Mike, Author at MOOSE MARKETS

The 4 Budgets of Retirement: How to Spend Confidently at Every Stage

Most Canadians understand the importance of having a budget while saving for retirement—but few realize just how critical budgeting becomes after you retire.

While your working years are about maximizing savings and staying invested, retirement introduces a new challenge: spending wisely without outliving your money.

One of the most common questions from retirees is:
“How do I protect my portfolio against a market correction?”

While you can’t control the markets, you can control how much you withdraw and when. And that starts with a retirement budget tailored to each phase of your journey.

The Four Phases of Retirement

Just like your working life has seasons, so does your retirement. These four stages—Before You Go, Go-Go, Slow-Go, and No-Go—help define your spending needs and investment strategy over time.

Planning with these stages in mind enables you to build an agile retirement budget that grows, flexes, and contracts as needed—while keeping your long-term financial health intact.

1. Before you Go: The Accumulation Years

This is the “pre-retirement” phase, which often lasts longer than retirement itself. It’s the period when you’re actively saving, investing, and preparing for what lies ahead.

The most important principle here?
Pay yourself first. Systematic investing—through your RRSP, TFSA, or pension—is the cornerstone of a secure retirement.

But don’t stop there. This is also the time to envision the kind of retirement you want:

Will you travel regularly?
Do you want to help your children financially?
Will you buy a vacation home or downsize?

These answers will shape your savings targets and retirement age. The earlier you plan, the more flexibility you’ll have later.

Tips for this phase:

Use tools like a Projection Spreadsheet to explore different scenarios.
Adjust contributions between RRSPs, TFSAs, and other accounts based on your income and pension entitlements.
Stick with a consistent investing strategy that suits your goals and risk tolerance.

From GICs to REITs: A Complete Guide to Retirement Income in Canada

Canadian Retirees Guide to Income-Producing Investments Cover.

This free guide reviews 20 income-focused products. In the one-page summaries, we highlight the pros and cons, common mistakes to avoid, and who should use them.

We also created a rating system to highlight the difference between each product. The idea is to provide you with as much information as possible so you can make the right choice for your situation.

While there is no free lunch in finance, there are multiple ways to reach your retirement goals.

Download the Complete Guide to Retirement Income Products to discover which fits your retirement phase best.

2. Go-Go Years: The Fun Phase

The moment you retire, you enter the “Go-Go” phase. You’ve worked hard, saved diligently—and now it’s time to enjoy the rewards. For many Canadians, this phase lasts from their early 60s to around age 75.

Picture of a retired couple walking on the beach.

This is when you’ll likely:

Travel more
Make larger discretionary purchases
Renovate your home or relocate
Spend on family or hobbies

However, this phase also presents a new challenge: shifting from saving to spending. Many retirees feel anxious about drawing down their portfolio.

That’s why having a flexible budget is key. You’ll want:

A base budget for regular expenses (housing, food, utilities)
A variable budget for travel, new cars, and other big-ticket items

Tips for the Go-Go years:

Reassess your plan annually: simulate “retiring now” each year to update your 12-month budget based on portfolio performance.
Postpone large purchases in down markets and increase spending during up years.
Use advanced budget tools to account for one-time gifts or lifestyle upgrades.

3. Slow-Go Years: Steady as It Goes

As you move into your mid-to-late 70s, travel slows down, energy levels shift, and your budget changes again.

While you’ll spend less on big adventures, your base expenses may stay the same—and some costs (like health care or home maintenance) could increase.

You might also want to adapt your home for aging-in-place or plan for more frequent medical appointments or services.

Tips for the Slow-Go phase:

Don’t reduce your budget too aggressively; changes should be gradual.
Consider future-proofing your home for mobility and comfort.
Explore downsizing or selling assets to unlock cash if needed.

4. No-Go Years: Health First, Finances Second

This final phase typically begins in your 80s or later, when cognitive or physical health changes become more significant. You may spend more time at home, require assisted living, or home care.

At this point, your budget shifts to reflect increasing healthcare needs, estate planning, and support services. You’ll have a reliable income stream if you’ve built a strong foundation with defined benefit pensions, CPP, OAS, or annuities.

If your strategy included gradually drawing down your portfolio or even “dying with zero,” this is the time to ensure you’ve preserved enough flexibility.

Tips for the No-Go phase:

Be cautious with plans to spend aggressively in earlier phases; longevity risk is real.
Keep a home as a backup asset, or ensure stable income from guaranteed sources.
Review estate plans and consider early inheritance options or charitable giving if desired.

Final Thoughts: Plan Long, Adjust Yearly

Planning for retirement is much like planning a long road trip. You need a map for the big picture, but you’ll also need to reassess regularly, adjusting for weather, detours, and unexpected stops along the way.

One of the best habits you can develop is to “retire each year.” That means checking in annually with your budget, income, and lifestyle expectations. That way, you’re not just reacting to market corrections—you’re steering your retirement journey with confidence.

Ready to build a retirement income plan that fits your lifestyle?

From simple GIC ladders to advanced income strategies, the Canadian Retirees’ Guide to Income-Producing Investments covers 20 income-generating products with pros, cons, and tax insights for each.

👉 Get your free copy of the complete guide now and take the guesswork out of retirement planning.

