tag:blogger.com,1999:blog-5465015914589377788.post3643529451971001917..comments2024-03-20T09:32:16.592-04:00Comments on Michael James on Money: My “Bucket Strategy” for Retirement SpendingMichael Jameshttp://www.blogger.com/profile/10362529610470788243noreply@blogger.comBlogger10125tag:blogger.com,1999:blog-5465015914589377788.post-53733438709383800322021-06-18T19:50:10.953-04:002021-06-18T19:50:10.953-04:00Effective 2020 April 30, CDIC "Extended cover...Effective 2020 April 30, CDIC "Extended coverage of eligible deposits with terms greater than 5 years".Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-56310628885175645062019-05-05T21:49:49.934-04:002019-05-05T21:49:49.934-04:00@Deborah S.: Good point. I plan to reduce the ca...@Deborah S.: Good point. I plan to reduce the cash component to the amount we need to withdraw from the portfolio over 5 years. So, when we reach 70, we'll need less cash due to receiving CPP and OAS. However, 70 is a log way off for us right now.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-45720388035032658232019-05-05T19:38:33.886-04:002019-05-05T19:38:33.886-04:00Will you continue to keep five years' of sendi...Will you continue to keep five years' of sending/expenses in cash once you & your wife begin receiving OAS and CPP? Deborah S.https://www.blogger.com/profile/15078216183644544899noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-72120530499107925252019-04-30T16:47:48.718-04:002019-04-30T16:47:48.718-04:00@Garth: Yes, all calculations are in today's d...@Garth: Yes, all calculations are in today's dollars. The easy way to do this is to use real returns rather than nominal returns. But, you have to be careful to calculate taxes on nominal returns.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-34638259284348276952019-04-30T16:22:16.616-04:002019-04-30T16:22:16.616-04:00Do you do all your calculations in today's dol...Do you do all your calculations in today's dollars? I find it so much easier to relate to.Garthhttps://www.blogger.com/profile/14367654772040176371noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-61955041883131525662019-04-30T14:46:21.779-04:002019-04-30T14:46:21.779-04:00@JB: CDIC won't insure GICs over 5 years, so ...@JB: CDIC won't insure GICs over 5 years, so they are rare. You can find government bonds that mature in longer than 5 years. It's easier to just buy a bond fund if you're happy not exactly matching the duration profile of a ladder. Whatever you settle on, the important thing is to stick to a plan rather than change paths every time stocks soar or crash.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-77364549456620530892019-04-30T14:37:08.519-04:002019-04-30T14:37:08.519-04:00Although I am still about 15 years out from retire...Although I am still about 15 years out from retirement, I plan on a similar strategy. I have constructed a 5 year GIC ladder with 20% maturing each year and the rest in equities. The percentage of investable assets in GICs will increase as I reach my target amount and retirement date.<br /><br />One item that I wonder about is a buffer over the 5 year ladder in case of a prolonged downturn, perhaps a short-term bond fund that fits between the risk/return profile of GICs and equities. If I could find longer-term GICs with better return rates, that could fit the bill as well although they don't seem to be offered with my discount broker.<br /><br />Your thoughts?<br /><br />JBJB Cromwellnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-4107496406156625212019-04-30T13:45:34.244-04:002019-04-30T13:45:34.244-04:00@Garth: A little more detail. What I do is I tak...@Garth: A little more detail. What I do is I take the future CPP and OAS payments, compute a present value, and add that to our portfolio for the purposes of computing a safe spending level.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-29571679025583496772019-04-30T13:43:38.217-04:002019-04-30T13:43:38.217-04:00@Garth: Good questions. My wife and I will both ...@Garth: Good questions. My wife and I will both get CPP and OAS. We plan to delay both for both of us until we're 70. My spreadsheet takes into account these payments and plans for reduced spending from our portfolio after age 70 to compensate. So, we are effectively bridging.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-19832495601557818922019-04-30T13:31:46.477-04:002019-04-30T13:31:46.477-04:00I like the rules based spending, and I like the an...I like the rules based spending, and I like the annual reset based on portfolio value. I assume you also have CPP, OAS, and pension as a base amount that covers the basics? Will you delay collecting? If so, do you have a plan for a bridge to when you do start collecting?Garthhttps://www.blogger.com/profile/14367654772040176371noreply@blogger.com