{"id":2838,"date":"2025-07-17T13:10:11","date_gmt":"2025-07-17T13:10:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/2838\/"},"modified":"2025-07-17T13:10:11","modified_gmt":"2025-07-17T13:10:11","slug":"how-to-diy-with-retirement-paycheques","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/2838\/","title":{"rendered":"How to DIY with retirement paycheques"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

To fund retirement, the challenge isn\u2019t just to accumulate assets but to create a path to decumulate them.Getty Images<\/p>\n

Many do-it-yourself (DIY) investors have managed to amass a nest egg to fund what they hope will be a comfortable retirement. Now comes the hard part: turning what you\u2019ve saved while working \u2013 your accumulation years \u2013 into a reliable and tax-efficient income stream that lasts as long as you do. <\/p>\n

That can be complicated, says Thuy Lam, certified financial planner at Objective Financial Partners in Markham, Ont. \u201cThe challenging part for do-it-yourselfers is how they build that retirement paycheque.\u201d <\/p>\n

Welcome to the decumulation phase, the post-retirement years when you need to unwind assets to create a paycheque. This is a time when it\u2019s harder to recover from mistakes or setbacks, many decisions loom, and smart strategies are critical. <\/p>\n

While many Canadians are comfortable making investment decisions, Ms. Lam says planning retirement income can be overwhelming. \u201cPeople aren\u2019t sure how much, when and how to draw from their investments,\u201d she says. <\/p>\n

Doing this prudently also involves decisions about when to start government benefits and, for some people, a workplace pension. <\/p>\n

If you\u2019re going it alone, Ms. Lam suggests starting by carefully tracking expenditures before retiring. This provides a baseline of spending habits that you can then project into retirement, adjusting for decreases in costs such as commuting to work, and increases for more frequent vacations. <\/p>\n

\u201cDetermine what assets are available to you, and potentially when,\u201d says Mark Seed, a semi-retired DIY investor in Ottawa, who blogs about his journey at My Own Advisor<\/a>. <\/p>\n

He notes that a major consideration is deciding when to draw on Canada Pension Plan (CPP) benefits and Old Age Security (OAS). Many retirees increasingly opt to defer them in order to receive larger benefits from both, ensuring more guaranteed income later in life. <\/p>\n

Retirees can bridge any gaps by relying more on their Registered Retirement Savings Plans (RRSPs) and Registered Retirement Income Funds (RRIFs) to cover fixed costs and predictable variable expenses. <\/p>\n

Registered accounts are fully taxable, which can lead to tax problems down the road in retirement when mandatory RRIF withdrawals increase. Strategic withdrawals from RRSPs and RRIFs earlier can make sense. \u201cThis helps reduce your tax-deferred liability,\u201d Mr. Seed says. <\/p>\n

Ms. Lam suggests building a retirement income plan based on three buckets. The base income bucket comprises guaranteed income such as CPP, defined benefit workplace pensions, and OAS. <\/p>\n

Registered accounts (like RRSPs, group plans and defined contribution plans) can be layered on top tax-efficiently as a second bucket for remaining fixed and even variable expenses. <\/p>\n

The third bucket is for non-registered investments that provide tax-efficient dividends and capital gains income, or tax-free cash in the case of the Tax-Free Savings Account (TFSA). These can be used for large expenses, whether unexpected like a new roof, or planned like helping children purchase a first home. <\/p>\n

Solid cash-flow planning can help tremendously, Ms. Lam says. \u201cThis involves matching income buckets to categorized spending, and reviewing regularly to ensure you can spend sustainably throughout retirement.\u201d <\/p>\n

Do investment strategies need to change in retirement? According to Ms. Lam, \u201cthe shift isn\u2019t as different as you might think.\u201d <\/p>\n

She recommends a total return strategy, building income from interest, dividends and capital gains. After all, retirement may last decades. \u201cYou don\u2019t have to totally gear the portfolio to generate income at the expense of long-term growth.\u201d <\/p>\n

Annuities are another option for building retirement paycheque, especially for those without workplace pensions. These insurance products involve giving up a chunk of capital for a guaranteed income stream for a set period, or for life. <\/p>\n

\u201cThis ensures a long-term floor in spending, while allowing retirees to confidently invest more aggressively with the rest of their portfolio,\u201d says Kyle Prevost, a Manitoba financial educator who has created online courses<\/a> on a worry-free retirement. <\/p>\n

To crunch the numbers, there are all sorts of free resources like the Government of Canada\u2019s retirement income calculator<\/a>, and The Globe and Mail\u2019s optimal drawdown<\/a> tool. <\/p>\n

It\u2019s possible to dig far deeper with The MoneyReady App<\/a>, a subscription-based retirement planning tool for DIYers created by Elisabeth Tillier of Toronto, a retired computational biologist. She first developed the tool for her own retirement. The tool lets users test different withdrawal strategies. \u201cIt\u2019s like a cash flow time machine,\u201d says Ms. Tillier. <\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: To fund retirement, the challenge isn\u2019t just to accumulate assets but to create…\n","protected":false},"author":2,"featured_media":2839,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[1401,45,49,48,3713,3709,133,3714,3706,131,132,1705,3707,3708,3711,3710,3712],"class_list":["post-2838","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-adveditorial","tag-business","tag-ca","tag-canada","tag-cpp","tag-decumulation","tag-finance","tag-oas","tag-ordid3790914669a","tag-personal-finance","tag-personalfinance","tag-retirement","tag-retirementincome","tag-retirementplanning","tag-rrifs","tag-rrsps","tag-tfsas"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/2838","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=2838"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/2838\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/2839"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=2838"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=2838"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=2838"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}