Updated Retirement Income Guide


When you retire, not only does your daily routine change, but you also stop receiving a pay cheque. With the traditional pension becoming less of a reality for many Canadians, building steady retirement income through your investments, asset base and government programs is a key part of any financial plan.

In our new updated 2015/16 guide, you will learn about some of the best ways to build your own retirement “paycheque” using the resources you already have.

Common questions about different retirement income streams will also be answered, and tax minimizing tips will be provided along the way.

We provide you with some of our best insight on when and how much to draw from RRSPs, RRIFs, TFSAs, investment options, how to access government pensions and where to find other sources of cash flow.

We trust that our new updated guide will be helpful to you. If you have any questions on the ideas and strategies presented or to find out more about our income solutions, please contact us.

To request your free copy of our guide simply click here.

What are alternatives and do they have a place in your portfolio?


Alternative investments are those other than traditional investments such as stocks, bonds or cash. Some of the more common alternative investments strategies include:

  • REIT’s (real estate investment trusts):
    A real estate investment trust (REIT) is a real estate company that offers common shares to the public. Rather than investing directly in a single property, REIT’s typically hold dozens of commercial properties, including office buildings or exposure to real estate sectors such as seniors homes for example. REIT’s offer tax benefits, a portion of the distribution from Canadian REITs is a return of capital, which is not taxed.
  • Hedge Funds:
    A hedge fund has some similarities to a mutual fund, but they are typically structured differently and have access to a broad range of investment strategies. They are open to a limited range of investors and permitted by regulators to undertake a wider range of investment and trading activities than other investment funds.

    The term “hedge fund” has come to be applied to many funds that do not actually hedge their investments, and in particular to funds using short selling and other “hedging” methods to increase rather than reduce risk, with the expectation of increasing returns.

  • Private equity:
    Private equity refers to an asset class consisting of equity and/or debt securities in companies that are not publicly traded on a stock exchange. The fundamental reason for investing in private equity is to improve the risk and reward characteristics of an investment portfolio. Investing in private equity offers the investor the opportunity to generate higher absolute returns whilst improving portfolio diversification.
  • Venture capital:
    Venture capital is money provided to seed, early-stage, emerging and emerging growth companies. The venture capital funds invest in companies in exchange for equity ownership.
  • Wine:
    The wine industry’s growth has been remarkable. In Canada you can buy high quality bottles of wine and store them with the intention to sell later. This takes a lot of money, space and careful timing. An alternative is to buy a wine investment fund. Toronto-based Accilent Capital Management runs one or you can buy stocks in one of Canada’s many wine companies.
  • Art and antiques:
    Most of us have dabbled in this when buying décor and furniture for our homes, but few of us have made money. To successfully invest in antiques and art, you typically should have an interest in them or better still consult and /or partner with experts.

This largely unknown sector of alternative investments is growing rapidly for a variety of reasons, but primarily the ability offered to access good investments that are largely uncorrelated to traditional stock and bond markets. In fact hedge funds have benefited wealthy and institutional investment portfolios for many years with total portfolio exposure as high as 30 & 40%, so why not individual investors? Regulations have limited access given the many complex structures and potential risk although many options may actually reduce risk and certainly provide diversification.

With the mature S&P 500 bull market, portfolio managers are looking to supplement portfolios with alternative investments for long-term growth.

Bond markets also have elevated risk given the prospect of rising interest rates. This would suggest lowering bond exposure in favor of investments not subject to this risk such as multi-strategy hedge funds, real estate and private equity. These alternatives have historically produced returns that don’t correlate to traditional stock and bond markets and this added diversification will enable less volatile portfolios that should also deliver solid growth.

TriDelta’s investment product lineup includes a hedge fund, the TriDelta High Income Balanced Fund, which was launched in late 2013. Our hedge fund was however only available to ‘accredited investors’ until recently when regulations in Ontario and other Canadian provinces were amended.