2 Income Products for Your Retirement

One of the biggest challenges when planning for retirement is creating a dependable income stream that balances safety, flexibility, and long-term growth.

Fortunately, Canadian investors have access to a variety of income-generating strategies. This post explores two proven approaches: Laddered Bond ETFs & GIC Ladders and Dividend Stocks.

Each serves a distinct role in a well-diversified retirement portfolio.

Remember, they are just two of 20 retirement income products I analyzed in a comprehensive guide. The guide categorizes each option by complexity and suitability for retirees.

Whether you’re in the Go-Go, Slow-Go, or No-Go phase, this guide can help you find the right income solution.

Download the Guide Now to Get a Review of 20 Income Products

Laddered Bond ETFs & GIC Ladders

What Are They?

A laddered bond ETF is a fund that invests in a series of bonds with staggered maturity dates, typically across 1 to 5 years. As bonds mature, proceeds are reinvested automatically, maintaining a balanced maturity ladder.

Similarly, a GIC ladder involves purchasing Guaranteed Investment Certificates with staggered maturities—often one yearly from 1 to 5 years. As each GIC matures, the capital and interest are rolled into a new 5-year term, preserving the ladder structure.

How do They Generate Income?

Both products earn income through regular interest payments. The principal can be reinvested or withdrawn upon maturity, depending on your needs. Bond ETFs offer more liquidity, as they can be sold anytime, while GICs are typically locked in unless you choose redeemable options.

Pros

Balance between income and capital preservation.
Laddering smooths out interest rate risk.
GICs are CDIC-insured (within limits) for added protection.

Cons

GICs may be locked in and non-redeemable.
Bond ETFs are exposed to market risk and may lose value if rates rise.
Interest income is tax-inefficient in non-registered accounts.

Tax Considerations

Interest income is fully taxable. To minimize the tax impact, it is best held within tax-sheltered accounts such as TFSAs or RRSPs.

Who Is It Best For?

This strategy is ideal for retirees in the Slow-Go or No-Go phase who prioritize predictable income and capital protection. GICs appeal to those seeking safety, while bond ETFs offer liquidity and flexibility for those following a systematic withdrawal plan.

Common Mistakes to Avoid

Choosing long-term GICs without understanding redemption terms.
Assuming bond ETFs are “risk-free” like GICs.
Failing to reinvest matured capital, weakening the laddering effect.

From GICs to REITs: A Complete Guide to Retirement Income in Canada

This free guide reviews 20 income-focused products. In the one-page summaries, we highlight the pros and cons, common mistakes to avoid, and who should use them.

We also created a rating system to highlight the difference between each product. The idea is to provide you with as much information as possible so you can make the right choice for your situation.

While there is no free lunch in finance, there are multiple ways to reach your retirement goals.

Download the Complete Guide to Retirement Income Products to discover which fits your retirement phase best.

Dividend Stocks

What Are They?

Dividend stocks are shares of companies that distribute part of their profits as dividends—often quarterly or monthly. Canadian dividend-paying stocks with consistent dividend increases signal strong fundamentals, reliable cash flow, and prudent management.

Understand how to find the most reliable dividend stocks by reading about the dividend triangle.

How do They Generate Income?

Dividend payments offer a recurring source of income. Investors may take the dividends in cash or reinvest them for compounding growth. A well-constructed dividend portfolio can deliver monthly or quarterly income with potential for annual increases.

Pros

Tax-efficient income thanks to the Canadian dividend tax credit.
Potential for dividend and capital growth over time.
Helps offset inflation through dividend increases.

Cons

Dividends are not guaranteed—cuts can occur in downturns.
Subject to market volatility.
Requires time, interest, and some financial knowledge to manage effectively.

Tax Considerations

Eligible Canadian dividends are taxed at a lower rate than interest income in non-registered accounts, making dividend stocks a strong candidate for taxable portfolios.

Who Is It Best For?

Dividend stocks are best suited for retirees in the Go-Go or Slow-Go phases who are comfortable with market exposure. This approach rewards those seeking rising income and portfolio growth. Even novice investors can manage this strategy effectively with tools, newsletters, or professional support.

Common Mistakes to Avoid

Chasing high yields without assessing dividend safety.
Overconcentration in one sector (e.g., banks, energy).
Ignoring stock valuation when buying.

We have covered some other income products in the Dividend Guy Blog podcast episode below.

Final Thoughts: A Solution for All Retirement Seasons

Both laddered bond strategies and dividend stocks can play an essential role in your retirement plan.

Bond ladders provide stability and predictable cash flow, while dividend stocks offer growth potential and tax advantages. Choosing between them—or using a mix of both—depends on your comfort with risk, need for liquidity, and long-term income goals.

By understanding the trade-offs and aligning them with your retirement phase, you can build a resilient portfolio that supports your lifestyle—through all seasons of retirement.

Ready to build a retirement income plan that fits your lifestyle?

From simple GIC ladders to advanced income strategies, the Canadian Retirees’ Guide to Income-Producing Investments covers 20 income-generating products with pros, cons, and tax insights for each.

👉 Get your free copy of the complete guide now and take the guesswork out of retirement planning.

