How much can you spend in Retirement this year? A simpler way to Track Withdrawals

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By The Yearwell Team

(Sponsored Blog)

Most Retirement advice is about getting to the finish line: saving, investing and making the most of your RRSP and TFSA room. Far less is said about what happens next, when the paycheque stops and you start drawing down what you’ve built.

For many retirees, that switch is harder than expected. The question changes from “How much should I save?” to “How much can I safely spend this year?” And it comes back every time you move money out of a RRIF, a TFSA or a non-registered account.

Start with one number for the year

A simple way to answer it is to turn your savings into a yearly spending allowance. Many people start with a withdrawal rate, such as the well-known 4% rule: take about 4% of your portfolio in the first year, then adjust that dollar amount for inflation in the years that follow. Some prefer 3% for an extra margin of safety; others go a little higher because they have a pension or plan to spend more in their early, active years.

None of these numbers is a guarantee, and the right rate depends on your age, other income, taxes and comfort with market swings. That’s a conversation for you and your planner. But having one clear number for the year makes every other decision easier.

Don’t forget the RRIF minimums

In Canada, RRIFs add a wrinkle. Once you convert, you must withdraw at least a minimum percentage each year, starting at 5.28% at age 71 and rising after that. If your RRIF minimum is more than you plan to spend, the extra can go into a TFSA or a non-registered account instead of being spent. Keeping track of what you’ve withdrawn, and from which account, also means fewer surprises at tax time.

Track your pace, not just your total

The other half of the job is following the plan through the year. Spending in retirement is lumpy: a new roof in the spring, a trip in the fall, gifts in December. Looking at account balances alone won’t tell you whether you’re ahead of or behind where you meant to be. A simple monthly check will: compare what you’ve actually withdrawn with an even pace for the year, and you’ll know whether to ease off or relax.

Rising costs make this matter more. When fuel, heating and groceries jump, a budget that felt comfortable in January can feel tight by the fall. Reviewing your allowance once a year, and checking your pace every month or two, is usually enough to stay on course.

Where Yearwell fits

We built Yearwell to make this routine easy. You add your accounts, such as a RRIF, RRSP, TFSA or non-registered investments, and pick a withdrawal rate. Yearwell turns that into a yearly allowance, lets you log each withdrawal in a few seconds, and always shows how much is left for the year and how you’re pacing month by month. You can test different rates to see roughly how long your savings could last, and at year end it creates a one-page summary you can share with a partner or planner.

It’s private by design: there are no bank logins and no sign-up, and your information stays on your phone. Yearwell is free to download on the App Store and Google Play, with optional Pro features. Learn more at yearwell.app.

The bottom line

Retirement income doesn’t need a complicated spreadsheet. Pick a sensible yearly number, know your RRIF minimums, and check your pace as the year goes on. Whatever tool you use, the goal is the same: spending with confidence instead of guessing.

This post is for general information only and is not financial advice.

About the author

Yearwell is a free retirement withdrawal tracker for people living off their savings. Set your withdrawal rate, see your yearly spending allowance, log each withdrawal and always know what’s left, with no bank logins. Learn more at yearwell.app

Deja vu all over again: The case for Dividends and Low-Volatility stocks

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Shutterstock (Yury Zap)

By Noah Solomon,

Special to Financial Independence Hub

You go back, Jack, do it again, wheel turnin’ ’round and ’round
You go back, Jack, do it again

— Do It Again, by Steely Dan

 

 

 

 

The Historical Track Record: What has Worked

Eugene Fama, an American economist and Nobel Laureate, is recognized for his work on portfolio theory. Fama is best known for his groundbreaking research on multi-factor models, which incorporate multiple variables to better explain portfolios’ risks and returns.

In collaboration with Kenneth French, Fama challenged the widely held belief that a portfolio’s beta (its sensitivity to overall market movements) is the sole determinant of its average return. Developed in 1992, the original Fama-French Three Factor model demonstrated that smaller companies tend to outperform larger ones, and that stocks with lower valuations tend to outperform those with higher ones.

Since Fama and French’s original findings, academic research has identified additional characteristics that further explain a portfolio’s return, including its dividend yield and volatility. Over the long-term, less volatile stocks have outperformed their more volatile counterparts, and stocks with higher dividend yields have outperformed those with no or lower ones. Moreover, both low-volatility and higher-yield stocks have exhibited considerably less volatility than the overall market.

