TFSA is 100% equities, probably my heirs will enjoy all of it, unless things go bad.

I keep 7 years of expenses as fixed income. 35% is in my RRSP and 65% in taxable accounts.

That all sounds great. I do something very similar, with my TFSA loaded with stock index funds (high risk) and fixed income spread across the RRSP and taxable, almost exactly like you described.

I don't know if you need to change anything. I think it's logical to have all equities in the TFSA because these (assuming good index funds) have the highest expected returns. By keeping them in the TFSA, you are sheltering the stuff which would have the largest gains. I think this provides the biggest tax savings in the long term.

Fixed income will have lower returns and I think it makes sense to keep much of it in taxable accounts. Yes you'll pay a high tax rate, but the overall returns are low. Plus, the taxable account gives you access to the fixed income, and the whole point of holding it is so that you can draw from it when you need the money.

I plan to sell fixed income only in bad years. Yes, I need to work on defining what this means exactly to my eyes.

I think that basic asset allocation (AA) solves this problem. Let's say that you follow a 60% equity and 40% bond/GIC allocation. When stocks are doing well, your stock allocation becomes higher and you would occasionally rebalance back to your targets, maintaining 60/40.

Now let's say it's a bad year. Equities drop 20% and bonds are flat. You will then find yourself at weights 55% equity and 45% bonds... note that you're now overweight bonds.

You're retired and now you have to withdraw money out of your portfolio. Where do you grab the money from? Withdrawals should obey your asset allocation targets. You look at your current weightings and see that you are overweight bonds. You should always withdraw from the place where you're overweight.

The AA plan says that you must withdraw from your bonds in this kind of year (weak stocks). The same would happen if stocks totally crashed, because you would end up far underweight equities and far overweight bonds.

Conversely, in strong years, the % equity ratio would go higher and you would be underweight bonds... currently my own situation. When stocks are going up strongly, you will be overweight stocks, and withdrawals should come out of stocks.

 

Additional info would help with the request; overall mix (equity/FI), how much you need to withdraw each year relative to portfolio size, and effective tax rate. In general we need to look at the top down total aggregated portfolio and then determine a mix that provides the greatest after tax return/income/withdrawal support.

 

As mentioned above, more info would be good to understand what actions you could take.

I also plan to bring my RRSP down in 20 years, and possibly quicker to avoid even partial OAS clawback.

So you are 20 years from receiving OAS (at 65?) and want to reduce RRSP holdings for claw back reasons? So what age are you planning retirement (55,60?) and do you want to delay OAS to 70?

 

As mentioned above, more info would be good to understand what actions you could take.


So you are 20 years from receiving OAS (at 65?) and want to reduce RRSP holdings for claw back reasons? So what age are you planning retirement (55,60?) and do you want to delay OAS to 70?

Try 91 days.

My RRSP went a bit better than expected, I'd like it to be gone in 20 years, but in 12 years taking QPP/OAS at 70yo (if no big game changer.), the risks of significant OAS clawback because of excessive RRSP balance would be mitigated; we are talking just about taxable 8K+40%/yr, just nice to have.

My planned default AA for the whole PF was 35% US 35% CA 15% FI 15%. From that FI, 25% is in corporate bonds, the rest 75% in GICs & similar. Now I am surprised to be 19% FI, despite getting surprising returns on equities. I will likely aim 27% / 27% / 27% / 19%. US market is way too hot and over-evaluated, at the same time my ZSP/VGG exposure is 5.9% of the whole PF. The rest of my US equities is a large value mid cap MF (26% of PF) that returned 15% 3 yr, despite clearly. lagging this year. Its P/E is 13, about half of S&P and its holdings are generally good quality (American Express/Merck/PPG to name a few).

90% of my RRSP is equities, 10% FI.
27% of my taxable accounts is equities, 73% FI. In my eyes, in the accumulating phase, to be taxed on money not needed didn't sound right. Soon in decumulating phase, the other way around begins to make more sense.

 

I assumed (but stayed silent on) the RSP withdrawal issue (OAS clawback) to mean later in life (age) when mandatory withdrawals escalate.

Additional info will allow us to offer suggestions grounded in the nuances of your situation.

 

I begin to wonder if I should change the ratio of where my fixed income is.

At least on this part of the question, I think you are currently doing the right thing.

 

Based on a few hundred reports I've seen and/or projections I've done, some best practices @Saintor.

1. Unless you need TFSAs, soon, go with 100% equities or close to it for growth (whatever that may be). Later in life, having a very large tax-free emergency fund for you or hiers is golden.
I see no reason to spend TFSA assets early in retirement.
I've seen some couples in their 60s now with north of $500k combined in their TFSAss.
Pretty solid given money at 7% or so will double in value every 10 years without any further contributions...

2. Asset mix in other accounts is very subjective.

That said:

2a. I see "cash wedge" concepts in RRSPs/RRIFs since any money you need for withdrawals in the next 1-2 years is likely smart in cash/cash equivalents. Other successful retired CMFers can chime in on that. What they do for withdrawals. A cash wedge in registered accounts at all times avoids selling equities at the wrong time.

2b. I see cash savings/HISA, etc. in taxable accounts too. Just not too much since it's a drag on tax and cannot fight inflation well. At least a few months of expenses in cash savings/chequing, HISA, etc. makes sense vs. constant RRSP or RRIF withdrawals.

I certainly wouldn't trust just any CFP. There are CMFers who could likely run circles around many.

Interestingly enough, I will be writing on my site this weekend my take on this article. I'm currently 90% stocks and 10% cash/cash equivalents and have been for about a year now as I consider full retirement spring 2026 in my early 50s.

Asset allocation in retirement – the “safest” option may surprise you

Otherwise, I would largely agree with @james4beach :

Your desired asset mix tells you where to take the money from. If overweight on bonds, sell bonds; if overweight on stocks, sell stocks. The major challenge with this approach is you must sell to feed your lifestyle/expenses at a modest withdrawal rate.