Spending from retirement savings, or decumulation, in a way that maximizes what you have left to spend after taxes is surprisingly complex.  I’ve done extensive simulations of various strategies for my situation, including strategies that change over time, to find what works best for me.  Here I describe how I’m managing my RRSP in retirement, but it’s important to remember that it may or may not work well for you depending on your particular circumstances. Looking for the fully optimal financial strategy is futile.  I ran my simulations and chose a simple enough strategy that worked well across a wide range of investment outcomes.  The only reason for changing my strategy is if something happens that is far outside my expectations.  Those who constantly seek perfection waste their time and hurt their outcomes with constant tinkering. Our portfolio and goals My wife and I have RRSPs, TFSAs, and non-registered accounts.  I prefer not to discuss exact amounts...

In his book The 5 Types of Wealth , Sahil Bloom makes the case that there is more to life than money, and that it is a mistake to sacrifice too much to get more money.  To most of us, this is so obvious that it’s not worth saying.  But a minority of us need to think about this message. Bloom lists the 5 types of wealth as “time, people, purpose, health,” and money.  Like much writing on this subject, the author presents the insight that there’s more to life than money as though it’s a new idea: “Where the old, default scoreboard was entirely based on financial wealth, the new scoreboard is grounded in the diverse pillars that define a truly wealthy existence.”  This isn’t news to the majority of people.  This majority never needed this insight, because they have never over-valued money. But for those who toil away for most of their waking hours at their jobs or running their businesses, Bloom’s ideas are important.  Perhaps for them, when they realize they’...

A recent Morningstar podcast gave me yet another reason to stay away from private equity.  Episode 357 of The Long View is an interview with Leyla Kunimoto who “is the founder and editor of Accredited Investor Insights , a newsletter that helps investors navigate private markets.”  Among other interesting insights, Kunimoto explained how the practical expedient rule allows private equity to maintain made-up valuations even after private assets are traded at lower prices. In public markets, company valuations are set by the actual price where willing buyers and sellers trade equities.  In private markets, equity valuations are made up.  The methods owners of private equity use to value their holdings can give a wide range of answers.  It’s up to savvy buyers to determine the true value of any assets they choose to buy.  All but the most savvy buyers of private equity are at risk of overpaying. There is now a proliferation of secondary private equity funds b...

The 2025 investment return for my overall portfolio measured in Canadian dollars was 13.7%, which is below my 2025 benchmark return of 16.0%.  There are two main reasons for this difference.  The first is that we made a large financial gift, and the timing of our stock sale to raise cash for this gift was unlucky.   The second reason is my decision a few years ago to shift gradually away from stocks when stock prices are high as measured by the cyclically adjusted price-to-earnings ratio (CAPE) of world stocks.  This shift is tied to my rebalancing plan that is automated in a spreadsheet.  My benchmark doesn’t do any automated shifting away from expensive stocks. This year, stock prices were high but they gave good returns anyway, and my slightly lower than usual allocation to stocks cost me money.  This has happened two years in a row now.  But I’m content with this outcome.  By shifting modestly away from stocks when they’re expensive, my p...

Long time reader Garth asked for my opinion on Wade D. Pfau’s essay Eight core ideas to guide retirement income planning .  Pfau is a smart guy and it’s no surprise that his article is excellent.  I do have some thoughts around the edges, though. “Play the long game” Pfau starts with an important point: “A retirement income plan should be based on planning to live, rather than planning to die.” This means that making sure you have enough money in old age is more important than trying to squeeze out as much money as you can in early retirement.  But we’re not asking you to sacrifice now.  By taking reasonable steps to protect your much older self, you’re freed up to spend a reasonable amount early in retirement without fear of running out of money.  Pfau lists six steps toward playing the long game which I’ll translate into the Canadian context. Delaying starting CPP and OAS As long as you have some savings to live on and you’re in reasonable health, delaying the...

Alts are all the rage now, at least among the people trying to sell them.  But every time I look into an alternative investment class and then back away from the details for a 1000-foot view, this is what I see: