I would be inclined to keep at least one if not 2 years' worth of withdrawals in cash/GICs/fixed income, etc. and if that doesn't sit well, then have another years' worth = Year 3.

Whatever that is, or more, that's your portfolio allocation.

 

I am not fond of the tax tail wagging the dog and I would not do anything to constrain/temper/reduce the return on a RRSP/RRIF.

If there is a choice/flexibility of using a non-reg account for higher performing equity assets and disproportionately holding conservative investments and fixed income in the RRSP/RRIF, then do that. That will mitigate OAS claw back.

There is nothing wrong with RRSP/RRIFs taxed as Other Income as it is simply repayment of the deferred tax loan. OAS claw back is pretty much a red herring, i.e. 15 cents on the dollar. I would much rather give up 15 cents on the dollar on OAS claw back in its entirety and get a 100% return on account assets than a 20% return on account assets and get some piddling OAS income. People are not thinking straight wringing their hands over high performing RRSP/RRIF accounts.

There is no right answer for portfolio allocation overall. My small RRIF is VCNS (40/60) and my other accounts are 100% equity other than my cash equivalent wedge.

 

I am not fond of the tax tail wagging the dog and I would not do anything to constrain/temper/reduce the return on a RRSP/RRIF.

If there is a choice/flexibility of using a non-reg account for higher performing equity assets and disproportionately holding conservative investments and fixed income in the RRSP/RRIF, then do that. That will mitigate OAS claw back.

There is nothing wrong with RRSP/RRIFs taxed as Other Income as it is simply repayment of the deferred tax loan. OAS claw back is pretty much a red herring, i.e. 15 cents on the dollar. I would much rather give up 15 cents on the dollar on OAS claw back in its entirety and get a 100% return on account assets than a 20% return on account assets and get some piddling OAS income. People are not thinking straight wringing their hands over high performing RRSP/RRIF accounts.

I agree with the underlined. I guess it's my psyche, with surprising high performing (or can be illusory right now) RRSP/RRIF since it mushroomed 4x value over past 15 yrs. Most definitely don't consider myself an investor undergoing great analysis and predictive modelling, like some folks here.

 

If your RRSP/RRIF has ballooned x4, in 15 years, you've done many things right.

 

Please don't make me giggle..... big part of it was sheer luck. Some stalwarts...CN, CPK (unless our rails get bombed...which can be real threat one day or there is another swallowing by American rail), CPX (I liked they are Alberta based. Logical, eh? ), CAE (nice for Canadian firm to corner flight simulation software with few other foreign competitors, etc.), SHOP (which some little bunches sold slowly since got seriously overweighted), etc. Haven't even barely owned U.S. stock in RRSP/RRIF. It's via ETFs. I sat on my butt for 7 years not moving, after a sister told me back then about wonder of EFTs. Did lose some $$$ on other stocks.

 

If you’re running a passive strategy and have an asset allocation plus IPS you only need to spend half an hour every few months. Maybe less. Focus on other things that matter, or you have control over.

 

You still end up with more money in your pockets even if you have to pay more taxes on the extra RRSP growth. There's no problem here, just let it be.

 

Totally agree. Having a massive RRSP (growing well) is not a big problem. Especially with the RRSP, where tax is simply deferred... the tax collection is fair, ultimately.

However, during one's working years, there is a legitimate question of how much to pump into the RRSP. That's a question during one's 20s-50s though.

 

An old guy once told me “you don’t need to lose it the same way you made it”

 

We will have all of our OAS clawed back and I couldn't care less. I do not view it as a problem, but rather look on it as being a very fortunate. Perhaps it's a good time to start or increase donating and gifting.

You may want to read about Variable Percentage Withdrawal Strategy. I find the withdrawal table an excellent guideline.

A Simple Retirement Using Variable Percentage Withdrawals (VPW Forward Test) - Financial Wisdom Forum

Discussion community where Canadian investors meet for financial education and empowerment on personal finance, taxes and investing in stocks, bonds and ETFs

www.financialwisdomforum.org

 

Exactly our position. DW delayed OAS until 70 but still has every dime clawed back. I will be in estimated 75 percent clawback territory this taxation year.

We are both thrilled amd thankful to be in such a position. My only hope would be that they further tighten the clawback rules but pass more monies on to those who are in need.

I have zero sympathy for those who moan that some or all of their OAS is being clawed back. OAS is not an entitlement.

