Have you thought of turning the doom off? 

That’s the question the awesome song Nothing Went Foom by Bright Mirror keeps asking. 

And it’s the right question — because doomerism has a track record, and the track record is that nothing went foom. 

Not the nuclear winter. Not the population bomb. Not Y2K. Not the AI apocalypse that is supposed to arrive any week now.

Doom, doom, it’s always coming soon. 

But the sun keeps coming up on the same old room.

Here’s the part nobody connects: That same doomer instinct is quietly wrecking your retirement. 

Not with a crash. 

With something slower and exponentially more expensive — bonds, cash, and a balanced portfolio held for an entire lifetime. 

The only thing exponential is the cost of slowing down.

WHAT YOU WILL LEARN:

• Why do people doomerize when nothing went foom?
• What is the exponential cost of doomerism?
• How does doomerism quietly wreck your retirement?
• Does doomerism mean you have to save twice as much every year?
• Why do smart people doomerize?
• Does research support them?
• Why shouldn’t you change your investments when you expect a decline?
• What should you do – instead of doomerizing?

THE PATTERN

Doomerism always sells the same product: safety. And it always costs the same thing: the future.

Nuclear power is the cleanest example. In the nineteen seventies, the world looked at Three Mile Island and Chernobyl and said — never again. We didn’t build the plants. We didn’t build the grid. And fifty years later, we’re still paying for it. The only thing exponential is the cost of slowing down.

Now the same movie is playing with AI. You’ve modeled every way we die. Now model what goes right. Your Probability of doom is a mood ring you read by candlelight. Meanwhile, we’re folding proteins, curing diseases, and the future looks exponentially bright. The benefits of AI can life changing for us. We could cure many or all diseases. The only thing exponential is the cost of slowing down.

But here’s what I want you to see: the same fear that froze nuclear is freezing your portfolio. And the cost is just as exponential.

THE MATH OF YOUR FUTURE

Let’s do the numbers, because this is where it stops being philosophy.

Equities, long-term, make about 8%-10%/year, say 8%/year — conservatively. Bonds make 2%-4%/year — say 3%/year. Inflation runs about three. So bonds, after inflation, make nothing. Zero. You’re treading water for thirty years and calling it safety.

Bonds had a 40-year period with zero return after inflation from 1940-1980. Meanwhile, equity declines have always been temporary. Stock market returns after inflation have been more consistent than bonds, based on the study by Prof. Jeremy Siegel.

Long term after inflation, equities are safer than bonds. And the long-term growth of equities is exponentially higher.

Equities at 8%/year double roughly every 9 years. Bonds at 3%/year take over 23 years. Same money, same time, and one of them becomes 4 times the other.

Run it out: $100,000 at 8% for 30 years becomes about $1 million. At 3%, it becomes about $240,000. That is 6.4 times the growth. That’s not a rounding error. That’s the difference between retiring comfortably and retiring broke.

And here’s the kicker from my own research: with a balanced portfolio, you have to save nearly twice as much of your income to hit the same retirement as an all-equity portfolio. 20% of your income in equities gets you there. 40% of your income in a balanced fund gets you the same place — if you’re lucky. Saving 40% of your income is crazy! You are not going to get there.

Let me repeat: Save 20% of your income to invest in equities or save a crazy 40% of your income to invest in a supposedly safer balanced portfolio. Both get you to the same retirement. Learn to tolerate temporary declines and you can retire comfortably on half the savings.

Doomerism means you have to save twice as much every year!

After you retire, my study of the “4% Rule” over 150 years found that a 100% equity portfolio funded a reliable retirement 96% of the time without managing it. 100% of the time if you effectively manage your retirement income.

What about 100% bonds? Only 47% success rate. Less than a coin flip. And there was not a single case in 150 years where someone ran out of money with all equities but would have been fine with bonds.

THE EXPONENTIAL LOSS

Now here’s the part that should keep you up at night. The loss from doomerism isn’t linear. It’s exponential.

If you hold bonds instead of equities, you’re giving up roughly 5%/ year. Which means you are giving up getting 6.4 times the growth after 30 years. You have to save twice as much every year to get the same retirement.

You count the cost of getting it wrong. Who counts the cost of taking too long? That’s the question.

Doomers are excellent at counting the cost of the crash that is temporary. They’re terrible at counting the cost of the decades of growth you spent hiding from it – and the great life you could have had. The only thing exponential is the cost of slowing down.

WHY IT HAPPENS

So why do smart people do this? Because doomerism feels like prudence. Selling stocks after a crash feels like protecting yourself. Holding cash feels like being careful. And the industry profits from it — balanced funds, target-date funds, the whole glide-path machine is built on the assumption that you should get more conservative as you age.

But the research says the opposite. The optimal lifetime allocation in one major study focusing on the US was 33% domestic stocks, 67% international, and 0% bonds, 0% cash. In short, 100% equities is optimal. Not because stocks are safe — because over a 30-year horizon, they’re safer than the alternative. The risk of stocks is a bad decade. The risk of bonds is a bad lifetime.

And sequence of returns risk — the scary thing advisors warn about with a big loss shortly after you retire — my research found it basically isn’t a thing for a 30-year retirement if you stay invested.

Retiring at an all-time high? All-time highs happen all the time. The market doesn’t care about your entry point over thirty years.

INVESTMENT PHILOSOPHY

As financial planners, we have an investment philosophy based on asset allocation to achieve your life goals. What we don’t have is a market outlook. We’re focused on your life goals, not on what the market is going to do next quarter.

Everybody’s worried about market declines. But declines in history have all been temporary. So it makes no sense to change your long-term asset allocation — and your long-term life goals — based on a temporary decline that you know will end.

The only market timing that works is to buy more at the bottom. Buy more after a 20% or greater decline. But never, ever sell.

THE COST OF WAITING

And here’s the AI point I keep coming back to. There are all kinds of improvements expected from AI — including, for example, that we may solve cancer in the next few years. And here everybody is focused on an unlikely catastrophe. They’re not focused on the exponential cost of what happens if we don’t solve cancer in the next while.

That’s the asymmetry nobody prices. The downside of doomerism isn’t just the money you lose hiding in bonds. It’s the breakthrough you never got because you spent 50 years afraid of the machine instead of building your future.

Here’s the thing about doomerism: it’s never been right about the future, and it’s been exponentially expensive about the loss of growth.

Nothing went foom. Not the nukes, not the robots, not the market. The sky’s still up. The world’s still spinning round. And the only thing exponential is the cost of slowing down.

You’ve modeled every way we die. Now model what goes right. Put the number down and give the future room.

WHAT TO DO

Create your long-term plan — your life goals, your timeline, your allocation. Make that allocation as close as you can to 100% equities, because that’s what the math says you need to grow your wealth long-term.

Then stick to it. Don’t doomerize. Don’t sell when the headlines scream. Don’t hide in bonds and cash because a crash feels close. Every decline in history has been temporary — and the only market timing that works is buying more after a 20% drop – never selling.

Turn the doom off. Avoid the exponential cost of waiting. Grow your portfolio. And live a great life.

We haven’t had our best days yet.

Ed

The post Have You Thought of Turning the Doom Off? How Doomerism Is Quietly Wrecking Your Retirement appeared first on Ed Rempel.

A practical guide to paying for school without treating every available dollar of credit as money you should spend.