Canadian Depositary Receipts (CDRs): Smart Shortcut or Investment Illusion?

Imagine being able to invest in Amazon, Apple, or Microsoft in Canadian dollars—without opening a U.S. account or worrying about exchange rates.

Welcome to the world of Canadian Depositary Receipts (CDRs), a unique financial product tailored for Canadian investors who want access to big-name U.S. companies without the hassle of the U.S. dollar.

But before you jump in thinking CDRs are the ultimate shortcut, let’s take a closer look.

Are they the perfect solution?
Or are there limitations you need to know before clicking “Buy”?

Let’s explore what CDRs are, how they work, and whether they belong in your portfolio.

What Are CDRs and Why Are Canadians Interested?

CDRs are like the Canadian cousin of ADRs (American Depositary Receipts).

But instead of giving U.S. investors access to foreign companies, CDRs let Canadian investors buy fractional shares of U.S. companies—right on the Canadian market and in Canadian dollars.

They’re issued by CIBC and traded on Cboe Canada (formerly the NEO Exchange). You don’t need a U.S. brokerage account, and there’s no need to convert your CAD to USD. You log in to your brokerage, search for the CDR ticker (like AAPL.NE for Apple), and buy in Canadian dollars.

CDRs are especially appealing for two reasons:

Currency hedging: CDRs protect you from USD/CAD fluctuations—your returns aren’t affected if the loonie drops in value.
Fractional investing: Since you’re buying a slice of a U.S. share, you can invest in companies like Amazon or Microsoft for just $30–$40 CAD per share.

Sounds convenient, right? It is—but there’s more to the story.

What You Gain and What You Might Miss

Pros of CDRs

Invest in U.S. giants without buying USD
Lower share price makes big names accessible
Currency fluctuations are mostly neutralized
Dividends are paid in Canadian dollars
No special tax rules if held in an RRSP

But, of course, there are a few limitations you should know about.

The Not-So-Obvious Downsides

You miss out when the U.S. dollar gains value. Since 2021, the USD has appreciated by about 10% against the CAD. If you had held Amazon’s U.S. stock instead of the AMZN CDR, you’d have seen a 10% boost in your returns just from currency alone.
Only a subset of U.S. companies are available as CDRs. Many strong dividend-paying U.S. stocks—especially those favored by income investors—aren’t included.
They’re just fractions. Buying a CDR is like buying a slice of pizza when you want the whole pie. Sure, you can buy more over time, but you’re still tied to fractional dividend payouts and limited voting rights.

Do You Get the Dividend?

Yes! If the company pays a dividend, CDR holders receive it proportionally.

Instead of receiving the full dividend per share (like $0.62/share from Microsoft), you get the same yield (e.g., 0.85%) on the CAD value of your investment. It’s all paid out in Canadian dollars—no conversion or withholding tax if held in an RRSP.

One note of caution: If you hold your CDRs in a TFSA, the dividend is still subject to a U.S. withholding tax, even though the shares are bought in CAD.

Is it Really that Hard to Buy US Stocks?

This is where I push back on the “CDRs are more convenient” argument.

These days, most Canadian brokers offer dual-currency accounts, so you can hold CAD and USD side-by-side. And if you’re worried about conversion fees, there’s a great workaround known as Norbert’s Gambit, which lets you convert CAD to USD for a fraction of what banks charge. It takes a bit of setup, but for long-term investors, it’s well worth it.

Want to learn how Norbert’s Gambit works and when it makes sense to use it?

Get the full explanation in the CDR Guide (yes, it includes a step-by-step example and diagram).

My Personal Take: I Don’t Use CDRs-Here’s Why

Despite all their benefits, I don’t invest in CDRs myself, and here’s why:

I like the long-term upside of holding U.S. dollars. Over decades, the CAD/USD fluctuations tend to even out, but when the USD rises, I want to benefit from it.
I prefer direct ownership of U.S. stocks. More options, full shares, full dividends.
I already have a USD account. Once you’re set up, buying U.S. shares directly isn’t any more complicated, and I keep the dividends in USD for reinvestment.

That said, CDRs aren’t bad. They’re actually good for newer investors, those starting with small amounts, or anyone uncomfortable dealing in U.S. currency. But they’re not revolutionary. And they’re not for everyone.

Want to Dive Deeper?

In the CDR Guide, you’ll learn:

How fractional investing works in practice
The complete list of all 86 CDRs available as of April 2025
How currency hedging affects your long-term returns
Why most high-quality dividend stocks aren’t available as CDRs
My complete breakdown on Norbert’s Gambit for CAD/USD conversion

Subscribe now to get your copy of the Canadian Depositary Receipts (CDRs) Guide.

Building an Income Portfolio Made Easy

“What if your dividend income was more than just a yield?”

We all dream of the same thing: freedom.

Whether that’s retiring comfortably, spending more time with family, or finally ticking off that epic trip to Tuscany — the goal is simple: build income that works for you, not the other way around.

But here’s the problem: Most people start their income journey with the wrong question:

“How much yield can I get?”

While it sounds like a smart starting point, this approach is more of a napkin calculation than a real investment plan. It sets you up to chase yield, walk into value traps, and — worst of all — risk your retirement income.