Low Volatility & Higher Dividend Yielding Stocks vs. Overall Market (1964-2025)

If only Life were so Simple

The above table implies that investors should simply hold low-volatility companies that have higher than average dividend yields, sit back, enjoy above-market returns, and accumulate significantly more wealth over the long term.

As is often the case with investing, things are not so simple. Although these characteristics have indeed delivered impressive long-term performance, the proverbial “ride” has entailed some painful bumps in the road.

In times when investors are most optimistic and speculative fervor is widespread, markets tend to underprice risk, which leads to a relative undervaluation of companies with defensive attributes vs. their more speculative peers. Such was the case in the dotcom-fuelled bull market of the 1990s, when both low-volatility and higher-yield stocks materially underperformed their more speculative counterparts.

Low Volatility & Higher Dividend Yield Stocks vs. Overall Market (1990-1999)  

Notwithstanding the long-term outperformance of low volatility and higher dividend yielders, FOMO (fear of missing out) is a powerful force that can have perverse effects on behaviour. Many investors found it excruciatingly painful sitting with these holdings as they lagged the high-flying darlings of the day. None other than J.P. Morgan himself stated, “Nothing so undermines your financial judgement as the sight of your neighbor getting rich.”

Importantly, those who had the fortitude to stick with their low volatility and higher dividend yield holdings would have reaped significant rewards over the ensuing decade.

Low Volatility & Higher Dividend Yield Stocks vs. Overall Market (2000-2009)

 

The trillion-dollar question is: When one incorporates the mechanics of compounding, how did low-volatility and higher-dividend-yield stocks fare over the entire twenty year “round trip” from 1990-2009? As the table below illustrates, investors who remained steadfast in the 1990s as their “boring” portfolios underperformed were more than compensated for their patience.

Low Volatility & Higher Dividend Yield Stocks vs. Overall Market (1990-2009)

 

Summing it all up, the historical data indicate:

  • Despite underperforming during periods of well above average returns that beget speculative fervor and unusually low risk aversion, low-volatility and higher-dividend-yield stocks have outperformed materially over the long term.
  • The relative performance of stocks with these characteristics is strongest in periods of market stress: they deliver outperformance and portfolio diversification when it is most needed.

Déjà Vu all over again

The outperformance of low-volatility and higher-dividend-yield stocks was particularly pronounced during the “lost decade” of 1999-2009, which is the only 10-year period since 1964 in which U.S. stocks had negative average annualized returns. However, these characteristics don’t need a highly unfavourable environment to shine, nor do rising markets necessarily cause them to underperform.

Low Volatility & High Dividend Stocks: Rolling 10-Year Annualized Returns (1964-2025)

 

 

From a historical standpoint, the underperformance of low-volatility and higher-dividend yield stocks over the past ten years is highly anomalous. The only other ten-year period that witnessed this phenomenon was the dotcom-based bull market of the 1990s, which was followed by an unusually strong period of outperformance for low-volatility and higher-dividend-yield stocks.

We can do this the Easy Way or the Hard Way

Since markets bottomed in March 2009 following the global financial crisis, the S&P 500 has delivered an annualized return of 16.4%, as compared to its long-term average of 10.2%. Continue Reading…

Budget 2026: RRSPs for life, higher T1135 limits on foreign securities, later tax filing deadline and more

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Budget 2026 — unveiled Thursday — contains many tweaks to the personal and corporate tax system. Unlike previous years, I refrained from posting initial comments in the hour after release. Over the years and decades, Canadian governments have tended to make the federal budget an event normally held in the first few months of the new year, so I found this particular budget snuck up on me, and perhaps on you!

Not being in Ottawa for the lockup, it’s no simple quick read. You can find out yourself by downloading the more than 500 pages here. Pretty overwhelming, so it’s no surprise that the Globe & Mail’s Andrew Coyne cynically summed it up thusly (hyperlinked headline for subscribers): “A strange budget, as opaque as it is complacent.”

“I give up,” Coyne quipped, saying federal budgets have “become utterly incoherent, wandering, purposeless and, frankly, impossible to understand.” He laments the reality that “with federal debt at about 40 per cent of GDP, and provincial government debts adding up to about 30 per cent of GDP, total net public debt is now in excess of 70 per cent of GDP.”

