Given that the financial media has long spent an inordinate amount of space on the topic of retirement, it seems the time was right for a retirement club devoted to Canadians on or near the cusp of retirement.
A few months ago, the Retirement Club for Canadians was launched by occasional MoneySense contributor Dale Roberts and a partner, Brent Schmidt of Strategic Fuel. Roberts, who once was a financial advisor for Tangerine Bank, is known for his Cutthecrapinvesting blog and his contributions to Seeking Alpha.
While I have no financial or business interest in the club, I did become a member. Monthly Zoom calls feature guest experts who present educational segments, which members can query and discuss. Topics include how to use retirement cash-flow calculators, building portfolios to match the plan, managing risk, the 4% withdrawal rule, how to best use different account types, RRSP-to-RRIF conversions, exchange-traded funds (ETFs), asset allocation in the age of Trump 2.0 and many other topics this Retired Money column often tackles. Club members also exchange views on softer lifestyle issues like how to create a retirement life plan and prepare for a life stage filled with vitality, pleasure and purpose.
You can find Roberts’ own announcement of the club—which charges an annual fee of $250—posted on my own site in mid-April. (It charges HST, but the total expense may qualify as an investment counsel fee deductible on your income tax return. As always, check with your financial advisor or accountant.) Asked to distill the club’s mission into one sentence, Roberts says it “would be moving retirees from a feeling of uncertainty to certainty. A retiree’s greatest fear is often the concern that they will outlast their money.”
The retirement cash-flow calculators help club members discover how to use their RRSP/RRIF/LIF, TFSA, corporate and taxable accounts in concert with company pensions, Canada Pension Plan (CPP) and Old Age Security (OAS), and other income sources. The calculators help retirees determine when to draw income from each account, and the rate of spending from each, the goal being to create the most generous and durable spending plan. Right now, club members are testing and reviewing most of the major retirement calculators available in the Canadian market.
Delaying government pensions
As you’d expect, the club regularly addresses the major chestnuts of personal finance as they relate to those within hailing distance of retirement. The most common retirement hack espoused by the club is to delay receipt of CPP and OAS past the traditional retirement age of 65 to allow for more generous payouts at age 70. Most club members lean toward taking these benefits as late as possible, but of course personal circumstances may dictate earlier start dates.
To bridge the income gap (from age 60 to 70, for example), RRSP/RRIF accounts will be harvested in quick fashion. This move is often termed an “RRSP meltdown.” TFSAs and taxable accounts can also be tapped to provide necessary funding as retirees delay receipt of those CPP and OAS benefits.
Of course, every situation is unique. Roberts describes a retirement cash-flow plan as “a dance where spending levels for certain accounts will increase and decrease over time.” Some accounts, such as TFSAs, may not be used for income at all; instead, members might continue funding TFSAs in retirement as part of tax-efficient estate planning. The TFSA can be transferred tax-free to beneficiaries. The club also discusses how life plans should drive spending plans.
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The DIY retirement demographic
After entering the club’s site, my initial impression was the ironic one that the club seems to involve a lot of work for someone who describes himself as semi-retired. But that seems to be par for the course for financial writers approaching retirement. I’m in a similar boat, as is the American blogger Fritz Gilbert, who recently announced the similarly ironic fact that he was retiring from full-time blogging about retirement.
Asked about the workload, Roberts admits it’s currently a “full-time job. But it’s not work, but a passion.” He left a lucrative advertising career (where he was a writer and creative director) in 2013 to move to Tangerine, but “I always said if I could find someone to pay me to talk about investments all day, I’m there.”
In a regular email update to club members, Roberts explains that “the key concern of Retirement Clubbers is financial security and how to use their portfolio assets in the most efficient and cost-effective manner. That’s why we have a master list of retirement calculators (free and pay-for-service) to test.”
In his introductory blog flagged above, Roberts wrote that many in his audience are self-directed investors. That jibes with Cutthecrapinvesting’s ongoing campaign against high-fee investment funds, in favour of low-cost index funds or ETFs purchased at discount brokerages. While some, like myself, may also use the services of a fee-for-service advisor, many DIY retirees are in effect running their own pension plans.
