Weekend Reading – Vanguard recommends 40/60 portfolios, do you follow along?
Hey Investors!
Welcome to a new Weekend Reading edition on some interesting Vanguard news of late, they are suggesting investors consider a 40/60 portfolio asset mix for the years ahead. Should you follow along?
My take on that soon but here are some recent reads on my site in case you have missed them:
Last weekend I wrote about our HUGE 2025 returns, my goodness!
I also posted our final 2025 dividend income update including our current asset mix:
Weekend Reading – Vanguard recommends 40/60 portfolios, do you follow along?
A recent article and video on this subject caught my eye.
While Vanguard has long since been an advocate of lazy, passive investing portfolio structure (even though they have lots of ETFs that are actively managed), they’ve recently flipped the script on that stance – suggesting any existing pension-like mix of 60% equity and 40% fixed income could be inversed for the years ahead. That’s what they are doing for their time-varying portfolios anyhow.
The main reasons behind that reside in their forecasts/models – market fundamentals don’t support any current benefits of equity risk taking.
Vanguard expects investors in the short-term to realize returns from high-quality (both taxable and municipal) domestic and foreign bonds to be similar to the performance of U.S. equities — about 4% to 5% — which begs a question from them when it comes to a bias of stocks: why take the equity risk?
Furthermore, Vanguard expects non-U.S. stocks (i.e., see Canada, see international assets) to outperform U.S. high-flying tech and other stocks over the next decade. You might recall Canadian stocks surged in 2025. Maybe a trend??
To use their words I read in other articles beyond the video above, this a bit of a “tectonic shift” for Vanguard for the next few investing years…
So, the question I have is: will they be right?
As we all know by now, the batch of MAG 7 / Magnificent Seven tech stocks basically run the show for the S&P 500. Sure, gains can come from elsewhere but the U.S. market is a 30%+ tech market now and growing. Many analysts and experts continue to suggest the S&P 500 is increasingly overvalued. I’ve heard this for some time. I heard this in late-2024 only to see the S&P 500 soar in 2025. I’m glad I was along for the ride.
I can appreciate if you’re a retiree, you might not need major growth so you don’t have 100% stocks or even 90% stocks in your portfolio. You might be more concerned with asset preservation.
I know when it comes to our portfolio, we’re still heavily invested in stocks – maybe moreso than most retirees (?) entering retirement. At the time of this post, we’re still about 90% equities and 10% cash/cash equivalents. We’ve been that way for most of 2025 and it is my hope we will remain mostly that way in 2026, give or take a few %.
Rightly or wrongly for some experts who dislike dividends and distribution income, we’ve structured our portfolio within this 90% equities allocation with almost an equal mix of dividend stocks and equity ETFs for growth. Yes, equity markets can and will likely suffer bad times in the coming years. Meaning, markets will go up and down with time in big ways. I expect that. We just don’t know when that will happen nor by how much. Neither does Vanguard but they have more comprehensive models to predict these things than I do!
It is my hope that we can largely live off the cashflow from our portfolio in the next few years without selling too many equities at all – although some strategic selling of some stocks for capital gains, etc. may occur.
In this regard, for us, it’s not about chasing returns. We will get what we get.
Rather, we feel our mix of Canadian dividend stocks along with some equity ETFs should provide an essential balance: income today + some potential (although it may be lower) growth.
Reference: Our December 2025 Dividend Income Update.
It’s typically quite normal to “pull back” on equity holdings as retirement nears. I’ve met and talked to a number of DIY investors over the years that have done that. Many subscribers visit my site have done so too.
But instead of dialing back we’re staying the course. We have not shifted our assets to a portfolio with significantly less equities even though Vanguard may suggest we should since there is no real advantage to be had beyond 60/40 near-term.
Time will tell if we made the right decision, I’m flat-out wrong, and Vanguard is right on the future or vice-versa. I will keep you posted. 🙂
More Weekend Reading – Vanguard recommends 40/60 portfolios, do you follow along?