Other than that, I’m not going to reprise the mass media’s major points on the exploding Debt and rises in Defence spending. What follows is what captured my own attention as an investor and semi-retiree, not to mention someone whose daughter is finally dipping her toes into the costly Toronto housing market.

I found the highlighted RBC Wealth Management’s key takeaways mercifully succinct. Thus, it says there are “no proposed changes to the general personal or corporate income tax rates” but a number of proposals to simplify the Canadian tax system. I can’t help but reflect that the very phrase “simplify the Canadian tax system” is the ultimate oxymoron!

Later annual Tax Filing deadline

Extending the annual tax filing deadline from the traditional April 30th to May 15th will no doubt be welcome for procrastinators, although if enacted it would not apply until the 2027 Tax Year (i.e. May 2028). Our family typically tries to escape winter in January and much of February, so if that measure takes hold, we will welcome the eventual filing respite. The measure would also apply to the self-employed.

RRSP for Life

I’m still scratching my head about the concept of an “RRSP for life,” well explained in this Investment Executive article: Budget proposes RRSP for life, eliminating need to convert to RRIF. Minimum withdrawal requirements wouldn’t be affected and would still begin at age 71, it said. It “also plans to simplify transfers to a surviving spouse by allowing them to be named a successor holder for an RRSP, as is currently allowed for successor annuitants in RRIFs and TFSAs. This could permit the RRSP to remain open until the death of the surviving spouse.”  IE quotes CIBC Wealth’s Tax guru Jamie Golombek  to the effect the proposal is “a novel approach … It sounds like they want to get rid of the whole RRIF concept altogether, and just have the RRSP, and the RRSP goes on forever until death or until the last to die, if you have a spouse or common-law partner.”

However, the changes necessary to implement all this could mean it will take a few years to get it in place, Golombek warned.

The article also describes pre-budget recommendations for Ottawa to raise the RRSP-to-RRIF conversion age from the current 71 to 74 or 75.

Doug Carroll, tax and estate specialist at Aviso Wealth, points out in this G&M article that the RRSP for Life reform “would not change the obligation to make those minimum withdrawals after age 71. Instead, it would simply spare Canadians the paperwork and hassle of converting their account.”

Higher Foreign Content limits on T1135 form

One measure I didn’t see emphasized in the initial wave of publicity was about Form T1135, the Foreign Income Verification Statement. Up until now, Canadian residents, corporations, trusts and certain partnerships had to file this form above a threshold of $100,000 in specified foreign property held in taxable (non-registered) investment accounts. Budget 2026 proposes to double this threshold to $200,000, which any investor in (mostly) US securities would surely welcome. According to RBC, the CRA “would also increase the threshold for simplified reporting from less than $250,000 to less than $500,000.”

As I understand the current rules, the existing $100,000 threshold applies to foreign securities (like US stocks and ETFs) held in taxable accounts and is defined as the initial cost, not current market value. For couples it’s $100K per spouse. Because it is a laborious process to track and report, I’ve always been careful to stay well below this threshold. If and when the measure is official, it would be nice to be able to add to non-registered foreign investments.  But I’ll believe it when I see it.

Affordability Measures

As expected, Budget 2026 proposes several measures aimed at mitigating the high cost of daily living, particularly for young families. Thus, Ottawa is proposing a one-time supplement to the Canada Groceries and Essentials Benefit, which helps lower the GST for low-income taxpayers. As noted in the same G&M overview, the one-time supplement to the benefit would be equal to half the amount that beneficiaries are eligible for in the current benefit year, which runs until the end of June 2027. To be delivered as a one-time payment early next year, the supplement would be up to $223 per adult and $117 per child, with a $117 top-up for single adults. It added that Ottawa has “already delivered a one-time 50-per-cent benefit supplement in June, followed by a 25-per-cent increase to the regular, quarterly benefit payments that is set to last until 2031.” Continue Reading…

Part-Time Work in Retirement: Money and Purpose

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Image created by Alain Guillot with ChatGPT

 

By Alain Guillot

Special to Financial Independence Hub

Most people think of retirement as the moment they finally stop working. But what if part-time work in retirement could make your life richer, not just financially, but socially, emotionally, and intellectually?

We spend decades saving and investing so that one day we can afford to stop working. Yet when that day arrives, many retirees discover something unexpected: having enough money doesn’t necessarily mean having a fulfilling life.

I believe there’s a better way to think about retirement. Instead of asking, “When can I stop working?” perhaps we should ask, “What kind of work would I enjoy doing if I no longer needed the money?”

That simple change in perspective can transform retirement.

My personal experience: Working because I want to

I’m approaching 60, and I consider myself financially independent. I’ve spent years saving and investing, and I’ve built enough financial resources that I don’t need employment income to support my retirement lifestyle.

Nevertheless, I continue working approximately 20 hours per week as a dance teacher, earning around $2,000 per month.

That’s $24,000 per year.

I don’t need this money to pay my bills. But I enjoy earning it, and I enjoy the work that produces it.

Teaching dance keeps me physically active. It allows me to meet people, maintain friendships, participate in my community, and feel that I’m contributing something valuable.

There’s also something deeply satisfying about getting paid to do something I genuinely enjoy.

My work gives structure to my week without dominating my life. I have plenty of time for reading, writing, investing, socializing, and pursuing other interests.

For me, this is an ideal balance between work and retirement.

And the additional income? That’s a wonderful bonus.

The Financial Power of Part-Time Work in Retirement

Let’s look at the numbers, because the financial benefits can be surprisingly large.

Financial planners frequently discuss the 4% rule, a retirement guideline suggesting that a retiree might initially withdraw approximately 4% of their investment portfolio annually, adjusting subsequent withdrawals for inflation.

Under this framework, every $1,000 of annual retirement income is roughly equivalent to having $25,000 invested.

Consider the following examples:

Think about that last number.

By earning $2,000 per month teaching dance, I generate the same initial annual cash flow that a $600,000 investment portfolio would provide under the 4% guideline.

Of course, this doesn’t mean my part-time job is literally worth $600,000. Investment assets can appreciate, provide income without requiring work, and potentially be passed to heirs. Employment income depends on my continuing to work.

Still, the comparison illustrates how powerful even modest earnings can be.

You don’t need to Earn $2,000 per Month

Not everyone wants to work 20 hours per week.

Suppose you enjoy gardening and earn $500 per month helping neighbors maintain their gardens.

That’s $6,000 per year.

Using the same 4% comparison, this income is equivalent to the initial annual withdrawal from a $150,000 portfolio.

For someone concerned about having enough retirement savings, that additional income can make a meaningful difference.

The key isn’t to earn as much as possible. It’s to find an amount of work that improves your life rather than complicates it.

Four reasons to consider Part-Time Work in Retirement

1. Your Retirement Savings can Last Longer

One of the biggest financial concerns retirees face is outliving their savings.

Imagine two retirees, each with a $500,000 investment portfolio.

The first needs to withdraw $30,000 annually to cover living expenses.

The second has the same expenses but earns $12,000 annually from enjoyable part-time work. That person only needs to withdraw $18,000 from investments.

The difference is substantial.

By withdrawing less money, the second retiree gives their portfolio more opportunity to grow and recover from market downturns.

Over 10 or 20 years, this can meaningfully improve financial security.

The exact outcome depends on investment returns, inflation, taxes, and how long the person continues working.

2. You can Afford more Experiences

Not everyone wants to leave a large inheritance or accumulate the biggest possible investment portfolio.

Some people simply want to enjoy life.

An extra $500 or $1,000 per month could finance travel, restaurant meals, concerts, hobbies, or visits with family.

If your basic expenses are already covered by pensions and investments, part-time income can become discretionary spending money.

You might even create a simple rule: all earnings from your retirement gig go toward experiences rather than necessities.

Imagine paying for an annual vacation entirely with money earned from a hobby you enjoy.

That’s a pretty attractive arrangement.

3. Work provides Purpose and Social Connections

We often underestimate how much our professional lives contribute to our identities.

Work provides routines, challenges, relationships, and a sense of accomplishment.

When people retire, some lose these connections almost overnight.

Suddenly, there’s no workplace to visit, no colleagues to talk to, and no clear reason to get out of the house at a particular time.

For some retirees, that freedom is wonderful. For others, it can eventually lead to boredom, isolation, or a loss of purpose.

Part-time work offers a middle ground.

Retirement also gives us the freedom to explore new social activities and become more involved in our communities. For example, attending live comedy shows is a great way to meet people, enjoy an evening out, and support local performers. Whether through dancing, comedy, or other community activities, staying socially engaged can make retirement more fulfilling.

In my case, teaching dance gives me regular opportunities to interact with people. I meet students, share experiences, laugh, and participate in an active social environment.

I don’t think of those hours as an obligation. They’re an enjoyable part of my life.

The money matters, but the relationships matter just as much.

4. Work can keep your Mind and Body Active

Retirement shouldn’t mean withdrawing from life.

Depending on the activity, part-time work can provide physical movement, mental stimulation, and opportunities to learn new skills.

A retired accountant helping small businesses might enjoy solving financial problems.

A former teacher tutoring students might find satisfaction in watching young people improve.

A retiree working at a garden center might enjoy spending time around plants and other gardening enthusiasts.

As a dance teacher, I have the added benefit of staying physically active while working.

Of course, paid employment isn’t the only way to obtain these benefits. Volunteering, hobbies, community organizations, and family activities can be equally meaningful.

But when enjoyable work provides those benefits and generates income, it becomes especially attractive.

The Best Retirement Job is not necessarily the highest-paying One

During our working years, we often make career decisions based on salary, promotions, and financial obligations.

Retirement gives us the opportunity to change those priorities.

You might accept a lower-paying job because you enjoy the people, the activity, or the flexibility.

A retired executive who once managed hundreds of employees might be perfectly happy working two mornings per week in a bookstore.

Someone who spent decades sitting behind a desk might enjoy walking dogs.

A former engineer might discover that teaching mathematics to teenagers is more satisfying than managing large projects.

The goal is not to maximize income. The goal is to maximize life satisfaction.

That’s an important distinction.

If your retirement job creates stress, damages your health, or prevents you from enjoying your freedom, it may defeat the purpose.

(Affiliate link added by Editor: And if a health setback ever interrupts an income you’ve come to rely on, that’s the gap disability insurance exists to fill.)

Seven Part-time Jobs worth considering in Retirement

Here are some possibilities that can combine modest income with personal satisfaction:

  1. Teaching or tutoring: Share your expertise in languages, mathematics, music, dance, or another subject. My friend Cheryl teaches English as a second language and she loves it.
  2. Pet sitting or dog walking: Spend time with animals while earning additional income and staying active.
  3. Consulting: Offer your professional knowledge to businesses without returning to full-time employment.
  4. Tour guiding: Share your enthusiasm for local history, architecture, or culture with visitors.
  5. Freelance writing or editing: Work from home on a flexible schedule, especially if you enjoy communication.
  6. Gardening or home services: Help neighbors with landscaping, small repairs, or seasonal projects.
  7. Working in a bookstore, museum, or community center: Combine a pleasant environment with regular social interaction.

The possibilities are nearly endless.

You could also turn an existing hobby into a small business, although not every hobby needs to become a source of income.

The most important question is whether you would still enjoy the activity after it becomes a paid responsibility.

How to choose the Right Retirement Gig

Before accepting a part-time job or starting a small business, consider a few questions.

Would I enjoy doing this even if I didn’t need the Money?

This is my favorite test.

If the answer is yes, you’re probably moving in the right direction.

How much Time am I willing to Commit?

For me, 20 hours per week feels comfortable.

For someone else, five hours might be ideal.

There’s no universal answer. Your schedule should leave enough time for everything else you want to experience.

Will the Work Improve my Social Life?

Some jobs provide regular opportunities to interact with others.

Others, such as freelance writing, might involve working alone.

Neither is inherently better. Choose according to your personality and needs.

Will it Create Financial or Administrative Complications?

Additional income can affect taxes, income-tested government benefits, and eligibility for certain programs.

In Canada, for example, employment or self-employment income may affect benefits such as the Guaranteed Income Supplement. Old Age Security recovery tax rules may also matter at higher income levels.

Self-employed retirees should also account for business expenses, applicable pension contributions, and tax obligations.

The financial benefit should be evaluated using after-tax income, not just gross earnings.

Part-time Work can also Reduce Retirement Anxiety

One of the psychological challenges of Retirement is transitioning from accumulating money to spending it.

For decades, we develop the habit of saving.