This Isn’t Just About Tuition – It’s About Direction

At some point in your academic journey, getting accepted and being able to afford the education can start to feel like two separate challenges. Tuition may be the biggest line item, but rent, food, books, transportation, professional fees and everyday life can create just as much pressure.

The goal is not to avoid borrowing at all costs. It is to understand the full cost, use the most appropriate funding sources first, and borrow only for the gap that actually remains.

1. Start With the Full Cost – Then Find the Gap

Before deciding what to borrow, map one full school year. Include tuition and mandatory fees, but also the costs that tend to surprise students: rent, groceries, transportation, books, equipment, licensing fees, technology and the cost of getting through periods when work hours may be lower.

2. Build Your Education Funding Ladder

There is no single order that works for every family, but a useful planning framework is to use resources that do not create expensive future payments before reaching for private credit. The right mix will depend on eligibility, family circumstances and the tax or withdrawal rules attached to each source.

3. Two Ways the Financing Gap Can Show Up

Sometimes the gap is one large amount. Sometimes it is a series of smaller cash-flow gaps that keep appearing across the school year. The financing structure should match the problem you are actually solving.

Neither example is about debt being automatically good or bad. The borrowing has a defined job, and the amount is connected to a real funding gap.

4. Why Government Student Aid Usually Comes Before Private Credit

Government student aid is often a sensible starting point because it may combine grants with loans and can include protections that private borrowing does not. As of September 2026, no interest is charged on Canada Student Loans, while provincial or territorial rules can differ. Repayment of the federal loan generally begins after a six-month non-repayment period.

•  Federal portion: currently 0% interest.

•  Provincial / territorial portion: rates, grants and repayment rules vary by jurisdiction.

•  Government aid is need-based and capped, so it may reduce the gap without covering the entire cost.

5. Where Student Lines of Credit Fit

A student line of credit is not the same as taking one large lump-sum loan. You receive an approved limit and draw from it as costs arise. Interest is charged on the amount used, not the unused portion of the limit. That flexibility can be valuable – but only if the limit stays separate from your lifestyle budget.

6. The Co-Signer Reality

A co-signer can help a student qualify, but that person is not simply providing a reference. Depending on the agreement, the debt can affect the co-signer’s credit and borrowing capacity and can leave them responsible if payments are not made.

•  Make sure the co-signer understands the legal obligation, not just the reason you need the financing.

•  Treat payment dates and interest obligations as shared consequences even if you are the person using the funds.

•  Do not let a co-signer’s stronger credit become permission to borrow beyond the actual education plan.

7. Professional Programs Change the Conversation

Programs such as medicine, dentistry, law, pharmacy, veterinary medicine, business and other professional programs may receive different lending treatment because costs and expected career paths differ. Larger limits can be available – but the biggest limit is not automatically the best offer.

Compare the structure, not just the maximum

8. Keep the Financing Connected to the Education

The easiest way for education financing to become expensive is for the available credit to quietly turn into general spending money. You do not need to track every coffee, but you should know what the borrowing is allowed to do in your plan.

•  Good fit: tuition gap, required equipment, rent or basic living costs that keep you stable while studying.

•  Pause: upgrades, trips or recurring lifestyle spending that only fit because unused credit is sitting there.

•  Red flag: using one form of credit to make the required payment on another without a clear restructuring plan.

9. Prepare for the Post-Graduation Shift Before It Arrives

Do not assume every student debt changes the same way after graduation. Government loans and private student lines of credit have different rules. Before your final year, know when each account begins repayment, what the approximate payment may be and how it will fit beside rent, transportation, professional fees and the rest of your new working life.

10. Your 60-Second Education Financing Test

☐  What is the full annual cost of the program, including living expenses?

☐  What scholarships, grants, RESP/family resources, savings or income are available?

☐  How much government student aid will cover the gap?

☐  If private credit is needed, how much do I actually need – not how much can I access?

☐  What interest or payments are required while I am in school?

☐  When does each debt move into repayment after graduation?

☐  Do I need a co-signer, and have we both discussed the obligation?

☐  Is every dollar I plan to borrow connected to education or basic stability?

Final Thought: Financing Should Support the Goal

Student financing is not free money, and it does not have to be a trap. When the education is a good fit and the borrowing is tied to a realistic gap, financing can help you access skills, credentials and opportunities that would otherwise be difficult to reach.

The planning matters because the debt will still be there after graduation. Borrow for a purpose, know the structure, and understand the transition before you sign.

Government of Canada reference points

Current federal rules referenced in this article were checked against Government of Canada guidance in September 2026. Program rules can change.

•  Canada.ca – Canada Student Grants and Loans / how funding works

•  Canada.ca – Repay a student loan / six-month non-repayment period and 0% federal interest

•  National Student Loans Service Centre – repayment and loan stages

— Sabiha

The post Financing Your Education in Canada: Student Aid, Savings, Lines of Credit & Building the Right Funding Mix appeared first on Ed Rempel.

Your salary is only the starting point. The real value is everything working around it.

When I sit down with clients and we start talking about income, almost everyone leads with one number: their salary. And that makes sense. It is the most visible part of what you earn.

But once we look a little deeper, it becomes clear very quickly that your salary is only one part of what you are actually being paid.

Depending on your role, your full compensation may also include a bonus, an employer-matched group RRSP, a pension, stock options or RSUs, and health, dental, disability, or life insurance benefits.

A Simpler Way to Look at Your Compensation

Instead of treating every benefit as a separate line item, I like to simplify your compensation into three buckets:

Most people spend nearly all of their attention on the first bucket. But the second and third buckets can have just as much impact on your financial life.

1. What You Earn Now: Salary and Bonus

Your salary is the straightforward part. It is stable, predictable, and easy to build a monthly plan around. The part that often gets less attention is your bonus.

2. What Protects You: The Benefits You Notice Most When They Are Gone

The protection side of your compensation rarely feels exciting. In fact, it can be easy to ignore until you actually need it. But these benefits can protect both your cash flow and the financial plan you are building around it.

Health and Dental Coverage

Prescriptions, dental work, physiotherapy, and other health expenses may feel manageable one at a time. Over a year, though, they can add up quickly.

I have seen clients move from an employer with strong benefits to one with much weaker coverage and only then realize how much value the old plan was quietly providing.

Disability Insurance

This is one of the benefits I want people to understand before they ever need it. If your ability to earn an income is interrupted, almost every other part of your financial plan can be affected.

Life Insurance

Many group plans provide life insurance equal to one or two times salary. That is valuable coverage, but it may not be enough on its own if your family is relying on your income and you are carrying a mortgage, raising children, or funding long-term goals.

3. What Builds Your Future: Where Compensation Can Really Compound

This is where your compensation package can start to move the needle over the long term. Small decisions around employer matching, pensions, and company stock can add up to meaningful differences over a career.

Group RRSPs and Employer Matching

If your plan says something like “we match contributions up to 4% or 5%,” that is one of the first benefits worth understanding.

Pension Plans

Pensions tend to create two very different reactions: some people barely understand what they have, while others assume the pension will take care of retirement completely.

RSUs and Stock Options

Equity compensation can be incredibly valuable, but it can also create risk when a large portion of your wealth becomes tied to the same company that pays your salary.

Where Things Usually Break Down

Most people do not have a bad compensation package. The problem is that every piece is being managed in isolation.

·  Salary and bonus being managed as separate decisions.

·  RRSPs, pensions, and insurance benefits running in the background without a coordinated review.