So let me walk you through a better way to build an income portfolio that’s built to last.

The Shift: From Yield Chasing to Dividend Growth Conviction

Let’s kill a myth right now: High yield does not equal high income security.

Just because a stock pays 7% doesn’t mean it deserves a place in your portfolio. High-yield stocks are often the market’s way of warning you — not rewarding you.

We’ve seen this movie before: A company offers a juicy dividend, everyone piles in… then the earnings drop, the dividend gets slashed, and suddenly you’ve lost both your income and your capital. That’s not income investing — that’s gambling dressed up as a paycheck.

Instead, I focus on dividend growers. These are companies that:

Grow their revenue (top-line strength)
Grow their earnings (bottom-line power)
And grow their dividend (shareholder commitment)

This is what we call the Dividend Triangle — and it’s the first thing I look for when building an income portfolio.

But let’s go one step deeper:
For retirees, dividend growth is what protects their lifestyle.

Here’s why:

🔒 It protects you from inflation.
Prices rise every year — groceries, gas, healthcare. A company that increases its dividend annually ensures your income keeps pace.
⏳ It guards against longevity risk.
You may live 25–30 years in retirement. If your income stays flat, your purchasing power will fall dramatically.
🛡️ It reflects a strong business model.
Companies that grow their dividend can only do so by increasing their profits and cash flow — year after year. This is your best defense against surprises.

“A 3% yield growing at 8% per year will beat a 6% yield that never grows — and do it with less risk.”

Imagine this:

You retire with a $1 million portfolio. You choose stable dividend growers paying an average of 3.5%, with a dividend growth rate of 7%. In 10 years, your income will nearly double — without you lifting a finger.

Now compare that to locking in a 6% yield with no growth. Ten years later, your income hasn’t changed — but your costs have. You’re forced to sell shares to keep up, and that’s where the retirement stress kicks in.

Dividend growth isn’t just about returns — it’s about peace of mind.

If this approach resonates with you — focusing on dividend growth instead of just chasing yield — you’ll want to dig deeper into the system I use to build reliable, inflation-resistant income streams.

From Theory to Action

That’s exactly why I created the Dividend Income for Life Guide. It breaks down the step-by-step process for building your dividend pension plan — no guesswork, no spreadsheets required.

Inside the guide, you’ll learn how to:

✅ Build a portfolio that generates growing income in retirement
✅ Apply the Dividend Triangle to select stronger companies
✅ Avoid common traps like over-diversification and yield chasing

📘 Ready to go from theory to action? Download the guide and start designing the income stream you’ll rely on for decades:

Start With This Core Strategy

If you’re new to building a dividend portfolio, here’s a simple formula I’d suggest using as your foundation:

1. Define Your Target Yield

Aim for a total portfolio yield of ~3–4%
This lets you combine lower-yielding growers with stable income generators

🔥 Pro Tip: It’s not about finding one perfect stock — it’s about building a team that works together.

2. Mix Yield with Growth

Create a blend like this:

Low yield, high growth: Apple, Visa, Couche-Tard
Moderate yield, consistent growth: Johnson & Johnson, BIP
High yield, low growth (if safe!): Selected REITs or utilities

If you can access a Stock Screener, use the Chowder Rule (Yield + 5yr Dividend Growth ≥ 9%) to screen your picks.

Sector Allocation: Balance for All Seasons

No single sector is recession-proof, but some bend instead of breaking.

There are 11 sectors that we can sort into three categories:

Income/stability: Sectors where you find many mature businesses that are recession-resistant.
Growth: Sectors where you find companies with multiple growth vectors, able to surge during economic booms.
Both: Sectors where you find companies balancing growth and stability.

Income/Stability Sectors	Growth Sectors	Sectors Balancing Both
Consumer Staples	Consumer Discretionary	Financials
REITs	Information Technology	Communication Services
Healthcare	Energy	Industrials
Utilities	Materials

Do I need to invest in all 11 sectors?

Not at all. You must invest in sectors that fit with your goals, i.e., stability vs growth, and that you understand.

There’s no point in investing in tech stocks if you have no clue how the semiconductor industry cycles work. You won’t be happy when investments are down, but if you understand the industry’s characteristics, you won’t panic.

How much to put in each sector?

⚠️ Pro Tip: Keep any one sector below 20–25% to reduce risk.

Again, there are no hard rules here. I like to have a maximum of 20% invested in my favorite sectors and around 10% in others. However, I sometimes go above 20% due to the great performance of a few companies.

I invest in various industries within the same sector to avoid being impacted by a single market event.

For example, there is a big difference between:

Having 25% invested in financial services spread across five Canadian Banks, with 5% in each one.
Having 5% in each of the following: Royal Bank (Canadian bank), BlackRock (asset management), Visa (payment processor), Great-West Life (life insurance), and Brookfield Corp (alternative asset management).

Number of stocks per sector?

That depends on how many stocks you want to hold and how many sectors you want to invest in.

You can select the best 2, 3, or 4 companies in each sector you want exposure to. That would likely lead to a portfolio of 20 to 40 stocks. Purely by chance, that’s very close to what I think is the ideal number of stocks.

Number of stocks in my portfolio?

Holding fewer than 20 stocks means the room for error is thin. This strategy could be great for high-conviction investors, but I prefer securing a bit more diversification.

