Bill’s Blog | October 1, 2026
Fall is upon us and the glory of the leaves turning to their brilliant colors always put s a smile on my face each year. On a personal note, Tammie and I just got back from our first Alaskan cruise and we had a wonderful time and enjoyed the beauty of Alaska.
Market Update: Big Three Issues
- Global bond rates continue to increase putting pressure on over indebted governments, companies and individuals.
- Here in BC for the last 9 years the NDP government has rapidly expanded the provincial debt and adding to the decades of irresponsible Politian’s here are the consequences:
- BC’s $6.4-Billion Interest Bill: Billions Gone Before a Single Service Is Delivered!
- It’s irresponsible to stoke hysteria over spending cuts while ignoring BC’s soaring debt costs. BC will spend $6.4B on interest this year—enough for 32 secondary schools, 12,800 frontline ER doctors, or 35,500 police officers. In the 2028-2029 budget forecast for interest costs will exceed 8.2B! Quote from Michael Campbell
- Expect higher interest rates on all borrowing, including mortgage costs.
- Due to the war in the Middle East and the Iranians (IRGC) targeting Arab oil and fuel production facilities, their are serious diesel shortages and petroleum-refining by-products. The shortages have driven diesel prices up over 50% this year alone. This crisis with diesel impacts global transportation (Ships, trucks, rail, etc.) driving up transport costs and food prices. Inflation is here to stay for the foreseeable future and adjust your budget according.
- The stock markets have been extremely resilient despite the geopolitical crises, war, inflation and no trade deal in Canada. At some point reality will kick in, and a major market correction will occur most likely in 2027 to 2028.
So, you want to Retire?
I get it, as we get older our energy levels deletes faster, often accompanied by aches and pains or worse serious health issues. For some people retirement can’t come soon enough, and for others like myself I have no intention of full retirement, just slowing down a bit as I love what I do. One is not better that the other, but simply a matter of choice. But for today we will focus on the important planning required to have a meaningful retirement to mitigate financial stress, have solid financial strategies and life purpose in your later years. I will briefly discuss life purpose and several key components.
- If you lose your health, retirement becomes a major drag on yourself and others! Make sure you have a regular fitness routine. If this is new to you, make sure you discuss this with your medical team and get professional fitness coaching. I go to the gym twice weekly to do a full body workout with weights and resistance training. This is essential to maintain muscle strength, endurance and helps with better sleeping and mental health. I also add 3 to 4 cardio days to my week, between walking with my wife or a friend (45 minutes to an hour), hiking an hour or a bike ride. What I love to see is the growing commitment by grey hairs like myself on the Vedder trail, hiking trains and at the gym. Often their are 30 to 60 grey hairs (late 50’s to 80’s) working out, doing a fitness class or part of the pickle ball club. If this is not you, I encourage you to get started and the younger the better!
- What will be your life purposes in your retirement? Of course this will be made up of many components. (Social (family, friends, church, various clubs or interest groups). The key is to stay engaged in you later years with meaningful regular relationships. What will you contribute in your later years? This can be generous giving, mentoring young people, or serving others in a meaningful way. The key is staying engaged and using your gifts and talents and this creates ongoing purpose and meaning in life…essential!
- Make sure you you have a bucket list of adventures you want to achieve, and JUST DO IT! Whether it is travel, starting a new hobby or finally learning a new language or playing a musical instrument, etc. Have fun in your retirement!
- Many people retire and then go back to work part-time or re-engage in business. Why? Some out of boredom, some from not having a well thought out retirement plan and others out of financial necessity. Inflation is brutal when you are on a fixed income! If you have to go back to work, don’t beat yourself up! Just embrace it as a life adjustment and enjoy it.
Lets talk money and strategies:
- Have you built up sufficient funds to meaningfully retire? What is the magic number? There is none! It depends on the lifestyle and options you want in your later years. Some people are happy with a very simple life…great! Some people want to travel the world and have a big bucket list…well you will need lots of savings and investments! But, it is essential you develop a solid plan years ahead or better a decade plus before you want to retire.