From my older but goodie file, this was how the former chief actuary at Morneau Shepell (Fred Vettese) used to invest. I can appreciate this article (subscription) is quite dated but his rationale was very rational as a financial expert:
“About 70 per cent of my investments are in equities and 30 per cent in fixed income. I wanted to be 60-40 a year ago, but there was no place to invest.” At the time he put 1/3 of his equities in Canada, just over 1/3 in U.S. equities and the rest in international equities.
Fred has published a number of great investing books. You can visit a few on my site here below:
And…
The Essential Retirement Guide
I made some new fun predictions over at Canadian Money Forum, a site I visit now and again to banter with other like-minded DIY investors – folks who have realized financial independence or are on their way. Here are my predictions for 2026. I’m cautious on growth this year!! (Best-case mid single-digit growth.)
S&P500: 7480
TSX: 34125
GOLD: 4920
OIL: 66
CAD: 0.76
Thoughts?
Dividend Growth Investor shared a list of U.S. Dividend Champions for 2026. Do you own any?
Ben Carlson at A Wealth of Common Sense shared the probability of loss in the stock market.
One of the many interesting charts from his post:
I’ve always liked this simple advice on stocks from Ben Graham, Warren Buffett’s mentor.
“The individual investor should act consistently as an investor and not as a speculator.” — Ben Graham.
Reference: The Intelligent Investor, via Revised Version, Commentary by Jason Zweig.
Have a great weekend!
Mark
I didn’t know Vanguard had a magic ball! I guess there’s a 50/50 chance they are right. I built my cash wedge to make sure corp dividends are covered along with the RRSP meltdown withdrawals. It happens to land me at about 80/20. I have no idea what to expect. I thought last year wouldn’t be great so what do I know? It’s possible the US shenanigans could lead to a market crash or it could keep going up. I haven’t sold all my US because I’m diversified regionally and by sector. Most of my CAD is stock selection (standard widow and orphan payers along with some lower dividend payers with more room to increase the annual dividend payment). No one likes to see their portfolio drop, but if it happens I hope to leverage it to extract more from corp/RRSP and let it grow in my TFSA/non reg. I see it as an opportunity to expedite my meltdown and grow in a tax favourable account. Gotta look on the bright side, right??
Ha, you are probably right. Again, they have a few dozen very big brains at Vanguard doing this modelling work but my gut always says who really, really knows?? I don’t recall them saying the Canadian stock market would return 30% last year in 2025, but it did of course for those that invested in many CDN stocks or an CDN ETF like XIU, XIC, VCN, ZCN, etc.
As you know from my posts, I’m “done” with all U.S. individual stocks now and into a low-cost ETF for that ex-Canada investing to diversify – so I will get what I get from that ETF. The rest of my portfolio is in CDN stocks and cash/cash equivalents.
My plan (soon) is to start taking a salary from my corporation in 2026. Need to get that out for some living expenses this year.
Otherwise, beyond TFSA maxed out which I will write about at some point, no big investing changes planned.
Cheers!
I only have Canadian stocks as well – mostly by looking at what’s in the TSX ETFs and picking and choosing when they have a bad day. I also have a broad-based Canadian ETF so I catch lift from Shopify and the like (non dividend payers), if they happen to do well.
Out of curiosity, I looked up the Vanguard forecast one year ago: https://corporate.vanguard.com/content/corporatesite/us/en/corp/articles/investment-economic-outlook-jan-2025.html
as well as a PDF with some of their predictions and suggestions. It was a bit wishy-washy, but they were pushing people to buy bonds and be split 50/50. Yikes! They felt the US equities were already at their limit so didn’t expect it to go much higher.
“Elevated interest rates and high starting equity valuations continue to imply a narrow equity risk premium. As such, our TVAA is underweight equity and overweight fixed income relative to a 50/50 bond benchmark. ”
So there you go! It will be funny to pin this post and look next year at this time to find out if they were right. A broken clock is still right twice a day. 🙂
I’m very glad last year I was in 90/10 vs. 50/50 mix of equal stocks and fixed income. No question about it!