Conversely, if you go above 40, you’re getting closer to building your own ETF. Monitoring 70 companies quarterly will prove daunting, and you’ll eventually miss information.

Also, if a stock represents 0.32% of your portfolio, even if it doubles in value or crashes by 80%, you will never feel it.

Dividend Income = Your Personal Pension Plan

If you’re retired — or planning to be — think of your dividend portfolio as a self-built pension plan.

Each dividend-paying stock you own is like a brick in your retirement income wall. And just like any wall, some bricks are stronger than others.

Companies that grow their dividends year after year are the reinforced bricks. They strengthen your income over time and help it keep up with inflation. On the other hand, high-yield stocks that don’t grow — or worse, cut their dividends — are like hollow bricks. They may look solid, but when pressure builds (like inflation or a market downturn), they crack.

This is why dividend growth matters more than yield. It’s not just about getting paid today — it’s about getting more income every year, without selling shares.

Think of dividend growth stocks as inflation-adjusted paycheques — just like a pension, but one you control.

Again, if your portfolio yields 3.5% today, and your holdings grow their dividends by 6–8% annually, your income will double roughly every 9–12 years. That’s the income security most traditional pensions can’t even match.

Bottom line: A strong dividend portfolio is built one solid, growing company at a time. Focus on quality. Focus on growth. And watch your income become as reliable — and rising — as a pension.

The Traps to Avoid

Now that you’ve got the building blocks of a strong dividend income portfolio, it’s just as important to know what not to do. Even the best strategy can fall apart if you let fear, noise, or impatience take the wheel.

Here are three common traps I see investors fall into — and how to avoid them:

Chasing High Yield
If it looks too good to be true… it probably is. Many of the worst dividend cuts started with “safe” 6%+ yields. Always check the dividend triangle before reaching for yield.
Over-diversification
Owning 50+ stocks doesn’t make you diversified — it just makes you tired. Stick to 20–40 quality holdings across sectors you understand and can monitor.
Waiting for a Pullback
Time in the market > timing the market. Invest when the company’s fundamentals support your thesis — not when CNBC says “buy.”

Final Thoughts: Income That Grows With You

Instead of asking:

“How much income can I generate today?”

Start asking:

“How much income can I grow over the next 10, 20, or 30 years?”

That’s the mindset that builds wealth and protects your retirement.

Start with dividend growers. Build a balanced portfolio. Stay consistent. Let time do its thing.

Ready to Begin?

If you’re not sure where to start, here’s your mini checklist:

✅ Review your current holdings: strong dividend triangle?
✅ Identify your sector gaps
✅ Set a yield-growth blend target

And remember — you’re not alone. We’re building dividend income for life, one stock at a time.

Want a complete roadmap to get started? Download the Dividend Income for Life Guide — it’s packed with real-world insights, simple strategies, and the exact framework we use to help thousands of investors retire with confidence.

This guide will help you:

✅ Build a reliable income stream — even during market volatility
✅ Avoid costly mistakes (like chasing yield or holding forever)
✅ Invest with clarity, not guesswork

Start building your retirement income plan today:

And remember — you’re not alone. We’re building dividend income for life, one stock at a time.

The Canadian Guide to ETF Investing: Simplicity, Security & Smart Income

If there’s one thing retirement should bring, it’s simplicity.

You’ve worked hard, saved diligently, and now it’s time to put your money to work—with minimal hassle and maximum peace of mind.

For Canadians investing for retirement, ETFs are one of the best-kept secrets in plain sight.

In this article, we’ll explore:

What ETFs are
How to use them in retirement
Why ETFs belong in your toolbox—but not your core plan
And how to avoid the #1 trap

Why ETFs Are the “Easy Button” for Retirees

Let’s be honest: once you retire, the last thing you want is to babysit a complex, high-maintenance portfolio. You don’t want to track 45 stocks or time the market. You want income, simplicity, and peace of mind.

That’s where ETFs (Exchange-Traded Funds) come in.

These low-cost, diversified bundles of investments are perfect for Canadians who want a hands-off strategy that still delivers results—and they’re especially powerful in retirement.

What Is an ETF?

An ETF is a basket of stocks, bonds, or both you buy on the stock exchange. Think of it like buying a package of investments in one easy trade.

You’ll find ETFs for nearly everything:

🇨🇦 Canadian dividend payers
🇺🇸 U.S. market leaders (e.g., S&P 500)
🌎 Global tech and emerging markets
💵 Bonds and fixed income
🧊 Even Cash ETFs (we’ll get to these soon)

Why retirees love them:
ETFs offer instant diversification, low fees, and fewer decisions to make. You can build a complete retirement portfolio with just one or two ETFs.

Looking for Retirement Income? Here’s Your Guide!

This free guide reviews 20 income-focused products. In the one-page summaries, we highlight the pros and cons, common mistakes to avoid, and who should use them.

We also created a rating system to highlight the difference between each product. The idea is to provide you with as much information as possible so you can make the right choice for your situation.

While there is no free lunch in finance, there are multiple ways to reach your retirement goals.

Download The Canadian Retiree’s Guide to Income-Producing Investments Now!