·  Company stock accumulating without a deliberate diversification plan.

When no one pulls these pieces together, it becomes easy to miss opportunities, take on more risk than you intended, or assume one benefit is doing more work than it really is.

A Better Way to Look at It

Instead of asking only, “What benefits do I have?” step back and ask what each part of your compensation is doing for you.

The Bottom Line

Your salary is the starting point, not the whole picture. Your compensation is also the protection around your income and the tools your employer gives you to build long-term wealth.

Sometimes the biggest improvement does not come from earning more. It comes from using what you are already being paid more intentionally.

— Sabiha

The post Understanding Your Full Compensation Package: It’s More Than Just Your Salary appeared first on Ed Rempel.

The online Canadian Financial Summit is coming up October 21–24, 2026.

It’s Canada’s top personal finance event of the year!

As a reader of the Unconventional Wisdom blog, here are your FREE tickets to the Summit.

With your FREE ticket, you can watch talks from some of Canada’s leading personal finance and investing experts, with each day’s presentations available to watch for 48 hours.

You can also offer your friends and family FREE tickets by forwarding them this blog post.

I’ll be one of the speakers again this year with three talks, and I’ll be joined by more than 40 Canadian personal finance and investing experts, including Rob Carrick from The Globe and Mail, Shannon Lee Simmons, and Kornel Szrejber from Build Wealth Canada.

Where else will you find all these experts in one place?

My Three Talks This Year

Thursday, October 22

Retirement Tax Shock: Why Many Canadians Pay More Tax Than Expected

Most Canadians expect to be in a lower tax bracket when they retire. But many end up paying more tax than they expected.

In this talk, I’ll explain how tax brackets change after age 65 and why common assumptions about RRSPs and retirement income can lead to higher lifetime taxes.

You’ll learn practical strategies to reduce your taxes over time, including how to use RRSPs, TFSAs, and income timing to create a more tax-efficient retirement.

Watch the talk here: https://canadianfinancialsummit.com/2026-day-1

Friday, October 23

How to Build a Retirement Plan That Actually Works – and Grows Your Wealth

Is your retirement plan designed to help you build wealth and enjoy the retirement lifestyle you want, or is it focused too much on playing it safe?

Many retirement plans are designed to feel safe, but that safety often comes at the expense of long-term growth.

In this talk, I’ll explain my retirement planning philosophy, how to determine the investment return you actually need to achieve your retirement goals, and why equities may need to play a larger role in your portfolio than you think.

I’ll also discuss how to think about investment risk, long-term growth, and when more advanced strategies might be appropriate.

Watch the talk here: https://canadianfinancialsummit.com/2026-day-2/

Saturday, October 24

The Smith Manoeuvre vs. Cash Dam: How to Choose the Right Strategy and How Self-Employed Canadians Can Do Both

You’ve probably heard of the Smith Manoeuvre, but have you heard of the Cash Dam?

Many Canadians, especially those who are self-employed, may not realize there are different strategies that can help make interest tax-deductible and build wealth over time.

In this talk, I’ll explain how the Smith Manoeuvre and Cash Dam strategies work, when each one makes sense, and whether combining them could improve your results.

I’ll also discuss what to watch out for and how these strategies can fit into your overall financial plan.

More About the Summit

• It’s FREE! You can watch my three talks and presentations from other Canadian financial experts at no cost during their 48-hour viewing windows.
• It’s 100% online. Stream the talks from your computer, tablet, or phone.
• Watch when it’s convenient. Each day’s presentations are available for 48 hours after release.
• Share with friends and family. Forward this blog post so they can get their FREE tickets too.

Whether you’re planning for retirement, looking to reduce taxes, or trying to build more wealth, there are plenty of valuable topics to explore.

Below is the link for your FREE tickets:

Canadian Financial Summit 2026 – Get Your FREE Tickets

See you at the Summit!

Ed

The post Your FREE Tickets to the 2026 Canadian Financial Summit – Watch My 3 Talks appeared first on Ed Rempel.

A practical Canadian guide to choosing debt intentionally before you sign.

Borrowing Is a Tool – Context Is What Matters

At 18-25, borrowing decisions can arrive quickly: a first credit card, a car you need for work, tuition that is due before your summer income arrives, or a line of credit that promises flexibility. The question is not simply whether debt is ‘good’ or ‘bad.’ The better question is whether the debt solves a real problem at a cost your future cash flow can comfortably carry.

You do not need to memorize every lending rule. You do need to know what you are signing, what the borrowing will cost, what could make the cost change, and how much room the payment leaves for the rest of your life.

Before You Borrow, Know These Four Numbers

1. Student Loans: Borrowing With a Specific Purpose

For many Canadians, student borrowing is the first large debt they carry. Education can be an investment in skills, credentials and future earning capacity, but the financing still needs to be understood before you accept it.

Know which kind of student borrowing you have

•  Federal Canada Student Loans: no interest is currently charged on the federal portion. Government repayment assistance may also be available if income is too low for the scheduled payment.

•  Provincial or territorial student loans: interest, grants, repayment rules and assistance vary by jurisdiction.

•  Private student loans or student lines of credit: offered by financial institutions. Interest and repayment rules come from the lending agreement, and they do not generally provide the same government repayment protections.

2. Car Loans: The Monthly Payment Is Not the Price

A car can create access to work, school, family and opportunities. The risk is focusing so heavily on whether the payment is approved that you miss what the car will cost after insurance, fuel, maintenance, tires, parking and repairs are added.

Common ways to finance a car

•  Secured auto loan: the vehicle is security for the loan; rates may be lower than unsecured borrowing.

•  Dealer financing: convenient and sometimes promotional, but compare the rate, term and total cost with outside financing.

•  Bank or credit-union loan / line of credit: another quote can help you compare flexibility and total cost.

•  Unsecured personal loan: may cost more because the loan is not backed by the vehicle.

What to check before you sign

•  Total loan cost, not only the monthly payment.

•  Loan term. A very long term can keep you making payments after the vehicle has lost a large share of its value.

•  Negative equity: if you owe more than the car is worth, selling or trading it can create another debt.

•  Full ownership cost: insurance, fuel, maintenance, tires, parking, registration and repairs.

•  Whether the payment still works if your hours fall or an unexpected expense hits in the same month.

3. Credit Cards: Convenience With Discipline

Credit cards can make purchases easier and help build a credit history, but they are also easy to underestimate because tapping a card does not always feel like borrowing. Once you carry a balance, the card becomes a high-cost loan.

Three rules that matter most

•  Pay the statement balance in full by the due date whenever you can. Eligible purchases on federally regulated cards generally receive at least a 21-day interest-free grace period when the balance is paid as required.

•  Do not treat the minimum payment as the goal. Minimums can stretch repayment over years and materially increase interest.

•  Try to use less than about 30% of your available revolving credit. High utilization can weigh on your credit profile even when payments are made on time.

Ahmed’s reset

Ahmed used his card for groceries, restaurants and small purchases. Nothing felt dramatic until he stopped paying the full statement balance and the debt climbed past $6,000. His reset was simple: stop new non-essential charges, set a fixed repayment amount, and make the card harder to use impulsively. The first win was stopping the balance from getting worse.

What actually builds credit

•  Pay on time – every time.

•  Use a small share of your available credit.

•  Keep older accounts when they still make sense and do not encourage overspending.

•  Apply for new credit only when you need it.

•  Review your credit reports for errors. Checking your own report does not hurt your credit score.

