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Secrets of Successful Wealth Management: 9 steps to the life you've always wanted, before and after retirement.

Topic: Wealth Management

Consider all of your retirement investment management options for a financially sound future

retirement investment strategies

Here’s a look at some of your best retirement investment management options and choices. These include pensions, RRSPs, RRIFs and more.

Your retirement investment management plan should build in contingencies for long-term medical needs and supplemental health insurance. As well, you should factor in caring for loved ones who are unable to take care of themselves.

When you work out a plan for your retirement, make sure that you aren’t basing your future income on overly-optimistic calculations that will end up leaving you short. Retirement income can come from many different sources, such as personal savings, Canada Pension Plan, Old Age Security, company pensions, RRSPs, RRIFs, and other types of investment accounts.

Learn how your retirement investment management works in a Canada Pension Plan (CPP)

The Canada Pension Plan, or CPP, is the name for the Canadian national social insurance program. The program pays out based on contributions, and it provides income protection for individuals or their survivors in the instance of retirement, disability or death. Since 1999, the CPP has been legally permitted to invest in the stock market.

Nearly all individuals working in Canada contribute to the CPP, unless they live in Quebec, where the Quebec Pension Plan (QPP) exists and provides comparable benefits.

Applicants can apply to receive full CPP benefits at age 65. The CPP can be received as early as age 60 at a reduced rate. It can also be received as late as age 70, at an increased rate.

Invest in your Financial Future for FREE

Learn everything you need to know in '9 Secrets of Successful Wealth Management' for FREE from The Successful Investor.

Secrets of Successful Wealth Management: 9 steps to the life you've always wanted, before and after retirement.

Here’s a look at some of the pensions or benefits provided by the Canada Pension Plan:

  • Retirement pension
  • Post-retirement pension
  • Death benefit
  • Child rearing provision
  • Credit splitting for divorced or separated couples
  • Survivor benefits
  • Pension sharing
  • Disability benefits

Use a Registered Retirement Savings Plan (RRSP) as a starting place when you look into retirement investment management

An RRSP is a great way for investors to cut their tax bills and make more money from their retirement investing.

RRSPs were introduced by the federal government in 1957 to encourage Canadians to save for retirement. Before RRSPs, only individuals who belonged to employer-sponsored registered pension plans could deduct pension contributions from their taxable income.

RRSPs are a form of tax-deferred savings plan. They are a little like other investment accounts, except for their tax treatment. RRSP contributions are tax deductible, and the investments grow tax-free.

You might think of investment gains in an RRSP as a double profit. Instead of paying up to, say,  50% of your profit to the government in taxes and keeping 50% to work for you, you keep 100% of your profit working for you, until you take it out.

Convert an RRSP to a RRIF to create one of the best investments for retirement

A Registered Retirement Income Fund (RRIF) is another good long-term investing strategy for retirement.

Converting your RRSP to a RRIF is clearly one of the best of three alternatives at age 71. That’s because RRIFs offer more flexibility and tax savings than annuities or a lump-sum withdrawal (which in most cases is a poor retirement investing option, since you’ll be taxed on the entire amount in that year as ordinary income).

Like an RRSP, a RRIF can hold a range of investments. You don’t need to sell your RRSP holdings when you convert—you just transfer them to your RRIF.

When you hold a RRIF, you must withdraw a minimum each year and report that amount for tax purposes. (You may withdraw amounts above the minimum at any time.) Revenue Canada sets your minimum withdrawal for each year according to a schedule that starts at 5.28% of the RRIF’s year-end value for the year you turn 71; that rate reaches 6.82% at age 80, and levels off at 20% for the year you turn 95 and all years after that.

If you have one or more RRSPs, you’ll have to wind them up at the end of the year in which you turn 71.

Stick with conservative estimates to account for unforeseen setbacks in your retirement investment management

As for the return you expect from investing for retirement, it’s best to aim low. If you invest in bonds, assume you will earn the current yield; don’t assume you can make money trading in bonds.

Over long periods, the total return on a well-diversified portfolio of high-quality stocks runs to as much as 10%, or around 7.5% after inflation. Aim lower in your retirement planning—5% a year, say, to allow for unforeseeable problems and setbacks.

Above all, it’s important to remember that while finances are important, the happiest retirees are those who stay busy. You can do that with travel, golf or sailing. But volunteering, or working part-time at something you enjoy, can work just as well.

Use our three-part Successful Investor approach to find profits in your retirement investment management activities

  1. Hold mostly high-quality, dividend-paying stocks.
  2. Spread your money out across most if not all of the five main economic sectors: Manufacturing & Industry, Resources & Commodities, Consumer, Finance and Utilities.
  3. Downplay or stay out of stocks in the broker/media limelight.

What are your biggest sources of retirement income?

How are you planning to manage your retirement investments?


  • John Everard 

    I worked all my life in Christian ministry so my salary was good but did not give me a lot to put into savings. I did manage to contribute the maximum to my RRSP. I didn’t start until I was 43 but I still did well. The one regret I have is that I did not save anything outside my RRSP (there was no TFSA at that time). So now I have to take the maximum amount out of my RIF and LIF every year for our expenses and that is taxed at a higher rate. If I had it to do over again I would buy some investments outside the RRSP to create a modest portfolio that today would be available to me and not be taxed like my RIF payments. Luckily my wife and I have enough with CPP, OAP, and our RIF payments to have more than adequate income.

  • Ronald 

    I was only able to contribute to a RRSP for three years but I am not complaining. I have found that my dad’s advice was right and that a RRSP is only tax deferred and not tax saved as when you turn it into a RRIF and then have to take part of it out it is classified as interest income and is fully taxed. I started young and most of my investments are outside and I have been paying the tax as I go and it has accumulated so now I receive a large dividend tax credit. I agree that the way to go is solid companies and not the new tech companies everyone seems to be touting as I am an investor and not a speculator.

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