For the first 30 or so years of working, saving and investing, you’ll be first in the mode of getting out of the hole (paying down debt), and then building your net worth (that’s wealth accumulation.). But don’t forget, wealth accumulation isn’t the ultimate goal. Decumulation is! (a separate category here at the Hub).
Here’s a look at some of your best retirement investment management options and choices. These include pensions, RRSPs, RRIFs and more.
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Your retirement investment management plan should build in contingencies for long-term medical needs and supplemental health insurance. As well, you should factor in caring for loved ones who are unable to take care of themselves.
When you work out a plan for your retirement, make sure that you aren’t basing your future income on overly-optimistic calculations that will end up leaving you short.
Retirement income can come from many different sources, such as personal savings, Canada Pension Plan, Old Age Security, company pensions, RRSPs, RRIFs, and other types of investment accounts.
Learn how your retirement investment management works in a Canada Pension Plan (CPP)
The Canada Pension Plan, or CPP, is the name for the Canadian national social insurance program. The program pays out based on contributions, and it provides income protection for individuals or their survivors in the instance of retirement, disability or death. Since 1999, the CPP has been legally permitted to invest in the stock market.
Nearly all individuals working in Canada contribute to the CPP, unless they live in Quebec, where the Quebec Pension Plan (QPP) exists and provides comparable benefits.
Applicants can apply to receive full CPP benefits at age 65. The CPP can be received as early as age 60 at a reduced rate. It can also be received as late as age 70, at an increased rate.
Here’s a look at some of the pensions or benefits provided by the Canada Pension Plan:
Retirement pension
Post-retirement pension
Death benefit
Child rearing provision
Credit splitting for divorced or separated couples
Survivor benefits
Pension sharing
Disability benefits
Use a Registered Retirement Savings Plan (RRSP) as a starting place when you look into retirement investment management
RRSPs were introduced by the federal government in 1957 to encourage Canadians to save for retirement. Before RRSPs, only individuals who belonged to employer-sponsored registered pension plans could deduct pension contributions from their taxable income.
RRSPs are a form of tax-deferred savings plan. They are a little like other investment accounts, except for their tax treatment. RRSP contributions are tax deductible, and the investments grow tax-free.
You might think of investment gains in an RRSP as a double profit. Instead of paying up to, say, 50% of your profit to the government in taxes and keeping 50% to work for you, you keep 100% of your profit working for you, until you take it out.
Convert an RRSP to a RRIF to create one of the best investments for retirement
Converting your RRSP to a RRIF is clearly one of the best of three alternatives at age 71. That’s because RRIFs offer more flexibility and tax savings than annuities or a lump-sum withdrawal (which in most cases is a poor retirement investing option, since you’ll be taxed on the entire amount in that year as ordinary income). Continue Reading…
Investing in companies that sustain and/or increase their dividends through different economic cycles is widely regarded as a prudent investing strategy, as sustainable dividend policies typically serve as a proxy for identifying high-quality businesses.
Companies with a track record of dividend growth often exhibit strong, reliable cash flows, disciplined capital allocation, and a clear commitment to returning value to shareholders. Such an investing approach can provide a steadily rising income stream to help offset inflation and enhance total returns over time.
We are excited to unveil the HAMILTON CHAMPIONS™ ETFs: built for long-term growth from exposure to blue-chip Canadian and U.S. companies with consistent track records of growing dividends (CMVP/SMVP). The suite also includes two Enhanced HAMILTON CHAMPIONS™ ETFs that utilize modest 25% leverage to further enhance long-term growth potential (CWIN/SWIN).
The HAMILTON CHAMPIONS™ ETFs are designed to track the Solactive Dividend Elite Champions Indices[7]. Boththe Canadian and U.S. indices have demonstrated strong performance and low volatility historically relative to the S&P/TSX 60 and the S&P 500, respectively.
Canadian HAMILTON CHAMPIONS™ — Growth of $100K [8],9]
U.S. HAMILTON CHAMPIONS™ — Growth of $100K [8, 10]
The Canada Dividend Champions Index and U.S. Dividend Champions Index are designed to provide equal-weight exposure to blue-chip stocks, listed in their respective countries, with a long history of dividend growth/sustainability. The result is a Canadian and a U.S. index with favourable performance and risk profiles vs. the S&P/TSX 60 and S&P 500, respectively. In addition, both indices have demonstrated (i) lower relative volatility; (ii) lower relative drawdowns; and (iii) faster relative time to recovery.