4. Other Borrowing You Will Probably See in Your 20s

Not every borrowing decision arrives with a big application form. Some products are designed to feel quick and easy, which is exactly why you should recognize how they work before you need them.

High-cost borrowing deserves an extra pause

If you are considering a payday loan, title loan or another high-cost product because rent, food or another essential expense will not fit, treat that as a cash-flow warning. A more expensive loan can make the original problem harder to solve. Contact creditors early, compare lower-cost alternatives and seek reputable help before the cost compounds.

5. The 30-Second Borrowing Test

☐  What problem does this debt solve for me?

☐  What is the total cost, including interest and fees?

☐  Can I make the payment from normal income?

☐  What happens if my income drops for one or two months?

☐  Is the rate fixed, variable or promotional?

☐  Is anything I own securing the debt?

☐  What happens if I miss a payment?

☐  Is there a cheaper or more flexible alternative?

☐  If there is a promotional rate, when does it end?

☐  Would I still choose this if nobody else could see what I bought?

Final Thought: Approval Is Not the Goal

Debt can help pay for education, transportation and opportunities that move your life forward. It can also quietly take over future paycheques when the term is too long, the interest is too high or the purchase never really fit the budget in the first place.

The better question is not, ‘Can I get approved?’ It is, ‘Can I repay this and still have room for the rest of my life?’ That is the decision worth making before you sign.

Government of Canada reference points

Current federal rules referenced in this article were checked against Government of Canada guidance in September 2026. Program rules can change.

•  Canada.ca – Repay a student loan / interest on Canada Student Loans

•  Financial Consumer Agency of Canada – Improving your credit score

•  Financial Consumer Agency of Canada – Credit cards, car loans and borrowing guidance

— Sabiha

The post Understanding Your Borrowing Options: Student Loans, Car Loans, Credit Cards, Lines of Credit & More appeared first on Ed Rempel.

Here’s my story. On July 30th I was diagnosed with prostate cancer.

Intermediate aggressive. Gleason score 7. Not the slow kind you watch. Not the slow growing kind that most men eventually get. The kind that is growing somewhat aggressively.

19 days later — August 18th — I had surgery.

I am now 100% cancer free!

The only reason that sentence exists is because it was caught in Stage 1. Fully contained inside the prostate. Surgery took the whole organ, and the cancer went with it.

80% of my prostate was already cancer. If I had waited for symptoms, we would be having a different conversation.

The Typical Story

Most people don’t get this version of the story.

Most people get diagnosed when something already hurts, when PSA has been climbing for years and nobody treated it like an emergency, when it’s Stage 3 or Stage 4 and the conversation is about managing, not removing.

That is what happened to my wife. Diagnosed at stage 4.

Mine was Stage 1. Contained. Operable. Done.

It was Gleason 7 — intermediate risk. Not Grade Group 1, the “maybe we just watch it” category. Intermediate means it grows.

Pathology after surgery: about 80% of the gland was already cancer.

When four-fifths of a small organ is tumor, you are not early in the biology. You are early in the calendar. You found it before it punched through the capsule.

That is the difference between “surgery got it all” and years of radiation, hormones, and scans.

I did not beat cancer because I am tough. I beat it because it was still inside one organ when we took that organ out.

Life Priorities

I drive a ten-year-old car. I spend a lot of money on my health. Those two facts are related.

Last year I posted a video about Fountain Life in the United States — intensive testing aimed at finding the major diseases people die from before those diseases announce themselves.

I treat health like a mortgage: the bill you do not skip.

Cancer does not care that you “feel fine.” Early cancer often has no symptom worth bragging about. Stage 1 versus Stage 3 is timing, not character.

For me, everything is optional. Health isn’t.

Health is the only asset you can’t replace.

What “Early Diagnosis” Actually Meant for Me

Aggressive testing.
July 30: diagnosed. Gleason 7. Intermediate aggressive.
August 18: surgery.
Contained. Clear. Cancer gone with the gland.

Nineteen days only works if you are doing early diagnosis testing, have a diagnostic relationship, and you do not spend three months “thinking about it.”

Find it while it is still a local problem. After it is systemic, this is not the video you get to make.

The 4 Horsemen of Chronic Disease

Fountain Life’s premise — the one I used last year — is that the four categories that kill most people can often be seen years early: cancer, heart disease, metabolic disease like diabetes, and brain disease like dementia and Alzheimer’s.

Canada’s death list matches that. Cancer is number one — about one in four deaths. Heart is number two. Dementia, if you count it the way families live it, would sit third — more than 27,000 deaths in 2024. Diabetes is in the top ten.

Their claim is not immortality. It is that intensive testing — imaging, blood, genetics, metabolic markers, cognition — pulls those problems into the window where medicine still has options.

For the most part, these 4 diseases can be detected early today.

For the most part, they can be effectively treated if diagnosed early.

Cancer inside one organ: surgery. Cancer after it leaves: a life with chemo & radiation.

Calcium score before the first heart attack: prevention. After: rehab.

Prediabetes: often reversible. End-stage diabetes: blindness, limb amputation or kidney failure.

Brain change while memory is mostly intact: years of levers. Brain change after power of attorney: much less.

Honest limit: not every cancer is visible early. Not every scan is free of risk. Not every finding should be treated. Overtreatment is real.

The other limit is also real: a system that waits for symptoms, plus a population that skips the doctor, the refill, and the screen, will keep producing late diagnoses.

The Canadian & Early Detection Gap

Canadian health care is decent at treating you once you are already sick. It’s sick care, not health care.

It is much weaker at the job that saved me: finding disease while it is still small.

Walk-ins, ERs, and specialists are built around symptoms. Early cancer often has none. Early heart disease often has none. Prediabetes often has none. Early Alzheimer’s often has none.

If you wait for the system to tap you on the shoulder, you are waiting for late-stage language.

The first gap is basic: many people do not even have a doctor.

Statistics Canada: roughly one in five adults do not have a doctor — on the order of 5.7 million adults, plus hundreds of thousands of kids.

Canada has also ranked last among peer countries on “do you have a regular doctor or place of care.” Of people with no provider, many already have a chronic condition or take prescriptions. There is nobody to renew them with.

Regular visits dropped too. The share of adults who don’t regularly consult a GP is about 31%. You cannot screen what you never see.

Then prescriptions. Canada covers the hospital better than the pill bottle. About 1 in 10 people who were prescribed a medication delayed a refill or skipped doses because of cost. That is before you count the quieter version: the man who never goes back, so the refill never happens.

Then the screening we already know works — and still skip.

Statistics Canada: only 49% of people aged 50–74 had a recent fecal test or sigmoidoscopy for colorectal cancer. That means a huge share of the target age group is not in the early-detection lane for a cancer we can often catch before it kills. Pap tests among women 25–69 fell from 74% to 69%. Common reasons for skipping: “didn’t think it was necessary,” “the doctor never brought it up,” “no time,” and “no regular provider.” Mammograms are a bit better — done by about 79% of women 50–74.

Prostate is worse by design. The federal prevention task force has recommended against routine PSA screening since 2014. Canadian research then found Stage 4 prostate cancer up about 50% in men 50–74 after the anti-screening era – and more than that in older men. That is the cost of being more afraid of over-diagnosis than of silent spread.