How Would I Invest $1M Using ETFs?

Let’s say I’m retired today with $1 million and want to keep it simple. Here’s how I’d break it down:

Option 1: Balanced & Reliable (60/40 mix)

60% equity ETFs for growth and dividends
40% bond ETFs for stability

📈 Goal: Generate $30K–$40K in annual income and preserve capital.

Example ETFs:

XEI.TO (Canadian dividends)
ZAG.TO (Canadian aggregate bonds)

Option 2: Growth-Focused (80/20 mix)

80% equities for long-term compounding
20% fixed income for cushion

Example ETFs:

VFV.TO (S&P 500)
XIU.TO (TSX 60)
ZAG.TO (bonds)

Option 3: All-in-One Simplicity

If I didn’t want to deal with asset allocation at all? I’d go with a single all-in-one ETF that already includes everything.

Top all-in-one picks:

VBAL (60/40)
VGRO (80/20)
XEQT (100% equity)
XGRO / ZGRO – Canadian alternatives

📌 Why I like them:

Global diversification
Automatic rebalancing
Extremely low MER (~0.25%)
Perfect for monthly withdrawals

Honestly, this is the strategy I’d hand to my spouse if she had to manage our finances solo.

To give you an idea of the returns an all-in-one ETF can offer, I have analyzed XEQT in the video below.

Where Do Cash ETFs Fit In?

Cash ETFs are like a high-interest savings account inside your brokerage account. They hold short-term government securities or T-bills and pay interest monthly.

🔍 When to use them:

Emergency fund
Cash reserve for the next 1–3 years of expenses
Temporary “parking spot” for your money

✅ Pros:

Very low risk
Highly liquid (sell anytime)
Monthly income

❌ Cons:

Modest returns that won’t keep up with inflation
Fully taxable as interest income (unless held in a TFSA/RRSP)
Not a growth tool—just a buffer

💡 Pro tip: Use Cash ETFs in a bucket strategy to smooth out withdrawals and avoid selling equities during downturns.

Don’t Overdo It: Avoid ETF Overload

One of the most common ETF investing mistakes? Buying too many. Here’s what happens:

“I’ll buy one Canadian dividend ETF… oh, and a U.S. dividend ETF… and maybe a global growth one… and a few sector ETFs… and—wait, why do I own 1,200 companies now?”

Here’s the truth: most ETFs already own hundreds (or thousands) of holdings. Buying more means duplication, higher fees, and decision fatigue.

🎯 Keep it tight:

1 ETF → All-in-one solution
2–3 ETFs → Perfectly fine for a balanced strategy
4+ → You better have a solid reason

Mike’s Simple ETF Selection Checklist

Whether you’re building a brand-new ETF portfolio or fine-tuning an existing one, this no-nonsense checklist will keep you on track:

✅ Start with your goal – Income, growth, or balanced?
✅ Stick with trusted providers – Vanguard, iShares, BMO, Horizons
✅ Compare MERs – Under 0.30% is ideal
✅ Check top holdings – Avoid overlap
✅ Currency exposure – Hedged or not? Know what you’re buying
✅ Assets Under Management (AUM) – Larger = more liquidity

Why All-In-One ETFs Are My Favourite Option for Retirees

I’ve said it before, and I’ll say it again: if I ever stop picking stocks, I’m going all-in on all-in-one ETFs.

They’re simple, cost-effective, globally diversified, and handle rebalancing for you. No spreadsheets, no second-guessing, no stress.

Imagine having just one line on your investment statement… and knowing it includes thousands of companies worldwide. That’s not just convenience—it’s smart portfolio design.

If you’re a retiree looking to draw income each month, all-in-one ETFs make it ridiculously easy. Just sell a few units when needed. Done.

Final Thoughts: Build a Retirement Portfolio That Works for You

Here’s what I’ve learned after more than a decade of working with dividend and ETF investors:

👉 You don’t need to make it complicated to be successful.
👉 The best portfolio is one you understand—and can stick with.
👉 ETFs give you instant access to diversification, low fees, and income.
👉 All-in-one ETFs are perfect for Canadians who want a hands-off solution.
👉 Cash ETFs aren’t the main dish, but they’re a great side.

And above all, remember: your plan only works if you actually follow it.

Don’t let perfectionism delay progress. Whether you build a 3-ETF mix or go with a single all-in-one fund, the key is to stay invested and consistent.

Learn More about 20 Income-Focused Products

Example of the ratings found in the free income-products guide.

With that in mind, remember to grab your free copy of The Canadian Retiree’s Guide to Income-Producing Investments! You’ll be well-aware of the pros and cons of each to make the best decision for your situation and goals.

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Canadian REITs Beginner’s Guide

Want exposure to real estate without the hassle of fixing leaky faucets or chasing tenants for rent? That’s where Canadian REITs come in. These high-yield investments offer steady income, inflation protection, and real estate exposure — minus the landlord stress.

Thanks to their unique tax structure, REITs are designed to return most of their income to shareholders, making them ideal for income-seeking investors.

What Are REITs & Why They Matter?

REITs are not only popular because they distribute generous dividends, but also because they’re easy to understand. Investors can picture an apartment building or an office tower and tenants paying their rent monthly. Investors are willing to purchase units of those businesses in exchange for the income and peace of mind.