DISCLAIMER: see footnotes 1-5 below
Proven Winners, Rising Dividends
The Solactive Dividend Elite Champions Indices are focused on delivering diversified portfolios of companies with a long history of increasing dividends. The resulting portfolios have the following important characteristics: Continue Reading…
Inspiration for this post arrived from attending a few retirement parties of late with work colleagues, another one as recently as yesterday and a few more to attend this spring.
Is age 50 too young to retire?
What about age 55? Age 60?
After talking to some work colleagues who submitted their retirement letters and who are now moving on, I know their ages. The celebration yesterday was for someone in their early 60s. They talked and yearned about more time at their cottage, doing small home reno projects, and leaving early morning Microsoft Teams calls in the rearview mirror.
They also talked about their desire to retire now since they “had enough” both mentally and financially: support from the latter after working with their financial advisor or planner and doing some retirement math on their own to bridge the gap between spending needs now and when their pension benefits would kick in, at age 65, including their firm intention to take CPP and OAS at that age too.
Although I’m leaping to lots of assumptions here, this makes me believe that the personal retirement savings of some work colleagues (the sum of RRSPs, TFSAs, non-registered investments or other assets) is likely small to modest beyond a workplace pension: in that they needed to work to ensure they were not sacrificing their personal portfolio too much, too soon. I get that. After decades of raising a family, buying a cottage, paying down a mortgage or two along with other expenses I’m sure, it seems my colleague was more than ready to permanently slow down; cut the cord from work and enjoy their time more while they still have decent health. Good on them. 🙂
This individual is however not the first person to mention the following to me:
“Oh, I can’t afford to retire yet but thinking age 63 or so should be fine since that’s when I can get my full OAS and decent CPP income.”
And my work colleague is hardly alone …
In looking at some stats (Source: StatsCan) the average age of retirement is hardly for anyone in their 50s:
These are also not easy times to retire…
Rising general inflation, uncertain tax rates, and higher healthcare costs could very well impact many retirees at any age. Myself included. Certainly, starting to save for retirement early and often and getting out of debt faster than most would be enablers – and I hope they have been for us.
You are too young to retire – is early retirement right for you?
Although many Canadians seem to expect to retire between the ages of 60 and 70 above, there is absolutely no hard and fast rules about when you need or must stop working of course.
Your retirement timeline will depend on many factors, I’ve highlighted some milestone ideas below:
Somewhere between 3-5 years before retirement, it’s probably wise to get some retirement details in order. Accuracy isn’t overly important IMO but the process of planning is.
I recall focusing on our desired lifestyle and spending habits to go with it: what early retirement or semi-retirement or full retirement might look like:
We started estimating our retirement spending levels, our income sources, and inflation factors.
We started evaluating our portfolio returns over the last 5- or 10-years.
We looked seriously at our sustainable cashflow from our portfolio (passive dividend and distribution income since we’d be too young to accept any workplace pension or any CPP or OAS government benefits).
We started tracking our spending in more detail to challenge those spending assumptions.
1-2 Years Before Retirement
As recently as early 2024 for us, things got more serious.
In the year or so leading up to any big decisions, more detailed planning kicked into higher gear:
We spent more time as a couple talking about how to put some travel dreams into reality – multi-week vacations in the coming years away from icy/cold Ottawa winters.
We started to explore ways at work to test some semi-retirement assumptions; the desire but also the financial flexibility to work part-time vs. full-time (i.e., could we still make ends meet).
We started to look into post-retirement healthcare insurance options, where needed.
We started to talk about our purpose (if not working at all) – what would we do with our time?
Although we might be in this timeline, not sure, since part-time work is now occurring with our solid employer (this could continue for both of us??) but this is where the real retirement countdown calendar probably begins for most people…as you strike full-time working days off your calendar: Continue Reading…
Discover unconventional paths to Financial Freedom that go beyond traditional advice. This article presents surprising strategies, backed by expert insights, that can transform your approach to wealth-building. From maintaining your lifestyle despite income increases to investing in non-financial assets, these innovative methods offer fresh perspectives on achieving financial success.
Maintain Lifestyle Despite Income Increases
Access High-Value Real Estate Through Syndications
Build Wealth with Niche Websites
Invest in Non-Financial Assets for Growth
Profit from Surplus Business Equipment Sales
Turn Discarded Inventory into Profitable Ventures
Monetize Legal Downtime with Tech Solutions
Transform Teaching into Wealth-Building Opportunity
Generate Passive Income by Renting Unused Space
Leverage Prop Trading Firms for Capital Growth
Maintain Lifestyle despite Income Increases
One unconventional yet effective method I tried to grow wealth and become financially independent is strategically managing lifestyle deflation in alignment with income changes. In simpler words, this means continuing to maintain the same lifestyle and budget even when your income increases, instead of adjusting your expenses alongside it.