- When should I take CPP and OAS? Again, it depends and it should be an important discussion with a knowledgeable financial advisor and possibly your accountant depending on your tax bracket and investments/savings before you pull the trigger. Most people are aware they can start CPP at age 60, but this has very significant financial costs if you start early! Why? From age 60 to 65 you would receive 56.25% increase in payment by deferring to age 65. From age 65 to 70. For each month you defer your pension increases by .7% or 8.4% per year. This works out to an increase of another 42% guaranteed pension for life. Also, the CPP is consumer inflation adjusted, so the longer you defer your pension the higher your payout. OAS does not start until age 65, but it to can be deferred until age 70. By doing this you will have a permanent increase in payment of 36% in the benefit for life. So, choosing when to receive your Canadian pension (which you have paid into your entire working life) is a very important decision as well as OAS! As of 2026 the maximum CPP payment is $1507.65 per month, but the average Canadian payout is $858.34 based on your contributions over your working life. The OAS payment is $751.97 per month, unless you exceed $95,323 of income in 2026 and then you will experience a clawback of the benefit (.15c per for every dollar over the limit). So planning and understanding when to take CPP and OAS is critical to your overall retirement plan.
- Next BIG questions: What is the proper sequence of depleting your savings and investments (RRSP/LIRA, Non-Registered Investments and TFSA?
- LIRA = a Locked-in Retirement Account). If you leave a company that had a retirement plan, and you decide to receive the money and invest it yourself or through a financial institution it become a LIRA. Each province has their own rules around when you can redeem some of the money or convert it to a LIF (similar to a RRIF
- Again without proper strategy this can have huge tax consequences. In almost all cases, it is best to start depleting your RRSP first by using a meltdown strategy as early as age 60 (especially if you have built up a large RRSP (over 500K). Why? Well, you have retired and now you need income. If you have built up a sizable RRSP, use this first when you are still in a low tax bracket, supplement with non-reg monies if needed and defer CPP and OAS as long as you can. If you have large RRSP and wait until age 71 to convert to a RRIF, you will most likely never use the majority of the RRIF and will have to give 40 to 50% of it to CRA upon your death or when your spouse passes away. Think of it, you have 1M in your RRIF at death about 500K plus goes to the government! Do you want that? Without proper planning that is exactly what will happen!
- If you are married in most cases it is best to convert your RRSP to a RRIF at age 65 (especially if your spouse is in low tax bracket). Why? At age 65 all kinds of wonderful tax credits and benefits occur. You can do income splitting with your spouse. The first $2000 of your pension is tax free, you receive another personal exemption on your taxes of over $9200 as of 2026. If you are in a very low tax bracket (check out he rules before you apply), you can apply for the Guaranteed Income Supplement (GIS) and this is a tax free monthly additional payment. Provinces also have additional benefits for low income individuals and well worth checking them out to see if you qualify.
- So you deplete or almost deplete your RRSP and or LIRA by age 70…great. Remember these are 100% taxable vehicles, and being in a low tax bracket you pay much less tax over your retirement. By supplementing with non-registered money you pay less tax. So by age 70 your CPP and OAS kick in at full benefits replacing your registered money and as long as your total income does not exceed the $95,323 you will not experience the OAS Clawback.
- So, if you still have non-reg monies at age 70, then use it to supplement your CCP and OAS when needed.
- What about your TFSA? This is your FUN and BIG expenditure account. This is your most valuable asset in Canada as it grows tax free and can be used anytime with NO tax consequences. There are a couple important rules around TFSA’s and if you want to know them, please reach out to me or do your own research. You are 68 years old and you want to purchase your last (most likely) car or travel vehicle. Use the TFSA as it does not add to taxable income. How about your dream trip, use your TFSA. You get the idea. Also, if you income exceeds your daily needs, add to your TFSA regularly or contribute annually (in 2026 is $7000).
So, as I mention several times, planning for retirement requires a lot of thought, time, planning and getting proper guidance. If you would ever like to have a discussion with me, please reach out.
Happy Autumn!
Bill Westmacott, Life insurance broker (BC) and wealth solutions provider.