At TriDelta our view is that new investment asset classes are always worth reviewing. If we find something that we are comfortable with, we will incorporate it into our overall recommendations. Now that regulatory changes have come about we’re also able to offer some of these solutions to non-accredited investors as well.

Strategies we have researched and analyzed include real estate funds, mortgages, business lending and factoring.

One common theme to alternative investments is that they often have low correlations to traditional investments such as stocks and bonds. This benefits portfolios by increasing diversification. Research has revealed that many large institutional funds such as pensions and private endowments have begun to allocate meaningful amounts of their portfolios to alternative investments such as hedge funds.

Alternative investments includes a vast category of specialist investment solutions and many we feel are simply not appropriate for the average investor. There are however a few very interesting solutions that deliver some unique advantages and better still are largely uncorrelated to traditional stock and bond investments.

Investments in real estate, mortgages, hedge funds, infrastructure, private debt and equity, and the like, continue to grow as a percentage of overall assets for some of the biggest pension funds. They comprise of over 30% of the overall portfolio at pension plans, such as the Ontario Teacher’s Plan (OTTP), Harvard Endowment Fund and the Canadian Pension Plan Investment Board (CPPIB), which manages the funds for CPP payments.

At TriDelta we spend much time reviewing market offerings and TIC (TriDelta Investment Counsel) works with a select group of alternative investment managers to provide similar benefits to our clients.

Alternative investments make up over 40% of US university endowment portfolios

The reasons for their growth are that these investments often provide:

  • a more predictable income stream
  • less volatility
  • reduce risk in your investment portfolios.
What are the main benefits to hedge fund investment?


Canadian high net worth portfolios, endowments and pension funds have also embraced alternative investment in recent years.


‘Ontario Teacher’s Pension plan asset allocation’ 32% Real assets and ‘alternative’ solutions; 35% Equities & 33% Fixed Income.


At TriDelta we believe select alternative investments play a key role in delivering more predictable and consistent returns for many of our clients.


Anton Tucker
Written By:
Anton Tucker, CFP, FMA, CIM, FCSI
Executive VP and Portfolio Manager
(905) 330-7448

How will your Retirement be affected by a Divorce?


There is a rising trend in Divorce after 50. Ending a marriage is one of the largest life events that can happen in a person’s life. You may have tried to make things work, but now it’s clear, the marriage is over. What do you do next? How do you ensure you will be OK financially? How will this affect your retirement plans? Knowing your options and how the Divorce will affect you is key. The first steps are:

  1. Gather financial documents and know your financial picture.

Make sure you know where all your financial and legal documents are, including pension statements. Having important documents on hand in the divorce process means you avoid time and expense trying to get copies of them later. Know what assets are shared and which are exempt.  

Did you know if you inherit money or receive a gift during the marriage (in most provinces) as long as it is kept in a separate account it does not have to be shared in a divorce. Once it is used to pay down the mortgage on a family home or put in a joint account, it will be considered the property of both spouses.

  1. Assess your credit.

Request a copy of your credit report, and correct any misinformation it contains. Good credit is the foundation of your financial future, so watch it carefully! Without credit it can be near impossible to obtain loans for any purpose, or even to manage the expenses of running your household.

  1. Open accounts in your own name.

You will need your own bank accounts and credit cards. It is not too soon to set these up. Use a different bank than where you currently have joint accounts, and open both savings and checking accounts in your name alone.

  1. Assemble a professional divorce team.

Today, financial portfolios –and the regulations that govern them –are much more complex, and you may need multiple layer of professional help to navigate all the legal and financial details.

  1. Be watchful.

No matter how much you may think you know someone, it is still very common for assets and/or income during divorce to be hidden –even though that’s underhanded, unethical and illegal.

It is common for one person to know more about the family finances than the other and one may not know the extent of their debts.

Resolve to get the help you need to start down the path toward your secure financial future.