Metabolic disease is the same pattern. Diabetes Canada wants adults age 40+ tested at least every three years. An Alberta study found men in their 40s were far less likely than women to get that screen — about 58% of men 40–45 versus 73% of women. Men were more likely to have the disease when they finally were tested. High blood pressure is common in about one in four Canadian adults; a large slice of people with no other “label” still don’t know they have it. You only find that on a cuff, not on a feeling.

StatsCan on outcomes: men die before age 75 from preventable or timely-treatable causes at a much higher rate than women. That is not toughness. That is missed visits, missed bloodwork, missed refills, missed screens.

I am the other side of those graphs. Gleason 7. 80% of the gland was cancer. Still Stage 1. Still contained. August 18. Gone with the organ.

That is what happens when detection is a project, not an accident.

Don’t Die from Something Stupid

This is the motto of the book “Longevity Guidebook” by Peter Diamandis, the founder of Fountain Life. “Something stupid” is not just risky activities like sky diving or motorcycles. It includes dying from a disease that we can diagnose early and treat effectively today.

If I had waited until I had symptoms, I would have died of something stupid.

I drive a 10-year-old car, but I spend a lot on my health and early detection. I consider it cheap compared with cancer at Stage 3 or 4. Find it while it is small. Health is my priority #1.

Do not wait for Canada to invent a perfect early-detection program. Use what exists.

If you have no family doctor, get on a list and use a nurse practitioner, a walk-in that will do bloodwork, a virtual clinic that will renew and order labs — whatever legally gets you a file and a baseline. One in five adults has no regular provider. Do not be the sixth.

If you have a doctor, book the visit you have been postponing. Ask for the basics out loud: blood pressure, A1C or glucose, lipids, and — if you are a man with years of life ahead — a real PSA conversation, not a shrug. Bring last year’s labs so someone can see change.

If you have a prescription, fill it. If cost is the issue, say so — pharmacies and provinces have options. If the issue is that you never went back, that is the gap that does not show up as a “cost study.” It just shows up as Stage 4.

If you are age 50 to 74, do the colorectal kit. Half of that age group still isn’t in the recent-test column. It is a stool sample, not heroism.

If Fountain Life or another intensive workup is in reach, use it. I highly recommend them. If it is not, you have options. Public screening plus a yearly set of labs is still how most early disease is found.

Watch my last year’s Fountain Life video for the stack I use. Then do the unglamorous thing this week: doctor, blood, screen, refill.

July 30: diagnosed.
August 18: surgery.
Now: 100% cancer free! Because the prostate is gone and the cancer had not spread.

Early detection is how I beat cancer.
Prevention and early detection — done on purpose, not when something hurts — is how you stay out of the other three categories.

Make it a life priority. Keep the old car. Or find the time & money your way.

Book the test. That’s it.

Don’t Die from Something Stupid!

Ed

The post Early Diagnosis – How I Beat Cancer appeared first on Ed Rempel.

When most Canadians hear the word “trust,” they picture complicated legal structures, expensive lawyers, and wealthy families moving millions of dollars behind the scenes. But trusts are not only for the ultra-wealthy.

For parents and grandparents, two much simpler arrangements can sometimes help organize ownership and build wealth for the next generation: a bare trust and an informal “In-Trust For” (ITF) account. They can be practical and cost-effective, but simple does not mean consequence-free. Tax attribution, documentation, beneficial ownership, estate treatment, and the child’s eventual control all matter.

At a Glance: How the Two Arrangements Differ

1. Bare Trusts: Who Actually Owns the Asset?

A bare trust is a trust arrangement in which the trustee holds legal title, but has little or no independent power over the property. For Canadian income tax purposes, the CRA generally describes a bare trustee as someone who can reasonably be considered to act as agent for the beneficiary in dealings with the trust property.

Put simply: the name on the title and the person who truly owns the economic value can be different. The trustee may be the registered owner on paper, while the beneficial owner keeps the real rights, risks, and rewards of ownership.

Why families may consider one

• Administrative convenience. A bare trust can allow one person to hold registered title or an account on behalf of the true beneficial owner, where appropriate.
• Ownership clarity. A properly drafted agreement can document who contributed the money, who is entitled to the asset, and what the trustee is – and is not – allowed to do.
• Tax reporting follows beneficial ownership. Income and gains from the property are generally reported by the beneficial owner, not by the nominee simply because their name appears on title.

2. Informal ITF Accounts: Simple, Useful – and Easy to Misunderstand

An informal “In-Trust For” account is commonly opened by a parent or grandparent at a bank or brokerage for a minor child. The adult manages the investments while the child is too young to contract directly with the institution.

The important part is that the words “in trust for” on an account statement do not, by themselves, answer every legal question. Whether the arrangement creates a valid trust or an irrevocable gift depends on the documentation, the intention of the contributor, who controls the money, and the surrounding facts. Keeping clean records matters.

Why families may consider one

• Simple setup. Many institutions can establish an ITF investment account without the cost of a formal trust deed.
• A long runway for compounding. Regular gifts can be invested for many years, giving the child time to benefit from long-term growth.
• A clear family purpose. When the arrangement is properly documented, the account can make it easier to separate money intended for a child from the parents’ day-to-day assets.

3. Two Blind Spots That Catch Families Off Guard

ITF accounts can be practical, but two issues deserve attention before the balance becomes large: who pays the tax along the way, and who controls the money when the child becomes an adult.

Blind Spot 1: The CRA Attribution Rules

A common assumption is that investment income in a child’s ITF account will automatically be taxed at the child’s lower tax rate. That is often not the case when a parent, grandparent, or other related person transfers money to a related minor.

• Interest and dividends. Income from the transferred property may be attributed back to the transferor and reported on the transferor’s tax return while the beneficiary is a related minor under the applicable rules.
• Capital gains. Under the related-minor attribution rule, taxable capital gains from a later disposition are generally not attributed back to the transferor, although other rules and exceptions can apply.
• Income on income. Income earned by reinvesting income that has already arisen on the gifted property may be treated differently. Good recordkeeping becomes especially important as the account grows.

Blind Spot 2: Control at the Age of Majority

This is often the bigger surprise. If the child has a vested beneficial interest in the account, reaching the provincial age of majority can give them the legal right to demand control of the property. The exact result depends on the validity and terms of the arrangement and the law that applies, but parents should not assume they can keep indefinite control simply because they are the trustee.

4. How Simple Trust Arrangements Can Support an Estate Plan

Bare trusts and ITF accounts are not complete estate plans on their own. Used properly, however, they can support a broader strategy by making ownership more intentional and by allowing some wealth to move to the next generation during your lifetime.

Lifetime gifting

A well-documented, irrevocable gift can move future growth to the next generation while you are alive. Where the child truly owns the property, the asset may fall outside the contributor’s estate, which can reduce the assets subject to provincial estate administration or probate fees. That result is not automatic – incomplete documentation or retained ownership can change the outcome.

Ownership clarity

Clear records can reduce confusion about who owns what. For every ITF or bare trust arrangement, keep the account-opening documents, contribution history, source of funds, tax reporting records, and any written trust or nominee agreement together with your estate documents. That paper trail can be just as important as the account itself.

5. When to Keep It Simple – and When to Graduate

You do not need to start with a complicated structure simply because you want to build wealth for a child. If the dollar amount is manageable, the ownership intention is clear, and you are comfortable with the child eventually taking control, a simple arrangement may do the job very well.