In theory, one of those much-written-about all-in-one asset-allocation ETFs can do much of the heavy lifting for such investors. However, in practice, there’s a fair bit of anxiety about markets, the Canadian government’s often-changing rules around TFSAs, RRIFs and other vehicles, what effective asset allocation means, the ongoing Trump trade war and much more. So it makes sense for a community to gather in one place and exchange views with others going through a similar process.
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Learning from the peer group
In addition to monthly Zoom calls and newsletters, Retirement Club also has a secure and private online community space, which Roberts likens to “our private island. It’s where we learn, share and chat.” In-depth retirement content is also present there, as members add their own thoughts on content, create their own posts and tag and converse with other community members.
Roberts says the long-term goal is to make the community space the meeting hub for self-directed Canadian retirees, ultimately with many thousands of members. “There is strength in numbers as members have the experience of having lived the challenges of retirement life and on the portfolio front. This real-life experience is priceless.”
Certainly, the Zoom calls cover a lot of ground in just over an hour. Members can chat or post questions to Roberts and Schmidt. There are also breakout sessions where members can pair off and interact. In a Zoom session I attended in May, topics addressed covered annuities, philanthropic giving, sequence risk, the Retirement Risk Zone and defensive stocks (more on those below). There is also interest in unique financial vehicles like the Purpose Longevity Fund.
All-in-one or balanced asset allocation ETFs are often discussed, whether from BlackRock, BMO, Harvest, Vanguard or other suppliers. Roberts considers “balanced growth” to be the sweet spot for most retirees, but even with the classic 60/40 stocks/bonds mix he prefers to layer on inflation fighters like commodities, real estate investment trusts (REITs) or REIT ETFs, gold and even bitcoin. He’s also a big fan of ETFs that hold a mixture of such inflation hedges, notably Purpose Real Asset Fund (PRA).
Roberts was one of the first writers to champion bitcoin in MoneySense (I may have been the second). He is cautious about holding more than 3% bitcoin in an RRSP, but discloses that in his personal TFSA, he holds a whopping 25%. That’s a hedge against bitcoin’s achieving a spectacular long-term return, which would ultimately be partly taxed if in an RRSP but is totally tax-free in a TFSA. However, he eschews other types of crypto, even Ethereum. He also likes low-volatility ETFs from firms like BMO.
If you browse through the site, it can be a bit overwhelming. I’ve heard it said that the wealth accumulation process most Canadians go through in their first decades of saving for retirement is relatively simple compared to the decumulation years once a portfolio has to be tapped to generate regular income. Once on the site, you can check out such links as “How much to save for Retirement” or “Derisking strategy.” It’s nice to have such expertise at your fingertips and to be able to find others in a similar stage who can help you benefit from what they have learned.
Defensive investing for Trump’s tariff wars
One of the most popular topics in the club is defensive investing for retirees in light of the Trump tariffs and the global trade war the U.S. president has ignited. Roberts regularly champions defensive consumer staples, utilities and health-care stocks, either individually or through ETFs. An excellent Cutthecrapinvesting blog I republished on my own site early in June was this one, titled Taking on Tariffs with Defensive Stocks & Sector ETFs.
In my own family’s portfolios, I’d previously incorporated some of Roberts’s ideas for defensive sectors, but this article convinced me to also try some low-volatility ETFs, most of which are also overweight those three sectors. Those plus his inflation fighters have held up well since the so-called Liberation Day early in April, as they have in previous meltdowns, all quantified in the Cutthecrapinvesting blog.
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Read more Retired Money columns:
- How to allocate a RRIF for secure income in retirement
- Canadian seniors, watch out for these scams
- Why “unretirement” may be the fate of so many Canadians
- How RRIF withdrawals work when you have multiple registered accounts
The post Retirement planning advice for people who don’t use an advisor appeared first on MoneySense.