I learned to prioritize this in my younger years after seeing people around me struggling to maintain their lifestyles despite rising income. I noticed they were increasing their expenses as their income grew. Most of these expenses were smaller differences that usually go unnoticed but compound to a bigger sum when you see them in total. Examples include subscribing to more services than before, buying more expensive items because they can now afford them, etc. Seeing all this, a thought nagged me often: “What would happen if they saved the raise they got instead of spending it immediately?”
As I learned more about personal finance, budgeting, etc., I started making a conscious effort to maintain the same lifestyle as always even as my salary grew. I funneled the extra sum into various investments instead. Over the years, this habit helped my net worth increase without compromising my quality of life.
Here are some tips I will offer others in this regard:
Automate the transactions into specific accounts: Immediately redirect your extra amount into another savings account for debt repayment and investments. This will help you avoid impulsive spending.
Understand wants vs needs: Take a broader look at your budget, including things you spend on usually. List all the expenses you make and consider which are important and which you can postpone for later since there is no immediate need. Doing this will help you stay focused.
Track net worth monthly: Make sure to track your investments frequently. Seeing your net worth grow will keep you motivated to continue your habit and avoid unnecessary purchases. — Lyle Solomon, Principal Attorney, Oak View Law Group
Access High-value Real Estate through Syndications
One unconventional way I’ve built wealth that surprised me on my journey to Financial Independence is through the strategic use of real estate syndications. While many focus on buying individual properties, I discovered that pooling resources with other investors allowed me to access high-value opportunities I wouldn’t have been able to tackle alone.
This method allows you to invest in larger commercial properties with a group of people, benefiting from economies of scale and shared risks. I first came across this approach through networking with experienced investors and learning about the power of group investment.
My advice to others would be to build a solid understanding of how syndications work and start small with reputable groups. It’s a unique way to scale wealth while minimizing individual risk, and it’s often overlooked compared to traditional property purchases. Collaborating with experienced partners can unlock doors to lucrative projects that wouldn’t be accessible otherwise. — Jonathan Ayala, Licensed Real Estate Salesperson | Founder, Hudson Condos
Build Wealth with Niche Websites
One unconventional way I’ve built wealth that really surprised me was by doubling down on building tiny niche websites. Early in my career, I thought the only path to success was creating huge, authority-style blogs. But after some experimentation, I realized that smaller, hyper-focused sites could generate a steady income without requiring a massive team or overhead.
I stumbled onto this by accident while testing out ideas that didn’t quite fit my main business. A few of these small projects started making a few hundred dollars a month each, and when you scale that up across multiple sites, it becomes something compelling. The magic is in finding a narrow topic where you can be the absolute best resource online, even if it’s something super specific.
For anyone interested, I suggest thinking smaller, not bigger. Find those underserved niches where competition is low, but passion or need is high. Focus on genuinely helpful content, optimize it properly, and be patient. It’s not a get-rich-quick strategy, but it is an incredibly reliable way to build passive income streams.
This approach allowed me to diversify without putting all my eggs in one basket and played a big part in reaching Financial Independence sooner than I expected. — James Parsons, CEO, Content Powered
Invest in Non-Financial Assets for Growth
One unconventional way I built wealth was by keeping a “no-market” year. For twelve months, I chose to remove myself from investing in anything that required speculation, interest, or growth. Instead, I focused on building non-financial assets: time, skill, energy, and relationships. I tracked it like a portfolio: hours of learning, time saved by simplifying routines, days reclaimed from overcommitting, and people I could count on for collaboration. That “quiet compounding” brought in far more than my typical quarterly gains ever did. I walked into the next year with three new paid projects, two solid partners, and almost double the free time.
I discovered it accidentally after turning down a contract that would have pulled me out of integrity. I gave myself permission to step back and see what kind of return I could build without putting money anywhere. I suggest trying this as a 90-day experiment. Track the non-financial gains as seriously as you would your net worth. Value created in learning, trust, and creative space often turns into money later. The catch is, you have to believe it is real before anyone else does. Once you see it, it is hard to go back. — Adam Klein, Certified Integral Coach® and Managing Director, New Ventures West
Profit from Surplus Business Equipment Sales
Purchasing and selling surplus business equipment was much more profitable than previously thought. Initially, it was just a game of turning what companies didn’t want into something useful. But as time went by, I learned what had actual value was an awareness of where the demand was: what buyers were searching for but couldn’t be found easily. That gap became an opportunity.