Vanguard folks also have to put food on the table – very smart minds but they cannot predict the future much better than anyone else. Just the facts. Thanks for the share.
For 2026, I will stick with my plans: banks, pipes, utilities, some O&G + some Brookfield as Canadian stocks. Everything else is pretty much in ETFs for extra diversification. We’ll see in time how that plays out. Even single-digit growth I would be happy with around 6% or so after the last few years.
Cheers!
40/60 recommendation. As usual, financial advice is all based on growth stock/portfolio investing. For those more interested in dividend growth and income, you don’t collect dividends from fixed income securities. I’ll remain all in with equities thank you very much.
Same, 90% stocks along with ETFs here Paul. Hopefully going to hit $90k in income by the end of 2026 via this approach.
Continued success back!
Mark
Just a word to the wise. After the great financial crisis 2008-09, I remember being told to expect muted returns going forward due to lingering economic weakness, high valuations, and shifts in monetary policy. Analysts and experts were predicting a prolonged period of slower growth and lower-than-average stock market performance. The exact oposite happened. The last 15 years have been incredible. That said, I can’t believe we will have another year like the last three. The AI bubble may pop at some point, because investor behavior around AI is extreme. The prudent thing is to maintain bonds and cash as a buffer, and have no regrets. For certain, sentiment will change.
I vividly remember that theory/advice too Sild. Thankfully, Oh so wrong!
I recall those days as well, then, look at the last 15 years???
What is your guess on returns this year? 5% 10% or negative if you had to guess?
I don’t personally see double-digit returns – maybe a positive year though.
We will see!?
AI expansion is totally unknown territory.
Mark
I’m prognosticating high single digits to barely double digits. Reminds of my childhood birthday party game pin the tail on the donkey.
Ya, pretty much the same accuracy right now. Me too!
Mark
Obviously nobody can predict the furture. But there are some obvious risks coming up in 2026 including excessive AI valuations & concentration, China/ Taiwan geopolitical tensions, erratic Trump policies, push towards deglobalization, excessive gov’t debt, and sticky US/ Canada inflation. A double digit drawdown is likely (bear territory), yet the markets could roar back with double digit gains — provided there is no US recession or tech crash to unnerve markets! That’s the unknown but still very real possibility. Mean reversion tells me markets will need to take a step back or plateau at some point — unless we have entered a new era that defies past market history!
That’s where my head is at. A drawdown is likely (bear territory) for 2026 and my best case prediction in this post is about mid single-digit returns on the positive side. Best case. I could be totally wrong. I have been before!
Lots and lots and lots of economic and market headwinds ahead as you have mentioned.
Mark
Hey Mark…just doing some reading up on “glide path investing”. I recall RBull (and probably others) has utilized this in the past. Do you have a post covering this somewhere?
Hey Lloyd,
Not in detail, no post (yet) on this but lots of academic research on this.
Here is a U.S. planner that has done a lot of work in this area.
https://www.kitces.com/blog/should-equity-exposure-decrease-in-retirement-or-is-a-rising-equity-glidepath-actually-better/
Older article but it does explain the process. It also mentions the “rising” glide path aspect as well which is what I was actually interested in learning more about in the first place. Good read but I’ll have to go through it a couple of more times yet.
Good stuff.
Essentially a lot of words and analysis to say it’s often wise to:
1. Start retirement with something closer to 50/50 or 60/40.
2. Then as you age, move closer to 70/30 or 80/20 since you need growth.
I welcome your analysis when you’re done!
lol…”analysis” might be a bit overboard. Just looking at other things I might consider now that the rules of the game have been changed on me.
Maturing GICs could be invested or not, or partially split between investing and renewing. The first larger one in the RRIF comes up in October. I’m past Max-Q so the stress is pretty well eliminated but on the other hand, why bother. Might come down to another coin flip. 🙂
I like to give you a lot of credit. 🙂
Your coin flips have treated you well with your simple but effective portfolio it seems to me…
Cheers!