The concept of being a landlord and having tenants is comparatively simple to understand. The company owns and manages real estate and receives rental income from properties such as apartment complexes, hospitals, office buildings, timber land, warehouses, hotels, and shopping malls.

Most REITs are equity REITs. They must invest most of their assets (75%) into real estate (properties) or cash equivalents. In other words, they cannot produce goods or provide services with their assets. They must generate 75% of their income from those real estate assets in the form of rent, interest on mortgages, or sales of properties.

REITs must also pay a minimum of 90% of their taxable income as dividends to shareholders each year. Therefore, the classic earnings per share (EPS) and dividend payout ratios don’t gauge an REIT’s health.

3 Types of REITs: Equity, Mortgage, and Hybrid

Equity REITs

Equity REITs own and invest in property. They may own a diversified set of properties, and they generate income primarily in rent payments from leasing their properties.

Mortgage REITs

Mortgage REITs, or mREITs for short, finance property. They generate income from interest on loans they make to finance property.

Hybrid REITs

Hybrid REITs do a bit of both, as they own property and finance property.

In general, REITs offer great investment opportunities by their nature. A growing economy leads to growing needs for properties. REITs can grow organically as the population requires more industrial facilities, healthcare centers, offices, and apartments.

Sub-Sector (Industry)

REIT – Diversified	REIT – Mortgage	REIT – Specialty
REIT – Healthcare Facilities	REIT – Office	Real Estate – Development
REIT – Hotel & Motel	REIT – Residential	Real Estate – Diversified
REIT – Industrial	REIT – Retail	Real Estate Services

The Hidden Strengths of REITs

REITs are unique as they distribute most of their income. In fact, they exist to pay generous distributions. This makes them one of the retirees’ favorite sectors!

Therefore, it’s easy to understand how most offer a relatively high dividend income. This is one of the rare sectors where you can find “relatively safe” stocks paying 5%, 6%, or even 7%+. Investors must be careful not to get too greedy, though. We have seen several REITs cut their dividends due to poor management or economic downturns.

REITs usually bring stability to a portfolio. It’s a great sector to start with if you want additional income. Real estate brings significant diversification to your portfolio. Research has proved that REITs are not directly correlated to stock market movements over the longer term.

Finally, since most of them operate with escalator contracts, they offer great protection against inflation. Many income trusts include yearly rent increases in their leases to ensure rental income matches inflation. Some REITs also use Triple-Net leases, where the tenants is responsible for insurance, taxes, and maintenance costs, thus reducing the REITs’ expenses (and risk of unexpected charges!).

REITs: The Risks You Need to Know

One of the REIT sectors’ favorite ways to finance their new projects is to issue more units. Therefore, if a company purchases a property generating $20M per year but needs to issue more units to finance the purchase, you must look at the net outcome for unitholders. If the FFO per share drops, this is not necessarily good for you as it will affect the REIT’s ability to increase its dividend in the future.

Another downside related to their business model is their lack of flexibility. We have often seen REITs try to shift their focus from one industry to another. In most cases (H&R, RioCan, Boardwalk, and Cominar, to name a few), the trajectory change comes with a dividend cut and a loss in value for unit holders. A REIT wishing to get rid of its shopping malls to buy more industrial properties will likely have to sell properties at a lower price and pay a hefty price to buy more appealing assets.

Finally, don’t make the mistake of thinking REITs are safer than other sectors. They are companies facing challenges while benefiting from tailwinds. While you may argue that an apartment building can’t go anywhere, I would answer that if you have one hundred empty apartments due to an oversupply in a neighborhood, your money will also go nowhere.

The REIT sector is best for income investors.

Target sector weight: For income-seeking investors, you can aim at 15% to 30% (if you invest in various industries). For growth investors, REITs could represent a 5%-15% portion of your portfolio.

Protect Your Portfolio: Canadian Rock Stars List

REITs can provide good income, but they are all part of the same sector. You need more diversification for your portfolio to be fully protected of market events.

I have created a list showing about 300 companies with growing revenue, earnings per share (EPS), and dividend growth trends. Focusing on trends rather than numbers gives you a better perspective on past, present, and future growth.

The Dividend Rock Stars List is the best place to start your stock research. Get it for free by entering your name and email below.

How to Analyze a REIT (The 3 Must-Know Metrics)

While REITs are among a short list of sectors that are perfect for retirees or other income-seeking investors, it is important to understand that they cannot be analyzed using the same metrics as other sectors.

Funds From Operations (FFO/AFFO)

The Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO) are probably the most valuable tools for analyzing a REIT’s financial performance. Those two metrics replace the earnings and adjusted earnings for a regular stock. While those are different metrics, it’s all about cash flow and the REITs’ ability to sustain their dividend payments.

Fortunately, we can find those metrics inside each REIT’s quarterly report and subsequent press release. It’s important to follow not only the total FFO/AFFO, but also the FFO/AFFO per share (or unit of ownership) rather than earnings per share (EPS) or adjusted earnings per share.