I became interested in it on a whim when assisting someone with liquidating their lab, and saw its inefficiency. So we built a system around it. My advice? Identify supply chain omissions or inefficiencies in industries that people do not pay much attention to. The more untrendy it sounds, the more opportunities you’ll have if you’re willing to master it inside out. — Joe Reale, CEO, Surplus Solutions
Turn Discarded Inventory into Profitable Ventures
I started buying leftover inventory from failed event suppliers. Half the time they were happy just to offload it for $0.10 on the dollar. I mean, we once picked up $35,000 worth of LED wall panels for $2,800, stacked them in our warehouse, and rented them out per gig for $650 a pop. In under four months, they paid for themselves, and we have since generated over $48,000 in revenue from those same panels. Everyone wants to build wealth from stocks or SaaS. I just bought junk others walked past and turned it into profit. Continue Reading…
Utility investments typically benefit from stronger economic activity, and a top Canadian utilities ETF will let you take advantage of this: if you watch for low fees and sound stock holdings
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Utility stocks are shares in companies that provide electric power, telecommunications, pipeline services and so on. Canadian utility shares have always been great sources of tax-advantaged distribution income.
While most utility stocks are steady income producers, some utilities also offer opportunities for growth. This happens mostly when utilities expand into new markets or geographic regions.
We still feel that investors will profit the most with a well-balanced portfolio of high-quality individual stocks, but ETFs can also play a role in a portfolio.
Holding utilities, or a Canadian utilities ETF, can be a sound component of most investor portfolios.
What kind of companies are included in Canadian utilities ETFs?
Canadian utilities ETFs typically include companies from several sectors, such as electric utilities providing power generation and distribution, natural gas utilities, water utilities, telecommunications companies, and pipeline operators that transport energy resources.
What are the risks of investing in Canadian utilities ETFs?
The main risks of investing in Canadian utilities ETFs include regulatory changes that could affect utility companies’ profitability, interest rate sensitivity that can cause price drops when rates rise, and concentration risk if the ETF is heavily weighted toward a few companies or specific utility subsectors.
Characteristics of the best utility investments
The best utility stocks, or ETFs that hold them, can deliver predictable, lower-risk dividends.
Traditionally, the utilities sector is said to suffer when interest rates rise: or if the market is worried about a rise.
This is because utilities typically have a lot of debt as part of their capital structure, and higher rates make it more expensive to raise money and refinance existing debt. As well, their shares, which typically offer high yields, compete with fixed-income instruments for investor interest.
However, higher interest rates are usually accompanied by increased economic activity and growth. That stronger economic activity is good for utilities: It pushes up demand for their power and so on and at the same time boosts the electricity rates they charge their customers.
Regardless of those positives, as interest rates rise, investors often sell off, or avoid, utilities stocks, and that can push down their price. Given the formula for dividend yield — specifically, annual dividend rate/stock price — a falling stock price (the bottom number in the fraction) pushes up the yield. In other words, when the stock price goes down, its dividend yield goes up.
How are Canadian utilities ETFs structured?
Canadian utilities ETFs are typically structured to track specific indexes using different weighting methodologies, with equal-weight and market-cap approaches being the most common.
When looking for investments in the utility sector, investors should avoid judging a company based solely on its dividend yield. That’s because a high yield can sometimes be a danger sign rather than a bargain. For example, a company’s dividend yield could be high simply due to its share price having dropped sharply (because you use a company’s share price to calculate yield). That low price can be a sign of an imminent dividend cut.
Apart from a good dividend yield, the utility stocks you invest in should have a long history of paying (and raising) their dividends. For a true measure of stability, focus on those companies that have maintained or raised their dividends during economic and stock-market downturns.
Are Canadian utilities ETFs a good investment for stability and income?
Canadian utilities ETFs typically provide stable income through consistent dividends and lower volatility compared to broader market investments, making them generally suitable for investors seeking stability and regular cash flow.
The best ETFs are focused on simple goals. Instead of picking and trading investments, operators of these ETFs manage investors’ money “passively,” with the goal of duplicating the performance of a market index. This lets the operator charge very low MERs (management expense ratios) compared to an average MER on conventional mutual funds of 2%-3%. Continue Reading…
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