For couples over 50 divorcing, generally the 2 largest assets are the house and pension. Splitting assets 50/50 may not result in the same financial picture now that is does in retirement. The goal is for both parties to come out equally and to keep income steady, so that retirement lifestyle is not negatively impacted by a divorce.

Knowing how your pension and your future monthly retirement income is affected by different asset splitting options is important. There are many ways to legally divide assets, to ensure both current and future financial needs are met.

It is a good idea to consult a financial professional as well as a lawyer if you are going through a divorce.

Your lawyer will focus on the legal issues and a planner can provide you a summary of the short, medium and long term implications of the proposed division of assets, including tax implications.

Additionally common-law relationships come with their own set of rules.

A CDFA – Certified Divorce Financial Analyst can assist you in getting the help you need to start down the path toward your secure financial future, giving you a better understanding of your financial situation.

Contact Heather for a no obligation review of your financial situation.

Lorne Zeiler
Written By:
Heather Holjivac
Senior Wealth Advisor

Should I take CPP before age 65?


Two thirds of Canadians take their CPP benefits before age 65, but determining what’s best for you demands that you better understand your options. First let’s consider the rules around taking CPP – which changed January 1, 2012. The chart below from provides a nice summary.


You can start collecting CPP (Canada Pension Plan) any time after age 60, but this will result in a reduced amount based on how many months prior to age 65 you are when you begin collecting. Given this reduction, part of answering the question on whether or not to take CPP early will involve crunching some numbers. Our new ‘Early CPP Calculator’ can help, and is found in the Resources section of our website.

Understanding how much CPP you may be entitled to is an important first step, but is not the only variable to consider. Other factors to consider include:

  1. Cash flow. If you need the funds in order to pursue interests while you’re still healthy, this would likely trump any other factor.
  2. Poor health. This likely means that you will have a shorter life expectancy than average and as a result you should start drawing CPP earlier.
  3. Excellent health and longevity in the family. This would suggest you consider delaying the start of your CPP payments because you’ll collect more over time if you live a long life.
  4. Tax implications. Taking CPP increases your taxable income and may affect your decision on when to take it (OAS, GIS thresholds).

The most difficult variable of course is not knowing when you will die. For this reason, outside of a few scenarios that may strongly suggest certain action, the CPP decision will always remain a calculated guess. A personal financial plan can help identify how CPP should fit within a broader retirement income strategy. For more information on CPP visit the Service Canada website.

Lorne Zeiler
Written By:
Brad Mol, CFP, CIWM, FMA
VP, Wealth Advisor

Why you probably shouldn’t ever want to own a cottage



As you are reading this on what is hopefully a beautifully sunny and warm day, sitting on your dock on the water, what could be better than being at your cottage.

There is no question of how nice it can be, but do you really have to own it to enjoy it?

Occasionally clients ask our view on buying a cottage. This question usually leads to a broad discussion where the financial equation is only one part of the picture. Their stage of life, kids’ ages, desire to explore or stay put, comfort with property maintenance, and even their experiences growing up, play a big part in deciding whether to buy or not.
For me, I am pretty certain at this stage of life (with three school-aged children), we are not cottage buyers. I know that not everyone will agree with this opinion, but I know it is the right decision for me and my family. Here are five reasons why I won’t buy a cottage.