 

We will have all of our OAS clawed back and I couldn't care less. I do not view it as a problem, but rather look on it as being a very fortunate. Perhaps it's a good time to start or increase donating and gifting.

You may want to read about Variable Percentage Withdrawal Strategy. I find the withdrawal table an excellent guideline.

A Simple Retirement Using Variable Percentage Withdrawals (VPW Forward Test) - Financial Wisdom Forum

Discussion community where Canadian investors meet for financial education and empowerment on personal finance, taxes and investing in stocks, bonds and ETFs

www.financialwisdomforum.org

Harder part is finding stock laggards to donate or I give up a few favourite babies which I donated $10K in shares last yr. I had not done that before ...because I never had to consider it.

I would love to have my RRSP, non-registered, etc. as a "tax bomb".

Funny --a tax bomb.

 

This is not a problem.

It is an opportunity.

 

Well put.

 

I wish I could “gift” mine to someone. I’ve met/know some people that work(ed) very hard and it could make a real difference.

 

I would have gifted all of it to my mother when alive. On top of the gift money I gave to her for past decade and more. She did get Gis.

 

I'm newish here, but why are you selling off your RRIF's? You"re only 66. What's your long term plan? I'm just curious.

 

It’s grown too large. I’m only doing withdrawals annually which is added to my pension income as normal. I should have stopped contributing to RRSP when I was still working when I had reached a certain total RRSP amount.

 

I agree that if you're in OAS clawback territory, that is a good problem to have, but only if you have done proper tax planning in the years leading up to it.

There are numerous ways of minimizing your lifetime tax bill, including avoiding or at least minimizing OAS clawback if you plan ahead.

 

I may need to revisit my retirement planning. I am not concerned so much with OAS clawback. As noted upthread, such a wonderful problem to face. However, I have always contributed heavily to my RRSP (maxed) each year and used the refund for further (RRSP or TFSA contributions) I am at the point where my RRSP is maxed and soon my TFSA will be again . (withdrew some recently to eliminate the mortgage.) Unfortunately, I won't get much gain from spousal as Mrs. London and I are almost the same age and our retirement income will be fairly similar. Will take advantage where we can but It's not the same as when being single income coupled households was the norm. I have some concerns in drawing down my RRSP too much too quickly but perhaps a VPW strategy is enough to mitigate that concern. When will AI be able to tell me how long I'll live and how healthy I'll be in the future. Certainly would simplify matters greatly.

@jlunfirst it may be worth your time and money to meet with a tax specialist. I have plans to the same at or near retirement. (2 to 3 years) Perhaps I should do so now or at the latest 5 years prior and then revisit each year or two based on any significant changes.

 

We started our tax planning about five years prior to early retirement. We started early retirment with a forward tax plan that has served us both well.

My advice....do not wait until retirement or early retirement. Effective tax planning that encompasses registered accounts often requires deliberate actions over a number of years.

Those are forward years, not rear view mirror years!

Even then....there are always those unanticipated events or surprises that can impact your tax position in the short or the long term.

 

Thanks @ian. I have posted elsewhere that most of the people that attend my workplace pension are either brand new or retiring within a year. Most likely do not track their investments like those of us at CMF. Not to derail Jlun's thread but some additional insight as to why I initially felt 5 years was too far out and targeted 3 years. I would be trepidatious to trust a forecast that far in advance. Totally ridiculous on my part as I am trusting my own forecasting now for investment targets and I am not a tax expert. I figured if at 3 years out my numbers said I needed to work longer due to tax concerns that I could easily do so. Again short sighted as we don't always get to pick our exit. I was more than happy to pay the taxes whatever they may be when I started saving for retirement. I was certainly more focused on SORR when considering my retirement plan. The closer I get the more I realize taxation is something I should pay more attention to going forward. SORR is something you should consider, but is also more left to market action. Always, good to learn from the experience of others in advance rather than your own later. Thanks @jlunfirst for starting this thread.

 

I certainly didn't expect my dear late partner to die suddenly...that affected my pension income much more + impact of RRIF withdrawals to total annual. I'm probably overworrying. No doubt market right now may look different in late 2026. No doubt some investors are rushing/sitting on edge a little breathlessly to take advantage of high returns now before J. Powell's retirement in June 2026 (we know Trump dislikes him as a big boulder in his path), then we don't know about renegotiation outcome of USCMA trade agreement amongst CAnada, US and Mexico .. settled after /by Jul. 1, 2026??? Of course, many investors distinterested in key economic decisions, just pile along like yahoos on the snakey road to riches.