40/60 a good idea? First off I don’t know, secondly Vanguard has repeatedly demonstrated to also not know. Thirdly given the utterly unpredictable world we live in making any claim is bound to be wrong. I feel these generic statements are all but useless but do they have a point this time? From a US perspective perhaps though I don’t have high hopes for the US bond market so I’d simply buy international equity. From a non US perspective it makes less sense other then limit your US exposure which you should have already done. Ex US will be doing better so why go to FI? Typical US tunnel vision believing the World revolves around them.
What matters most during the post work era is how well your investments are performing relative to risk you are taking on to meet your objectives. There is quite a bit of data on that indicating sizable variance between i.e. our TSX, the SP500, the O’s, Bonds or even the various popular dividend darlings. Some are objectively better suited then others so make informed decisions. If you are in retirement like me risk adjusted returns better be higher. You should also look at truly diversifying your portfolio across asset classes not just regions so that not everything is correlated 1:1. I have about 10%-12% FI but mostly not in bonds soon no bonds at all… good riddance.
No passive index + bond combo gives me what I need/want which is investment income @ ~150% of my withdrawals, limited cash drag, don’t have to sell equity for income, the ability to recapitalize in a downturn, some form of hedge (GLD/SLV/BTC), lower volatility, a smaller downside while still seeking decent returns over the long term. Easy-peasy right!
It will be interesting to see if Vanguard is correct in the next 3-5 years. They could be, no idea, only in hindsight will we know!
It is my hope our portfolio via dividends and distributions will continue to cover most of our expenses without selling anything at all.
Otherwise, that is why the cash wedge is in place! Draw from that and I will do so in the next year or so.
Well done with your planning, seems you are thinking about A LOT!
Mark
It is a natural carry over from my working life Mark, thinking ..can’t help it 🙂 You’ll be fine, @ $90K I sure hope you’d cover most expenses with that just maybe skip on the gold plated toilet seat for now. Although given where gold is going it might be a better investment vs fixed income?
Ben
PS, re: “Vanguard expects non-U.S. stocks .. to outperform U.S. high-flying tech and other stocks over the next decade”. That’s pretty much a given they already are I don’t believe we’ll need to wait 3-5 years to find out if they were right this year will be telling enough.
Gosh, who knows – Ben. Thanks, we hope we will be fine. Lots of scary things to navigate in our world…
I think U.S. stocks are likely expensive by most standards so we’ll see where things go from here. If I had to guess, and I have, then single-digit growth for 2026 is coming. Best case in my book.
Mark
Hi Mark;
My “big” boys are DFN, ENB, KEY and PPL. FTN has done exceptionally well last year
I hold four splits all told.
with value increase as well as two stock splits last year (10% each so 100 shares is now 121). No div increase but the splits make for more.
The rest just plod along doing their thing – paying me.
RICARDO
Gotcha, the pipelines. What % are those in your portfolio if I can ask?
I recall you had LOTs of ENB.
Interesting, DFN – income product.
No banks or utilities as your top stocks?
Hope to earn close to $90k this year via our dividends and distributions. We shall see!?
Cheers,
Mark
Running 28 stocks at present Mark.
Don’t really feel like toting up the percentage of portfolio value as they are spread over five portfolios
As mentioned I have four splits in the portfolios at present.
Pretty spread out with most fields covered more or less.
Splits are not for everyone. DFN has missed 9 payments since my initial stock purchase, two consecutive years of four misses each and one yr with one miss. Present payout is 16% so if you miss 4 payouts, 25%, you only get 12% for that year. Not a problem for me. Remember that past performance is not an indicator for the future so people have to make up their own mind if they want to risk the splits.
My COP on most of my DFN is actually higher than it’s present value. However, if you take in to account the payouts, it’s actual holding value is probably between $1 and $2. Going to $0 cost to hold soon – as long as they keep paying. Have held since 2017 with latest purchase late last year.