  1. Trying to juggle the summer plans of our kids leaves only two to four weeks of possible time the kids could be at the cottage each summer. At a different stage in life, cottage ownership could make more sense.
  1. We want the freedom to explore different parts of Canada in the summer (maybe even beyond Canada), and don’t want to feel that we are tied to one location. In addition, we can rent a cottage that is ideal for the age and stage of our kids — both in terms of water safety, and with an eye to places to visit within an hour of the cottage.
  2. I can’t fix anything myself. My wife is pretty good at it, but neither of us wants to spend our time away working on the property or even feeling guilty about what needs to be done. We want to enjoy it.
  3. Financially, there are better investments. Over the last 35 years, residential real estate in Canada has averaged a gain of 5.4 per cent annually. Over the same period, North American stock markets have averaged 10 per cent returns or more. If the growth is tax free on a personal residence, then the gap is smaller, but for a cottage there are usually capital gains taxes to deal with. For those who talk about needing to deduct investment management fees from returns, that can be true, but you would also need to deduct real estate taxes and non-capital expenses from the return on the cottage. Looking at the options, I would rather not lock up my capital in a cottage.
  4. Finally, no more freeloading friends and family to worry about. I know that many families love to invite people up to their cottage. It is often greatly appreciated. However, it can get very tiring after a while, and when it isn’t greatly appreciated, it can become a real weight on the relationship. When renting, you can occasionally invite people to join you, but they know not to expect the annual invite.

Reproduced from the National Post newspaper article 31st July 2015.

Ted Rechtshaffen
Written By:
Ted Rechtshaffen, MBA, CFP
President and CEO
(416) 733-3292 x 221

How the Bank of Canada’s rate cut may have added $100,000 to your pension in one day


When the Bank of Canada lowered the overnight interest rate by 0.25% this week, the obvious benefit is for those with variable rate mortgages. They will see an immediate benefit in lower interest payments on their mortgage.

Another group who just received a big win may not even realize it: If you have a pension plan, and especially if you have ever thought about taking the cash value of your plan, you just saw an increase in potential value. In some cases, the rate cut could have added as much as $100,000 in wealth in one day. This option to ‘take the cash’ is usually open to those who are retiring or leaving their employer. Sometimes the option ends when the employee turns 50 or 55.

To understand how this wealth boost works, and how much your wealth could go up, can get a little complicated. The best way to explain it is to pretend that you want $50,000 of income per year and go from there.

You could buy a GIC to pay out $50,000 of income per year, and depending on the interest rate of the GIC, you could determine how much you need to invest: At 10 per cent interest, you could buy a $500,000 GIC. At one per cent interest, you would need to put in $5 million for the same return.

In the pension plan example, if they are committed to paying you $50,000 a year, then at today’s super low interest rates, your pension plan must set aside a lot more money to cover off $50,000 a year — just like the GIC example. Here is where your wealth potentially just grew:  In many cases, you have the ability to ask your pension plan for this lump sum of money (often called the commuted value), rather than taking the pension as a monthly payment.

Below is a chart for the Bank of Canada Five-Year Bond Yield over the past 26 years. The highest yield was 11.6 per cent, in March 1990. The lowest yield happened this week at 0.7 per cent.


Imagine this chart represented an opportunity to lock in a lifetime rate for a loan. If you could choose any time to lock it in, this week would be the best time.

A commuted value of a pension works the same way. You are essentially locking in a value for life, and an important determinant of that value is interest rates.

Put another way, if you were ever going to take the commuted value of your pension, now would be one of the best times in history to do so.

For those who like the idea of a monthly payment guaranteed for life, you can purchase a pension any time by buying an annuity. Having said that, in many ways, at today’s low interest rates, now is perhaps the worst time to purchase an annuity.

One potential strategy is to take the commuted value of your pension today, when you would receive the largest amount. In a few years, if interest rates rise meaningfully, you can take your funds and buy an annuity that will pay you a higher monthly amount than you would ever have had with your existing pension.

The decision of whether to receive a pension in monthly amounts for life as opposed to taking a lump sum is a complicated matter. What I would suggest is that your pension plan does NOT want you to take a commuted value lump sum today. It will cost them too much.  Based simply on that, you may want to take a good look at whether that option is open to you, and whether you might want to take it.

Reproduced from the National Post newspaper article 17th July 2015.

Ted Rechtshaffen
Written By:
Ted Rechtshaffen, MBA, CFP
President and CEO
(416) 733-3292 x 221