As the stakes rise, the structure may need to change. A formal trust may be worth considering when the balance becomes significant, when you want control beyond the age of majority, when there are family-law or creditor concerns, when a beneficiary has special needs, or when the planning involves private corporations and succession. An estate freeze is a separate corporate succession strategy that may sometimes be used alongside a family trust – it is not simply a more advanced version of an ITF account.

Before You Open One, Ask These Seven Questions

• Who is the true beneficial owner? Make sure the legal title and the economic ownership are intentionally documented.
• Is the gift meant to be irrevocable? If you still expect to take the money back later, the arrangement may not accomplish what you think it does.
• Who reports the income and capital gains? Attribution rules can make the answer different for interest, dividends, and gains.
• When does the child get control? Know the age-of-majority implications before the account becomes large.
• What happens if the trustee dies or becomes incapable? Make sure your estate documents and account records address continuity.
• Could there be a T3 or Schedule 15 filing obligation? Trust reporting rules are evolving and should be reviewed annually.
• Would a formal trust better match the goal? If you need long-term control or advanced planning, simplicity may eventually become a limitation.

The Bottom Line

The best structure is not the one with the most legal language. It is the one that matches your family’s real goal. If your goal is to give a child a head start, protect clarity around ownership, and let time and compounding do the heavy lifting, a bare trust or ITF account may be useful. If your goal is to control how and when the money is used long after the child becomes an adult, you may need something more formal.

Start with the purpose. Then choose the structure.

General educational information only; not legal, tax, or investment advice. Trust law, age-of-majority rules, beneficial ownership, attribution, and filing obligations depend on the facts. Confirm the arrangement with your legal and tax advisors before implementation.

— Sabiha

The post Building Wealth for the Next Generation: A Guide to Bare Trusts and Informal “In-Trust For” Accounts in Canada appeared first on Ed Rempel.

I was recently featured in EntrepreneursBreak discussing why I believe free markets and the stock market have been such powerful drivers of prosperity and long-term wealth.

In the article, I look at:

• Why economic freedom matters for rising living standards
• Some of the biggest myths about capitalism and inequality
• What history tells us about the Great Depression and industrialization
• Why owning businesses and equities has been one of the most effective ways to build wealth

One thing I’ve seen repeatedly after looking at the complete finances of thousands of Canadians: people who build significant wealth usually own productive assets — businesses and stock market investments.

CLICK THE LINK BELOW TO READ THE FULL FEATURE HERE:

Ed Rempel on Why Free Markets and the Stock Market Build True Wealth

For decades, popular narratives have painted free markets and equity investing as engines of inequality and instability. Critics frequently suggest that strict government regulation and heavy intervention are necessary guardians of public prosperity. Toronto-based financial planner and tax accountant Ed Rempel argues that history tells a completely different story.

In a recent analysis of market history, Rempel discusses how economic freedom and open capital markets are the primary drivers of rising global living standards. Far from concentrating wealth among a select few, open markets create the conditions necessary for innovation, higher real wages, and long-term portfolio growth. Most people participate in this growth by owning stocks in their retirement accounts and pensions.

“When people can freely start businesses, invest, trade, hire, and compete without excessive government barriers or favouritism, capital flows to the best ideas, companies create real value, and investors are rewarded with compounding wealth,” says Rempel.

One major obstacle to learning the value of economic freedom is the persistence of economic myths. Modern commentary links societal hardship to free-market mechanisms. Hard data show that past economic surges greatly benefited ordinary citizens.

Critics say the Industrial Revolution and the “robber barons” hurt the working class. History says the opposite. Real wages after inflation more than doubled in Britain between 1840 and 1900. Life expectancy rates climbed during this time. Workers voluntarily left agrarian life for factory towns because industrialization offered better earnings and more economic stability.

Similarly, economic drops are routinely blamed on unchecked capitalism. The Great Depression is regularly framed as a crisis caused by market greed that required massive government help to be fixed. Economic data demonstrates that policy missteps prolonged unemployment and worsened financial pain. Central bank contractions of the money supply and government restrictive trade tariffs and wage rigidities (the New Deal making it far harder to hire employees) turned a normal market downturn into 10 years of very high unemployment and severe hardship.

Rempel points out that when public policy distorts natural market mechanics, systemic problems follow. “From my own experience seeing the full finances of thousands of people, the people with money are usually the ones who invested in stock market equity investments or in their own businesses,” he says.

The link between economic freedom and everyday prosperity extends into modern market dynamics. Concerns around manufacturing declines, income gaps, and corporate dominance often ignore the basic mechanics of productivity and trade. In manufacturing, high output levels are maintained with changing workforce needs. Manufacturing in the US is not “hollowed out”. It is actually at an all-time high. Studies show that most factory job losses over the last 10 years were driven by advances in technology and automation, not international trade. Productivity reduces the cost of everyday goods, giving people of all incomes more purchasing power.

Traditional measurements of income inequality often impact modern living standards. Standard Centrus metrics frequently exclude non-cash government benefits, tax credits, and transfer programs, painting an incomplete picture of household finances. When adjusted for total government transfer benefits and family employment rates, the material gap between income brackets shrinks dramatically. Real inflation-adjusted consumption show the lifestyles of people in lower-income brackets has increased significantly throughout the past several decades. This has helped expand access to quality housing, vehicles, appliances, healthcare, and technology.

When governments try to manage outcomes through excessive price controls, targeted subsidies, or retaliatory trade barriers, the resulting market distortions often harm the consumers and workers those policies were meant to protect. Free enterprise thrives when capital flows naturally to efficient ideas rather than to politically favoured entities.

The stock market is an accessible way for individual investors to engage in free enterprise. Equities help individuals gain a share of innovative companies that build products, create jobs, and solve problems. When businesses operate in environments with low barriers to entry and healthy competition, capital is allocated efficiently toward the most productive ventures. This productivity generates corporate profits, which are then given to individual shareholders through capital appreciation and compounding returns.

Protecting open markets is not merely an abstract political preference. It is a practical prerequisite for long-term wealth. As investors look to secure their financial futures, supporting innovative businesses with equity investments is one of the most reliable strategies for building personal wealth alongside economic growth.

Ed

The post EntrepreneursBreak article: Ed Rempel on Why Free Markets and the Stock Market Build True Wealth appeared first on Ed Rempel.

A practical guide to making your first big money choices without waiting for perfect confidence.

Some of the biggest money decisions arrive before you feel qualified to make them. Your first investment. A job offer. Moving out. Buying a car. Deciding whether home ownership belongs in your near-term plan.

The uncomfortable part is that there is rarely a moment when every variable lines up and someone hands you a certificate that says, “You are officially ready.”

That is why the goal is not perfect certainty. The goal is a decision process that keeps one imperfect choice from becoming a financial trap.

A better question than “Am I ready?”

Before a big financial decision, run it through five questions. They work whether you are choosing an investment, a home, a job, a car, or another major commitment.

Decision #1: “Should I start investing if I don’t feel ready?”

A common thought in your late teens and twenties is: “I’ll start when I understand more, earn more, or feel more confident.” The problem is that confidence often comes after you begin learning—not before.

Start with the foundation, not the hype

Investing is usually most useful for money that has a long time horizon. Before increasing long-term investing, make sure your short-term foundation is not being ignored.

Canadian tool: the TFSA

A TFSA is an account type, not an investment. Canadian residents generally begin accumulating contribution room at age 18. The 2026 annual TFSA dollar limit is $7,000, but your personal room depends on residency history, prior contributions, and withdrawals.