Already invested the TFSA $’s (not DFN) which will give and extra $2000 above last years total for the year end. If all stocks keep it up The TFSA will pay out $2K/mth which gets re-invested. The snowball is rolling when you can re-invest every few months.
RICARDO
Great details, thanks for sharing. Ya, DFN/Split funds not for everyone but as long as you understand the risks – then good!
Good job on the TFSA. 🙂 Our TFSAs are both maxed out as well and will write about that in the coming weeks.
Mark
We expect to retire June 2027, in line with my wife’s school year. We’re 100% equities today and I doubt we will reduce that any time soon. They are all Canadian dividend payers, mostly the usual suspects, with some CC ETFs and other income funds as well (FTN, EIT, ENS, HDIV). I’m comfortable that we are generating enough dividend / distribution income that we can withstand a cut (Telus) or a decline in increases (EMA). Once we get through our “go-go” years (currently thought of as 14 years into retirement) I could see the potential for decreasing equities and adding some fixed income / GICs etc. Much will depend on the impact of capital gains as roughly 61% of our portfolio is non-registered, with about 60% average gains. I don’t see us ever changing to fixed income in our TFSAs and we plan to drain our RSP’s over the first 10-14 years. It would have to be something exceptional to trigger gains in our non-registered account to switch a percentage to fixed income. But we will see, it’s a long way off and much will change between now and then.
Great stuff, James.
I can’t see myself owning any fixed income inside the TFSAs either – all for income and growth there now and moving forward.
Buying anything in 2026?
All the best,
Mark
We didn’t have the cash for both my, and my wife’s TFSA. I transferred ARE in kind to mine and we sprinkled my wife’s TFSA across BNS, CM and CPX.
I’m planning on selling SRU for more HDIV after the distribution on the 15th.
After that, once income comes in from my new contract, we will focus on paying down the mortgage and might try to replace some of the dividends we have harvested over the last 7 months.
HDIV is a good fund for income, just don’t really like the covered call stuff but that’s just me.
Well done, kill the debt before you retire. Cashflow will be MUCH better when you do!
Mark
Hey James
I hope all is going well for you. Nice to hear everything continues to track so well for your June 2027 retirement.
hat’s really interesting on your 14 year go-go plan. I’m now 13 years into retirement and don’t see any change coming to our retirement lifestyle within the next number of years (5-10?), I also don’t see any change coming to our investing strategy in that same time period. We’re still 100% TSX listed dividend stocks with no fixed income at all/
Take her easy
Don
Congrats on the cashflow, Don. You’re going great I know!!!
Mark
Thanks Don!
Great to hear from you also. You are probably right about my 14 year time frame and that is not written in stone. I suspect our reality will be more like go-go straight to no-go but perhaps grandchildren will “force” a slow -go. None yet however.
Your journey, along with Mark’s, gave me the confidence to chart our way and it has worked exceedingly well.
Hey James
I really like the go-go to no-go idea and would love to have it work out that way, I had been saying that one of my retirement goals is to have the current year be as good as the previous year. I’m adding another personal goal to go for the go-go to no-go. 🙂
Interesting on the grandkid comment. We have 5 grandkids, ages 16 to 7 and they have always been part of the go-go as they get us out hiking, bike riding, swimming, playing tennis, skating, building snowmen, arts & crafts, etc, etc. They have been a huge part of our retirement and a gigantic source of fun and enjoyment.
Thanks on the confidence comment. You definitely are a top-notch planner!!
Ciao
Don
I’m looking forward your upcoming post on 60/40 or 70/30 recommendations from Vanguard Mark as I need some further insight on how I’ve been managing my own AA. Geopolitics and the MAG7 surge have been what framed my investing decisions throughout 2025 and now I’m looking into my goals for 2026, which is already a volatile year.
The one thing that will stay the same is my EX-US fund selection choices but what my AA breakdown should be is what I’m looking for feedback on. Yes we all know investing is personal and we all have unique circumstances but that doesn’t mean feedback isn’t helpful on a generalized scale.