Then suddenly we’re supposed to start withdrawing from our investments.

Even when the mathematics suggests that we have enough, spending down our savings can feel uncomfortable.

Part-time income can help ease that transition.

Knowing that money continues arriving every month may make it easier to enjoy retirement without constantly worrying about investment balances.

I find that my own earnings provide an additional sense of security, even though my financial plan doesn’t depend on them.

If markets decline, I have some income that doesn’t require selling investments.

That flexibility is valuable.

It doesn’t eliminate investment risk or guarantee financial security, but it creates another layer of protection.

Don’t Postpone Retirement just to keep Earning Money

There’s an important warning here.

I am not suggesting that everyone should continue working indefinitely.

Some people have spent decades doing physically demanding jobs. Others have health problems, caregiving responsibilities, or simply no desire to work anymore.

For them, retirement without employment may be the best possible choice.

And if you already have enough money, there’s no reason to sacrifice your freedom for additional income you don’t need.

The objective is not to turn retirement into another career.

It’s to recognize that work can be one of several enjoyable activities in a fulfilling retirement.

You should feel free to stop whenever the activity no longer brings you satisfaction. Continue Reading…

Theme Investing: Trendy stocks will often lead you into losses

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Theme investing, particularly when snatched from the latest headlines, may seem appealing: but more often than not will lead to poor returns

TSInetwork.ca

Theme investors zero in on something that’s going on in the world — in business, politics, technology or society as a whole — and try to cash in on it, directly or indirectly. You can get lucky with trendy theme investing, but there’s a large element of risk. Interest in the theme may slump sooner than you expected. Or, your enthusiasm for the theme may lead you to drop your guard. It may spur you to put money in stocks or other investments that are drastically over-priced or fundamentally flawed.

Focusing on a theme that’s in the headlines can help you identify potentially high-profit investment and business opportunities. But trying to cash in on a theme is inherently risky.

An example of theme investing in the resource sector

For example, the rising price of gold was a popular investing theme during much of the first decade of this century. As gold rose from under $300 to more than $1,800 per ounce, it presented a wide variety of profit-making opportunities. But the rising price of the metal was no guarantee of profit. Gold-themed investments — collectors’ coins, penny stocks, gold-based futures and options trading — gave promoters lots of ways to create low-quality investments to sell to gold-seeking investors.

Theme investing within the green energy market

Green energy comes from renewable resources like solar power, wind power, geothermal power and generating electricity from ocean waves. Green energy investing has become more popular in the past few years, as concern over the environment has grown.

Green energy can be considered to be an investment theme. However, as with all investment themes, we’ve always recommended that you choose green energy stocks very carefully to profit. That’s because many of these companies have only limited investment appeal.

Investors interested in green energy should know that these firms often need a long time to move from the research or concept stage to profitability. As well, governments often cut subsidies for renewable energy development when they struggle with high budget deficits.

To cut your risk, we recommend that you focus on green energy stocks that already have a sound base of other operations, preferably businesses that provide steady revenue streams. That helps offset the risks of expanding into renewable-power production.

Avoid theme investing in ETFs or mutual funds

If the ETF or mutual fund’s theme seems to be plucked from recent headlines, stay away. It pays to stay out of narrow-focus, faddish funds, all the more so if they’ve come to market when the fad dominates the financial headlines. Good examples are ETFs or other funds that invest in cryptocurrencies or related firms.

Trendy theme funds like these face a double disadvantage because they appeal to impulsive investors who pour in their money just as the fad hits its peak. This forces the manager to pay top prices —  perhaps to bid prices higher than they’d otherwise go — even if this goes against their better judgment. These same investors are also apt to flee when prices hit their lows, forcing the ETF or mutual fund manager to sell at the bottom and lowering the fund’s performance. But when a fad fades, as they all do, the fund’s liquidity dies out with it. The manager may have to dump the fund’s holdings when demand is at its weakest, forcing prices lower than they would otherwise go.

The appeal of theme investing tilts the odds against you in two ways

First, the appeal of hot themes attracts naïve investors. They, in turn, bid up the prices you have to pay to invest.

Second, the excitement surrounding the theme attracts opportunists who simply want to create investments and business ventures that are easy to sell, regardless of their chance of long-term success. This cuts the average quality of available investments. Continue Reading…