Example: the value of starting before you feel “expert enough”

Suppose someone invests $250 a month and earns an average 6% annual return, compounded monthly. This is only an illustration—real returns are not guaranteed.

The earlier start does not win because age 25 is magical. It wins because there are five additional years of contributions and more time for compounding. The useful lesson is consistency—not chasing a perfect entry point.

Decision #2: “Should I buy a home because renting feels like falling behind?”

This is where the original “just start” message needs more nuance. Buying a home can be a good decision, but it is one of the least reversible financial choices most young adults make. Feeling uncertain may be a signal to slow down and check the numbers—not a sign that you are failing.

What “ready to buy” actually includes

Current Canadian down-payment rules

The minimum down payment depends on the purchase price. For homes priced at $500,000 or less, the minimum is 5%. From $500,000 up to less than $1.5 million, it is 5% of the first $500,000 plus 10% of the amount above $500,000. Homes at $1.5 million or more require at least 20%. A down payment below 20% will typically require mortgage loan insurance.

Federally regulated lenders also apply the mortgage stress test. The qualifying rate is generally the higher of 5.25% or your contract rate plus 2%. Some first-time buyers with insured mortgages may be eligible for a 30-year amortization, which can reduce the monthly payment but may increase total interest paid over time.

Example: a $480,000 condo

A $480,000 purchase can have a minimum down payment of $24,000. But $24,000 is not the same as being financially ready. A buyer also needs to plan for closing costs, mortgage insurance where applicable, monthly carrying costs, and enough emergency savings to avoid becoming “house rich and cash poor.”

Canadian tool: the FHSA

If you are an eligible first-time home buyer, a First Home Savings Account can be worth learning about even before you are ready to buy. FHSA contributions are generally tax-deductible, qualifying withdrawals can be tax-free, first-year participation room is $8,000, and the lifetime contribution limit is $40,000. Unlike a TFSA, FHSA room begins when you open your first FHSA.

Decision #3: “Should I take the job if I’m not sure I’m qualified—or if the salary isn’t the whole story?”

Career decisions are financial decisions because your income, benefits, retirement plan, commute, learning opportunities, and future earning power all affect your financial life.

Compare total compensation, not just salary

Job B looks stronger financially, but the answer is not automatic. A long commute, higher stress, less flexibility, or a poor culture can outweigh part of the compensation difference. The point is to compare the whole package.

Sometimes “I don’t feel ready” is useful information

Not every hesitation is fear. Sometimes your numbers are telling you something important. The skill is separating emotional discomfort from a genuine affordability problem.

A simple process for decisions that are not urgent

When the decision is important but not time-sensitive, create a little distance between the emotion and the commitment. A short pause is often enough to reveal whether you want the decision—or just want relief from uncertainty.

The 48-hour decision memo

1. Write the decision in one sentence. Example: “I am deciding whether to finance a $22,000 used car.”

2. Write the true first-year cost. Include interest, insurance, taxes, fees, maintenance, or any other predictable cost—not just the sticker price or monthly payment.

3. Write the downside. What happens if income drops, the investment falls, the commute becomes exhausting, or you need to move?

4. Write the exit route. Could you pause contributions, sell the asset, change jobs, move, refinance, or cancel without a major penalty?

5. Ask what waiting six months changes. Would waiting build cash and clarity—or would it simply delay a reasonable next step?

What “good enough to act” looks like

✓ I can explain what this decision is supposed to do for me.

✓ I know the full cost—not just the headline number or monthly payment.

✓ I know what could realistically go wrong.

✓ I can afford the downside without sacrificing essentials or relying on high-interest debt.

✓ I know whether the choice is easy or expensive to reverse.

✓ I have compared acting now with waiting.

✓ I am not making the decision mainly because someone else seems ahead of me.

✓ I know the next small action, even if I am not ready for the final commitment.

Final thought

You do not need perfect timing, perfect knowledge, or perfect confidence. But you do need enough information to understand the trade-offs—and enough financial margin to survive being imperfect.

Start small when the decision is reversible. Slow down when the commitment is expensive to unwind. Build flexibility into your plan whenever you can.

Confidence usually does not arrive before action. It grows from making a reasonable choice, watching what happens, learning, and adjusting.

Your future does not require you to get every decision right. It requires a process that helps you keep moving without putting the rest of your life at risk.

— Sabiha

The post How to Make Financial Decisions When You Don’t Feel Ready appeared first on Ed Rempel.

Liam thinks he is in a 19% tax bracket.

He isn’t.

He is effectively in a 50% tax bracket because he pays 0% income tax, but loses 50% of additional taxable income through the GIS clawback.

His situation is interesting because:

• His cash income, taxable income and income for GIS purposes are three very different numbers, which is part of why his situation is so complex.
• Most retirees simply take the minimum RRIF withdrawal. For Liam, that could be a poor strategy because he could lose 50% of those withdrawals through reduced GIS over the years.
• He is considering an RRSP Meltdown Strategy. The traditional version involves borrowing to invest, which could work exceptionally well for him, but is probably too aggressive and complex.
• Liam is thinking about withdrawing $30,000–$35,000/year from his RRSP, but the optimal amount is much higher — about $66,000/year. It means about 2/3 of his RRSP would be taxed about 21%, instead of the 50% clawback.
• It’s unconventional, but after about four years of eliminating his RRSP, he could receive roughly $10,000/year in GIS for the rest of his life.
• The $66,000/year RRSP meltdown also works beautifully with his plan to buy a new car in four years.
• He only has somewhat more money than he needs for his lifestyle for the rest of his life, so he probably should not give much to his nieces and nephews. It is more important to stay financially independent and never have to ask family for money.

In my latest article for the National Post, I look at why withdrawing more from an RRSP now can sometimes leave you better off later.

CLICK THE LINK BELOW TO READ THE ARTICLE BY MARY TERESA BITTI:

Could an RRSP/RRIF meltdown reduce Liam’s GIS clawbak without triggering a big tax bill?

Liam*, 67, is retired, single, and focused on managing his finances as effectively and efficiently as possible.

He is considering a Registered Retirement Savings Plan/Registered Retirement Income Fund meltdown, a tax strategy that involves drawing down his retirement savings before required to increase his income and smooth out lifetime tax. 

He is also looking into a reverse mortgage as a living inheritance for his nieces and nephews or to free up funds to expand his modest lifestyle. 

Liam lives in Ontario where he owns a home valued between $650,000 and $700,000. His monthly income is about $3,000 from part-time work ($500), Canada Pension Plan benefits ($510), Old Age Security 65 ($740), and Guaranteed Income Supplement payments ($1,000), and dividends ($250 automatically deposited to a Tax-Free Savings Account).  His monthly expenses are $2,200, including saving $50,000 over the next four years for a new vehicle and $850 in payments on a $78,000 mortgage. 

“I could pay off the mortgage, but I prefer leaving that money in my TFSA where it can grow,” he said. He may downsize down the road if the house becomes too much or to boost his investments. 

Liam’s portfolio includes nearly $240,000 in RRSPs and about $120,000 in a TFSA invested in a mix of growth and conservative bank-managed mutual funds. He has $30,000 in contribution room in his TFSA. 

While Liam thinks withdrawing the RRIF minimum and tapping into his TFSA as needed should be able to cover his expenses, he wonders if there is a strategy that could create more financial flexibility without impacting government benefits and reduce lifetime taxes. 