So here is my AA that I’m looking for a bit of feedback on. I haven’t rebalanced after this week’s market surge and I also sold off some bonds for an RRSP withdrawal. ZAG 34% VCN 20% VIU 46%
You’ve done very well with your investing, Chris – from what I know!
As an fyi – I’ve sold off all U.S. individual stocks. Done.
https://www.myownadvisor.ca/selling-my-u-s-stocks/
I had a good run overall but I’ve found / desired to simplify any ex-Canada investing via ETFs now.
I like XAW and XIU for any ETFs (ex-Canada and within Canada respectively) but certainly other good funds to own as well – you’ve mentioned yours. 🙂
Since you no longer invest in the U.S., as you know, missing out on returns there, but I know your reasoning and respect it. I think upwards of a 50% weight in Canadian stocks in any portfolio is probably fine to be honest.
Own enough bonds/fixed income, etc. to sleep at night would be my answer.
I hope that helps.
Best wishes to you and your family in 2026.
Mark
I don’t believe there is a pre-determined portfolio ratio that fits all investors/savers. There can be reasons for high equity, there can be reasons for no equity, and reasons for everything in between. Only a rationale and reasonable determination can determine where a person might wish to target. Furthermore, the equity ratio might change as life proceeds (or it might not).
I *happen* to currently be at 67/33 but that isn’t a goal, it’s just where I am today.
100% agree = “…don’t believe there is a pre-determined portfolio ratio that fits all investors/savers.”
Any slight bias to stocks over bonds is probably wise for growth. Only in the futue will we be able to look back and see if we are correct.
Happy investing,
Mark
What I am wondering about nowadays is if my divs within the LIF/RIF accounts will be able to keep up with the mandated withdrawal rate. Not because they are not paying but because the run up in portfolio value, especially 2025, is potentially going to outpace the cash flow.
So far so good. I am OK for 2026 payouts. Wondering if the run up will continue in 2026 stock prices and therefor increase the withdrawal amounts mandated.
RICARDO
That is happening to us now. Our RRIF minimum withdrawals have increased by 20% from last year. In one account we won’t have enough dividends to cover it. That is a good thing, I think. We are trying to reduce the RRIF’s value but so far have not done so, even with taking additional amounts out. We will sell something to generate the cash when needed. Then we can always re-purchase in non-registered if we want. We plan to stay 100% equities and collect dividends.
It will be interesting to see how 2026 plays out. Could be a very trying year. I think we’re back to single-digit growth in 2026 at best. Hence my predictions. Would that be enough to sustain your LIF/RRIF payouts?
We don’t do predictions. What did Warren Buffett say? “the only value of stock forecasters is to make fortune tellers look good,” emphasizing that nobody can truly predict daily or yearly market movements. Instead of timing the market, he advocates for long-term investing in high-quality businesses.
As you know minimum withdrawals are based on last year’s ending value of the RRIF. So the amount we have to take out is known. We don’t have quite enough dividends coming in to cover it, unless there are some significant increases.(unlikely) What happens to market prices this year, has no bearing on this.
Yes = “As you know minimum withdrawals are based on last year’s ending value of the RRIF. So the amount we have to take out is known.”
Seems you have plenty of cashflow from many sources to enjoy your spending with. Something I am trying to emulate from you and others a few years ahead of me.
Continued success in 2026 and stay in touch.
Mark
Hey Ricardo
I always do a single annual RRIF withdrawal in mid-Dec and do a mix of RRIF to non-reg share transfer and cash withdrawal. That way, I can minimize the RRIF cash I need to withdraw and just keep re-investing the RRIF dividend income throughout the year.
Works like a charm.
Ciao
Don
Awesome. Might be making my first cash withdrawal from RRSP later this year, Don.
We’ll see how it goes. Got dividends and distributions/DRIPs turned OFF for cashflow. Just spend the cash.
