pension isn’t enough.

Here’s a chart of Dan’s inflation-adjusted income based on these plans. Note that in nominal terms, his income will go up with inflation each year, but we show it in constant 2025 dollars.

The first thing to notice is that Dan hasn’t included his RRSP or TFSA in these plans. He didn’t really think about them; he just assumes that they are for “later.” By default, Dan will have to convert his RRSP to a RRIF when he’s 71, and will have to start drawing from the RRIF when he’s 72. Let’s add in Dan’s RRIF income, assuming conservatively that his RRSP/RRIF will earn 2% above inflation.

We see now that contrary to Dan’s stated goal of having more income for traveling in his 60s, he’s actually planning to live small in his 60s. This is the point where I suggest starting to draw from his RRSP/RRIF right from the start of retirement.

Immediately, we run into a problem. Dan doesn’t think of himself as the sort of person who spends his RRSP. That’s for old people. He doesn’t feel very old. He doesn’t like this idea. He’s still the kind of person who saves money.

Not everyone can get past this point. Some live small for years to give themselves a large income in their 70s and beyond. Let’s hope that Dan can get used to the idea of starting to live now. Here’s a plan that smooths out Dan’s RRSP/RRIF income: Continue Reading…