For example, in 2030, after he has converted his RRSP, which estimates should be worth about $300,000 at the end of 2029, to a RRIF, does it make sense to start to “meltdown” the account? Specifically, he wonders if, in addition to CPP and OAS, he should apply his marginal tax rate of 19.05 per cent to systematically withdraw between $30,000 to $35,000 a year from his RRIF and contribute any funds he doesn’t immediately need to his TFSA and to pay off any potential tax liability.

If so, when?

“Should I wait until later in the year (November/December) to calculate and execute this extra ‘meltdown withdrawal’?” he asked. 

“Is there a better way to manage cash flow and tax-plan in my 70s and 80s?

Financial Plan

Liam’s case is typical of many low-income seniors who think their situation is simple and low tax, but it’s actually complicated and high tax. He has a good opportunity, but it is unconventional.

Liam needs $220,000 to support his lifestyle of $36,000/year after tax for the rest of his life, which is okay because he has $360,000. He has enough money.

The reason he needs this much when he is only withdrawing $3,000/year from his investments (from his TFSA) is because he will stop working at some point, he will be forced to start withdrawing from his RRSP, and he will lose a chunk of his GIS. How much GIS he loses depends on what he does.

Tax Planning

he wonders if there is a strategy that could create more financial flexibility without impacting government benefits and reduce lifetime taxes. 

Liam thinks he is in a low 19% tax bracket, but he is actually in a high 50% tax bracket, which applies to many low-income seniors. He does not actually pay income tax, because his taxable income is less than his basic and age tax credits. However, his GIS is clawed back by 50% of his adjusted taxable income.

Liam gets $36,000/year in cash income, but only $21,000 of it is taxable and $6,620 reduces his GIS. His GIS is reduced by 50% of his income, but there are specific rules for which income is clawed back and which is not. Here are the details:

His employment income is taxable, but the first $5,000 does not count to reduce his GIS and only 50% of the next $10,000 counts. So only $500 of his $6,000 employment income reduces GIS by $250.

He thinks he gets a “dividend”, but it is really a combination of interest and some return of his own money from a mortgage fund, but it is not taxable because it is a withdrawal from his TFSA.

CPP is taxable and reduces his GIS by $3,060. OAS is taxable, but GIS is not, and neither reduces GIS.

The basic tax credit that everyone gets plus the age credit for being over 65 total to about $25,660, which more than offsets all his taxable income, so he pays no income tax. He does not pay 19%. He pays 0% income tax.

However, every additional dollar of taxable income he earns will reduce his GIS with the 50% clawback. Whenever he withdraws from his RRSP, he will lose 50% of the withdrawal in GIS. He is essentially in a 50% tax bracket because he loses 50% of any taxable income to the government.

RRSP/RRIF Meltdown Strategy

The actual RRIF Meltdown Strategy involves borrowing to invest and using your RRIF to pay the tax-deductible interest. Liam has not mentioned this and he probably does not have the risk tolerance for it, but it would work exceptionally well for him if he took out a reverse mortgage and invested the proceeds.

Liam would likely not qualify for any mortgage other than a reverse mortgage. The bank would likely lend him up to $250,000-$300,000. The interest would be about $10,000/year, which is roughly equal to his minimum RRIF. It could mean that he would get close to the maximum GIS all his life and have a simple minimum RRSF withdrawal, but it is a complex strategy to borrow to invest, withdraw a sustainable amount and invest tax-efficiently. This is probably not the right strategy for Liam because he invests conservatively and has no experience borrowing to invest.

…does it make sense to start to “meltdown” the account? Specifically, he wonders if, in addition to CPP and OAS, he should apply his marginal tax rate of 19.05 per cent to systematically withdraw between $30,000 to $35,000 a year from his RRIF and contribute any funds he doesn’t immediately need to his TFSA

Most retirees do the simple approach and just take the minimum RRIF. This will be somewhat of a disaster for Liam because he will lose 50% of all of his RRIF to reduced GIS over the years. For example, the minimum RRIF for him would be about $13,000/year, which would reduce his GIS by $6,500 with the 50% clawback. His GIS would drop from $12,000/year to $5,500/year.

Liam is thinking about a “meltdown” by withdrawing $30,000 or $35,000 per year from his RRSP to melt it down and invest in his TFSA, so that eventually it will be gone and he won’t have his GIS clawed back. Since he gets $12,000/year of GIS, the 50% clawback on the first $24,000/year he withdraws will eliminate his GIS. Withdrawing $30-35,000 would mean only a bit is does not affect his clawback. The $5-11,000 above the clawback would be taxed at 19%.

He has the right idea, but the optimal amount is withdrawing $66,000/year from his RRSP, which is much higher. It is unconventional to withdraw that much! This works because it would bring his taxable income up to $94,000 which would be taxed at various tax rates of 33% or less. Any larger withdrawal would be taxed at 44% which is almost as much as the GIS clawback of 50%.

This RRSP Meltdown Strategy would eliminate his RRSP in about 3.6 years. He would lose his GIS completely for 4 years and pay about $14,500/year income tax. It means about 2/3 of his RRSP would be taxed about 21%, instead of the 50% clawback. After the 4 years, he should get about $10,000/year GIS for the rest of his life.

The bank would withhold about $20,000 of tax and he should get a refund for the $5,500 difference. He should maximize his TFSA every year and invest the rest in a non-registered account that is very tax efficient. Over the 4 years, he should accumulate about $90,000 for his non-registered account and maximize his TFSA every year.

He will lose 50% of any taxable income from this non-registered account for the rest of his life. With tax-efficient investing, he should only have $1,000-3,000/year of taxable income. Tax-efficient investing will be very important for Liam, since he will effectively be in a 50% tax bracket – like the very high-income earners!

If so, when? “Should I wait until later in the year (November/December) to calculate and execute this extra ‘meltdown withdrawal’?” he asked. 

He should do this RRSP Meltdown Strategy starting this year. The longer his RRSP grows, the more tax & GIS he will lose when he withdraws it.

Ideally, he should wait until near the end of the year and then estimate his taxable income for the year. The optimal RRSP withdrawal is the amount that will bring his taxable income up to $94,000.

Mortgage, Car Purchase and Estate

“I could pay off the mortgage, but I prefer leaving that money in my TFSA where it can grow,” he said. He may downsize down the road if the house becomes too much or to boost his investments. 

This is good thinking. His investments today are about 54% equities and 46% fixed income, so he should expect a long-term average return of about 5.25%. He can renew his mortgage at 3.7%, so it is better for him to keep the investments and the mortgage.

…saving $50,000 over the next four years for a new vehicle.

Liam is trying to save $50,000 over 4 years, but does not really have the cash flow to do this. The RRSP Meltdown Strategy should give him about $90,000 in addition to maximizing his TFSA, which can allow him to buy his car in 4 years. It’s a nice coincidence that he wants to buy the car in 4 years and the optimal RRSP Meltdown is over 4 years.

He is also looking into a reverse mortgage as a living inheritance for his nieces and nephews or to free up funds to expand his modest lifestyle. 

Liam would likely not qualify for any mortgage other than a reverse mortgage. He has about $140,000 more than he needs to support his lifestyle for the rest of his life, but he should keep a comfortable margin of safety above this.

It is probably not advisable for him to give much to his nieces and nephews. He should make sure first that he will be financially independent and have enough for himself, and never need financial help from his family.

Ed

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