I think like you? 🙂
Cheers,
Mark
Hi Don;
Something similar here in that I hold off the RIF withdrawal to the end of the year.
The reason I do this is that once tax season is past, end of April, I know where I stand for the previous year’s tax liabilities and therefore can guestimate how much I will need to pay for the current year. So when the withdrawal is made, Nov/Dec time frame, I tell the bank what percentage I want withheld for income tax. Don’t want to get hit with quarterly payments. Worked so far, Need to do some cyphering as I am pulling more than the minimal to try and lower the principal. This is due to the run up in stock prices over the past few years.
As to the LIF, I just pull the minimum in January without any tax withheld and it goes towards my TFSA and/or non registered portfolio. The non-registered portfolio has been active since 2020. Just can’t sit around watching cash sit there! That is my so called cash wedge. It is all invested and just might be paying me $1K in divs per mth avg. this year
Been lucky so far in that the LIF and RIF keep growing despite the mandatory withdrawals. The LIF has less than the RIF so not a problem. The RIF keeps growing and I am now trying to minimize growth so that I do not exceed the next tax bracket. That is where the cyphering comes in in Nov. How much to pull out without going over the tax bracket threshold.
As Mark says, A good problem to have.
RICARDO
Hey Ricardo
Lots of similarities in our approach, Very cool to see.
First off, we do the exact same thing with our withholding tax for the exact same reason of making sure both of us are just under the $3000 owing instalment cutoff.
I also can’t stand having extra cash sitting around so we wither invest it, give it to the kids & grandkids, or give extra to charity.
You & I are also both big dividend investors. The only difference being that your annual total is larger than our $230k/yr so a HUGE congrats on that.
Take care
Don
I’m a long way off from $250K yr Don.
I’m also considering paying forward the kids inheritance as well and have upped the charity donations as well.
Seems to be a human trait to pay as little tax as possible.
All the best
RICARDO
I think we need to start looking at how to stay under certain tax thresholds. Would like to read more about this strategy.
Cash to charities, why? We now do all our charitable giving with shares that have capital gains. More efficient, more for the charities, no tax on capital gains for us.
Hey Div
We do our main charity donation as a monthly payment on our Visa (9 World Vision sponsored kids). This is very convenient for us. The other donations are usually quite small ($50-100 a pop) so not worth it. I did look into the transfer of shares at one point but it seemed like too much hassle.
Ciao
Don
Don G, you’re only required to pay tax by instalments if you’ve owed more than $3K to the CRA (less in Quebec) for three consecutive years. After two years, they’ll send you a letter saying you need to make instalments. However, if you know that in the third year you’ll be under the $3K threshold, you don’t actually need to pay by instalments.
This year our unpaid tax liability is almost $13K, and next year I may decide to come in just under $3K.
You could also make an advanced payment to your CRA account, say in February, ahead of filing your taxes, bringing the amount owing below $3K. I’ve not tried that yet, but I’ve heard a financial planner say that it does.
For now, the CRA’s money is sitting in CBIL and cash – it’s just working for me, not them. It’s pocket change, but it’s my pocket change. If I dropped it in the street, I’d definitely pick it up.
Good reminder on CRA, re: tax by instalments if you’ve owed more than $3K to the CRA (less in Quebec) for three consecutive years….
Yes, I believe you can do that – make a credit on your account. Much like a corporation might make installments as well in advance?
I haven’t done that yet on the personal side myself but I might look into this to see if that is, in fact, possible.
Thanks again for your comments.
Mark
Well I fall some place between the 90% – 100% equities.
I tried to hold some cash last year (2025) but was unable to.
Because of this I have even more dividends.
Just over $7K YTD and potentially doubling it by month end. This is one of the “big” quarterly months though so the following two months will not be as generous
Don’t recommend it for every one. Can be risky but if you diversify with the earnings then you are shielding yourself somewhat.
Take care.
