EP # 197 | The Honest Truth About One-Time Retirement Plans

Last week we touched on three things you should do when markets drop. This week is the flip side: the one mistake that does more damage than all the rest put together. If you get this wrong, it can quietly undo years of good planning in a single scared afternoon. Joe is recording this while things are calm, on purpose, so it is ready for you when markets eventually get bumpy. The flight to safety - getting scared and abandoning your plan to run to cash the moment things look bad - is completely natural. It is wired right into us. And it never feels like a mistake when you are doing it. It feels smart, responsible, and prudent. Joe walks through three true stories from COVID, the years after 2008, and 2022, to show how the same mistake shows up in different "clothing" every time, and what it actually costs the people who make it.

Right now, markets are calm. And that is exactly the right time to talk about what to do when they are not. When markets drop, almost everything your gut is telling you to do is the exact opposite of what you should actually do. This episode is your fire drill - so you know where the exits are long before the building fills with smoke. A market downturn hits differently when you are retired or close to it. You are not just watching a number drop on a screen - you might be pulling income out of that same portfolio at the same time it is going down. That fear is real, and scared is exactly when people make their worst decisions with money. Joe walks through three specific, ordered steps to take when markets fall, so your calm clear-headed self can write the instructions your scared future self will actually follow.

Most people have one date circled for their Registered Retirement Savings Plan (RRSP) - the year they turn 71. The year when it has to convert to a Registered Retirement Income Fund (RRIF). The plan is simple - just don't touch it until you have to. But there is a move available at 65 that most people walk right past. And missing it can mean paying more tax than necessary every year between 65 and 71. When money comes out of a RRIF, it becomes eligible pension income. That unlocks two things your RRSP cannot offer: income splitting with your spouse, and the pension income tax credit. You don't have to move your whole RRSP, and the decision is flexible and reversible up until the end of the year you turn 71. Joe walks through why 65 is the date that matters, how this applies to couples bridging the gap before Canada Pension Plan (CPP) and Old Age Security (OAS) kick in, what the pension credit actually does and does not do, and who this move does not make sense for.

"My pension pays $4,000 a month for life." "I've got a million and a half in GICs and I'll live on $100,000 a year for the next 20 years." Both statements are said with real relief - and both people might be taking on a lot more risk than they realize. Today Joe explains why guaranteed is not the same as protected, and what to check so your income still holds up at 85. Most people plan retirement in today's dollars. They look at what they spend now, match it to money that feels secure, and call it done. It looks great at 65. But prices go up every year, and if you are retired for 30 or 40 years, the gap between what your income guarantees and what it actually buys can be enormous. Joe walks through how each common income source handles inflation, what a GIC really guarantees, why retirement lasts longer than most people plan for, and what your portfolio needs to do to fill the rest.

For 40 years, your paycheque just showed up. Then you retire, and suddenly you are sitting on the biggest amount of money you have ever had with no paycheque coming in. A lot of good savers freeze. They are scared to touch it, and they end up living much smaller than they can afford in the exact years they were saving for. There is one thing that fixes this, and you can start building it this week. The retirement income timeline is a single page that shows you exactly where your paycheque is going to come from in retirement, year by year, and whether it is going to hold up. Joe walks through what it looks like, how to build one, and why the process of mapping it out is often the moment the fear finally has somewhere to go, not because the numbers changed, but because you can finally see them.