Quotations by Gail Vaz-Oxlade

If you have hit your 50s, you should have a net worth about eight times your salary accumulated. If you don't, you'll have to up your savings rate to as much as 25% or 30%, delay your retirement, or reconcile yourself to a much simpler lifestyle when you do retire. You should aim to have 11 times your salary socked away by the time you hit age 60. [2013] - Gail Vaz-Oxlade

If you're earning income that has you paying tax at 35% or less, maximize your TFSA first and then put any additional savings in your RRSP. If you're over 50 and have never used an RRSP, you won't have as much time to put the tax deferred compounding of RRSP on your side. Unless you're in the very top two tax brackets and will get a whack of cash back from the Tax Man now, stick with a TFSA. [2013] - Gail Vaz-Oxlade

The answer to the question of whether to contribute to our RRSP or pay down a mortgage does not have to be either/or. While the math shows a considerable interest savings by applying money to your mortgage principal, the growth of an RRSP contribution is also impressive. So here's a sensible compromise. Make the maximum RRSP contribution you can afford from your cash flow and then use the proceeds from your tax refund or the savings in taxes you achieved by filling a Form T1213 to pay down your mortgage. [2013] - Gail Vaz-Oxlade

According to the 4% Rule, if you have a $200,000 portfolio and were retiring today, you could safely withdraw (200,000 x 4% = ) $8,000 in year one. You could then increase that amount every year with inflation and there's a 90% probability that you won't outlive your money over a 25-year retirement. [2013] - Gail Vaz-Oxlade

The only savings vehicle that has absolutely no tax liability is a TFSA. Your government pension--OAS or CPP--will be taxed. So, too, will your company pension plan. When you take money out of your RRSP or your RRIF, you will have to pay tax on that money. And even your unregistered assets will incur a tax liability on the return they earn or on their sale if you make a profit. [2013] - Gail Vaz-Oxlade

In Canada, the first $2,000 of eligible pension income comes into your hands tax-free, which can save you anywhere from about $400 to about $700 depending on where you live. Qualifying pension income does NOT include CPP, OAS, or GIS payments. Make sure you take advantage of the pension income tax credit to get that $2,000 in tax-free income once you're 65 by creating pension income. Buy an annuity that gives you $2,000 of interest income annually or use funds in your RRSP to buy an RRIF and make sure you pull at least $2,000 of annual pension income. When you buy a GIC (technically a GIO) through a life insurance company, the interest earned is considered eligible pension income. [2013] - Gail Vaz-Oxlade

If you convert to a RRIF, you have to manage your own portfolio of investments. If you're sick and tired of thinking about money and all you want is a regular stream of income you don't have to worry about, then you may want to buy an annuity. The really big thing to know about an annuity is that the payout is based on where interest rates are where you purchase the annuity. During periods of high interest rates an annuity can really make your hard-earned money sing since you're locking in that high rate for the life of the plan. When rates are low, not so much. [2013] - Gail Vaz-Oxlade

Because I am not a fan of reverse mortgages, I'm going to suggest you investigate other options before you take this step. If you think you need to use the equity in your home to provide an income, do the math on selling your home and either downsizing or renting so that you free up some of your capital. If you are determined to use a reverse mortgage, make sure you understand the covenants, or legal promises, you are making. Are you promising to keep the property in good repair? What'll happen if you don't? And how will the lender monitor the condition of your property? [2013] - Gail Vaz-Oxlade