HAPPY NEW YEAR to everyone
RICARDO
Phenomenal. Can you share some of your stocks or too many to list? 🙂
I know you have lots of ENB and BN or BAM I believe.
Kudos, can’t imagine making about $14k per month from my portfolio. Bonkers.
Happy New Year!
Mark
Mark, like most predictions, Vanguard’s suggestion to move to a 40/60 portfolio could turn out to be right – or wrong. In retirement, I’ve found my comfortable spot is having enough cash/GICs, dividends and interest, and bonds to cover the next five years of spending. If that results in a total portfolio allocation of 60/40 or 90/10, I wouldn’t lose any sleep over it.
For me, the key is not letting market performance dictate how I spend the remaining years of my life (or at least the next five years). It’s a rolling five-year window, so I’m always covered from “now” plus five years.
Oops, that should have read “suggestion to move to a 40/60”, not “60/40”.
Fixed. 🙂
Gotcha, fixed, don’t worry, re: 40/60.
5-year cash wedge is very, very healthy. I’ve got about 2 years’ worth right now give or take and will be spending from cash/cash equivalents in 2026 and allowing equities to grow a bit more. It is my hope all dividends and distributions (including low-cost ETFs) will pay out about $90k or so in income by the end of 2026 – a decent start to retirement for us.
Smart: “…not letting market performance dictate how I spend the remaining years of my life (or at least the next five years).”
I hope to do the same.
Any investing plans for 2026? Anything you’re focused on?
Mark
That dividend figure is fantastic, as it is for a number of your readers as well.
My investing plans are deliberately simple: no chasing “winners,” no reacting to whatever crazy thing might happen next in the U.S., Ukraine, or anywhere else, and no paying attention to people confidently predicting what comes next.
On the personal front:
– Withdraw from RRIFs quarterly
– Transfer $7K of investments from non-registered accounts to TFSAs – done
– Top up TFSAs with cash to cover the small gap between investments and the $7K – done
– Contribute to five grandchildren’s RESPs and purchase risk-appropriate all-in-one ETFs – in progress
– Finalize estate planning and wills – in progress
– Make final payments to UK government pension plans – April
– Increase dividend ETFs with dividends in TFSA and NR accounts to offset reduction in bond holdings as RRIF withdrawals continue
Other than routine investment account maintenance, that pretty much covers my 2026 financial plan. Not exciting at all.
Bob
Not exciting is good when it comes to investing, Bob.
My parents are doing annual RRIF withdrawals, this time of year, every year.
Do you find quarterly RRIF withdrawals help with cashflow planning vs. annual for you? Curious.
I recall you own a mix of the following income-oriented ETFs for cashflow: XEI (non-reg) and ZDY and ZDI in other accounts.
Do you still have that mix?
Incredible you can also “…contribute to your five grandchildren’s RESPs and purchase risk-appropriate all-in-one ETFs – in progress”.
That’s amazing for their financial future.
Mark
“Do you find quarterly RRIF withdrawals help with cashflow planning…”
I see three benefits: 1. The smaller amounts result in lower withholding taxes, because I don’t get into the 30% bracket, 2. The bulk of my dividends arrive in January, April, July, and October, so making the withdrawals then means I have to sell less ETFs, and 3. I’m maximizing ‘time in the market’ as I only sell when I need the money – if the markets are down I have the cash wedge to fall back on.
“I recall you own a mix of the following income-oriented ETFs for cashflow: XEI (non-reg) and ZDY and ZDI in other accounts. Do you still have that mix?”
I do, however, I cap them at 35% of our total equity. The other 65% is VCN, VIU, and VUN. It all seems to be working ok.
Gotcha. Likely going to start our RRSP withdrawals, annually. Will share the progress!
Mark
Pretty much the same way I operate, and it does give us a blanket of coverage regardless of market gyrations. The amount of FI and how long it lasts is more important than a percent allocation here. Although I’m in the countdown to receiving delayed CPP x 2 in several years, and adjusting our cash float lower to consider that extra FI.
Great stuff.
Mark