FFO = Earnings + Depreciation (Amortization) – Proceeds from Property Sales

AFFO = Earnings + Depreciation (Amortization) – Proceeds from Property Sales – Capital Expenditures

Loan to Value Ratio (LTV)

The loan-to-value ratio (LTV) is a great tool for analyzing the REIT’s future ability to raise low-cost capital. The LTV is easy to calculate from the financial statement, as you only need 2 measures of data:

LTV = Mortgage Amount / FMV of properties

You don’t want to invest in a REIT showing a high LTV. This means that their credit rating may be at risk and the price for future debt will be higher. In other words, it could mean less money for future dividends.

Net Asset Value (NAV)

The last metric to follow for REITs is Net Asset Value (NAV), which (usually shown in units) is equivalent to a price-to-book ratio.

NAV = Total Property Fair Market Value – Liabilities

The idea is to compare a few REITs from your list against one another. This is how you should be able to find the ones with the best metrics. A lower than industry NAV is either a riskier play or a value play. The AFFO and LTV will tell you which one it is.

Avoid This Common REIT Mistake

REITs are required to distribute at least 90% of their taxable income to investors, which makes traditional payout ratios less useful. The metrics you’re looking for is the Funds From Operations (FFO) and the Adjusted Funds From Operations (AFFO) payout ratios.

Funds from Operations Payout Ratio

Formula: DIVIDEND PER SHARE (DPS) / (ADJUSTED) FUNDS FROM OPERATIONS (FFO) PER SHARE

Because of REITs’ tax structure, adjusted funds from operations (AFFO or FFO) is a more precise metric. Like the payout and cash payout ratio, it’s always preferable to look at a long-term trend of the metrics over several years.

Pros: Similar to the cash payout ratio, this ratio clearly shows how much cash the company has to pay dividends.

Cons: In most cases, you can’t calculate the FFO payout ratio yourself or find it on general finance websites. You must rely on the company’s information found in their quarterly earnings reports. It requires additional time to establish a trend over several years.

How to Value a REIT Like a Pro

Valuing a REIT is like valuing any stock.

I generally use the Dividend Discount Model (DDM) to value them. However, some of the other REIT-specific metrics we’ve seen are also very valuable when valuing REITs.

Net Asset Value (NAV) is another estimate of intrinsic value. It’s the estimated market value of the portfolio of properties. One way to evaluate this value is to divide the current net income from the properties by a capitalization rate that’s fair for those types of properties. NAV can potentially understate the value of the properties because it might not capture value appreciation of properties during strong growth periods in the market. Compare the NAV to the price of the REIT.

We’ve seen that Funds from Operations (FFO) are far more important than net income for a REIT. Due to the tax structure of REITs, earnings mean almost nothing; instead, it’s all about cash flow. When calculating net income, depreciation is subtracted from revenues; depreciation is a non-cash item and might not represent a true change in the value of the company’s assets. FFO adds depreciation back to net income, providing a better idea of the cash income for a REIT.

Adjusted Funds from Operation (AFFO) is arguably the most accurate income measurement metric for REITs. AFFO takes FFO but then subtracts recurring capital expenditures on maintenance and improvements. It’s a non-GAAP measure but a very good gauge of the actual profitability and amount of cash flow available to pay out in dividends.

Overall, it’s good to look for REITs that have diversified properties, strong FFO and AFFO, and a good history of consistent dividend growth.

REIT advantages and disadvantages

Before presenting some of our picks for Canadian REITs, let’s sum up the advantages and disadvantages of REITs.

Advantages:

Usually have above-average dividend yields.
Are good protectors from inflation. Property values and rents increase over time if inflation occurs, but fixed-interest on the debt that finances the properties doesn’t.
Real estate, if managed conservatively, can be a reliable investment for income and in times of recession, assuming tenants pay their rent.

Disadvantages:

Often have lower dividend growth than companies in other sectors.
Generally use debt to add to their property portfolio, but their larger debt loads is used for conservative, appreciating assets.
Since they have to pay most of their income as dividends, they have little downside protection from recessions. They might have to trim the dividend if their cash flow dips below their distribution levels. There are, however, some REITs that have good track records of consistent dividend growth, despite market downturns.

For example, Granite REIT has consistently used conservative debt and escalator leases to grow dividends. Conversely, Northwest Healthcare REIT stumbled due to poor balance sheet management, overreliance on floating rate debt, and deteriorating cash flow, leading to a dividend cut in 2023.

GRT.UN.TO vs NHW.UN.TO 5-Year Dividend Triangle.

REIT Summary or Quick Reference Table

✅ REIT Cheat Sheet
Best For: Income-focused investors, retirees.
Top Metrics: FFO/AFFO, NAV, LTV.
Risks: Overconcentration, debt levels, and tenant health.
Watch For: Dividend sustainability and inflation-adjusted leases.

Top REIT Picks

Below are some of my favorite REITs in Canada, side-by-side. You can also find a complete description for each in this article.

Our top 3 favorite monthly REITs using the Stock Comparison Tool at Dividend Stocks Rock.

Get More Stock Ideas: The Canadian Rock Stars List

REITs can anchor your income portfolio — but they’re just one piece of the puzzle.

Explore our Canadian Rock Stars List to discover 300 dividend-growing stocks showing a positive dividend triangle (5-year revenue, earnings per share (EPS), and dividend growth trends) with filters.

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