The Wealthy Barber Podcast - #20 — Adam Bornn: Retirement Planning For Canadians

Episode Date: July 1, 2025

Our guest this episode is Adam Bornn—Founder and Managing Partner at Parallel Wealth, a Canadian financial planning firm that specializes in helping people retire with confidence. Adam also runs an educational YouTube channel (@ParallelWealth) with over 138,000 subscribers where he shares practical and approachable retirement advice for Canadians. In this conversation, Dave and Adam dive deep into the world of retirement planning—from understanding the “Go-Go, Slow-Go, and No-Go” phases of retirement to managing taxes through RRSP meltdowns to whether you really need $1 million to retire. Adam shares why retirees need a financial plan, common mistakes people make and how strategies like delaying CPP, TFSAs and even reverse mortgages can play a role in a well-structured retirement. If you’re planning for retirement—or even just starting to think about it—this episode is packed with insights, myths debunked and practical advice tailored to Canadian listeners.   Show Notes (00:00) Intro & Disclaimer (00:55) Intro to Adam Bornn (03:35) Why Did Adam Specialize in Retirement Planning? (05:23) Why Retirees Need a Financial Plan (10:45) The Go-Go, Slow-Go and No-Go Phases of Retirement (11:57) What is an RRSP Meltdown? (13:16)  Your Average Tax Rate Should Be Consistent Through Retirement (14:38) OAS Clawback (16:07) Do Reverse Mortgages Fit Into Retirement Plans? (17:08) Annuities (18:03) The “Die With Zero” Concept (19:11) Building Generational Wealth (20:44) People Underestimate How Long They’re Going to Live (22:44) Single Retirees Are at a Massive Disadvantage (23:57) When Does Whole Life Insurance Make Sense? (25:57) Most Retirees Need Stocks in Their Portfolios (27:33) Should You Plan for Large Late-Life Healthcare Costs? (29:41) Pre-Retirees Should Do Their Research (31:28) The Biggest Mistakes Adam Sees Retirees Make (32:20) Myth: You Need $X Number to Retire (33:01) TFSAs Add Flexibility for Retirees (34:56) Conclusion  

Hey, it's Dave Chilton, the wealthy barber and former dragon on Dragon's Den. Welcome to the Wealthy Barber Podcast, where we'll be hosting some of the top minds in the world of personal finance. Yes, that's to balance me out. The podcast is about making the subject not just easy to understand, but dare I say, even fun, honest. Whether you're trying to fund your retirement, figure out how to build a down payment,

save for your kids' education, manage debts, whatever, we'll be here to help you do it. Before we jump in, a quick but important note. Nothing we discuss here should be taken as investment advice. We don't know you and your personal financial situation, so we're not here to tell you. We're specifically to put your investment dollars. We're here to educate, get you thinking and we hope entertain. But please do your own research and or consult with your financial advisor before taking any action.

Hey everybody, it's Dave Chilton, the wealthy barber here with the wealthy barber podcast episode 20. First time I've known the episode number in quite some time. Excited about today, we have Adam Boranon from Parallel Wealth. Some of you know Adam. He is a YouTube star. He doesn't like being recognized that way, but he really is. He's built a huge following on YouTube. 138,000 subscribers, Canadian-only content. You have no idea how hard it is to hit that number with Canadian-only financial content. How do you do it? Excellent communicator, holistic thinker, really brings some of these ideas to light.

The retirement community in Canada has benefited significantly from his work. They really have. Why do we go get him to come on the show? I drove this. I like his videos. It's that simple. I watch them. I learn from them.

He often uses the software to back up his teachings to use his examples. They're excellent He's a very good comprehensive financial planner, but what he's become most known for is Retirement income planning helping people to optimize their situation. Why would you want to do that? Why not just take your income out of your riff and the minimum basis? Why not, you know do it wing it wing it, blah, blah, blah? Does it really make a difference? It does on a lot of fronts. Taxes.

If you put planning into this, you strategize the tax reductions you can get by laying all the sell properly are huge. Tens of thousands of dollars in many cases, hundreds of thousands of dollars in some cases, but it also allows you to plan so that your income matches up to your spending needs, which aren't consistent throughout retirement. It also matches up with your estate planning hopes. Do you want to leave a lot? Do you want to die with zero? All of these types of things come into play.

There's a lot here. And the biggest reason I have Adam on in this long introduction is I'm going to be very blunt and you listeners know I'm normally polite. The industry sucks at this. They really do. In fact, I would say more than half of the people with advisors aren't getting this advice. I don't mean they're getting bad advice. They're not getting any advice around optimizing their retirement planning incomes.

And so he has stepped into that void as an educator, not only to help the DIYers, but I think Adam's had a huge influence on the industry itself. A lot of the advisors out there watch his videos to learn the thinking, the software you need, et cetera, et cetera. So that was a pretty strong intro, Adam. You better live up to this.

If you're a bad guest now, we're both gonna look horrible. Nice to see you. Yeah, Dave, thanks so much for having me on. Really excited to be on the podcast and be part of this. So you've had some great guests on here and don't feel like I live up to it, but hopefully I can give some insight here to your viewership here. No, you really do. What drew you into the retirement income space?

You know, of all the different things you can do in the financial planning world, what called you there? It was actually supply and demand as far as during COVID back in 2020 is when we will launch the YouTube and when people started reaching out to us and the first video that kind of hit for us was a CPP video. And so it was actually like pre 2020, I got in the business in 2006. Up to that point, it was kind of, we were servicing everyone. And then 2020 onward, just our clients that came in and were reaching out to us for help,

it was continuously the retirement clients. So the baby boomers kind of 50, 55 plus. And so over the last few years, we've just fully geared in that space. And so basically 100% of our team's effort now is towards that retirement planning. And is it fee only financial planning? What does the service look like? Yeah. So we do a fee only or advice only financial planning.

So people that are looking for retirement plans, I would say our goal is to say, here's where you're at. Here's where you want to go. How do we get you there in the most efficient way? How do we reduce tasks, build a proper estate plan, help your kids or whatever else you have on the bucket list. That's what we're trying to accomplish without selling anything. We have no hidden agenda. We don't manage assets, anything like that. So, you know, for your typical Canadian, either they're DIY, which is great, but they haven't built out that retirement plan. So we can come alongside them and help them with

that measure. Or they're at the bank or financial institution and the person that has kind of managed their money to this point focuses more on the accumulation phase. Whereas we focus on the decumulation phase. And so a lot of clients come to us and work on that decumulation process with our team. You must see a lot of the common mistakes out there, but I would argue that a DIYer would struggle here. I mentioned to you off air, I did this for a friend 20 years ago and to do

it properly and more or less optimize this situation took me in no exaggeration, a little over 70 hours of work to work through all the scenarios. No software available at that time. You now have the software, unless an individual has access to it, experimenting with all the different approaches and fine tuning them to optimize for all these different burials, it'd be pretty tough. You really need help here, don't you?

You do, and I would say even if our clients had the software, I don't think they'd build great plans. And case in point is the large financial institutions use kind of the mainstream software nowadays, but as they take client data, they throw it in, they hit generate, and they say, here you go. But that doesn't mean the system has optimized for it. In fact, again and again, we get plans from your big financial institutions that have been done in one of these big programs, but the plan is awful.

There is no strategy there. And a lot of times, not all the time, good people work at bad institutions, I always say, but a lot of the time is, yeah time, good people work at bad institutions, I always say, but a lot of the time is, yeah, don't touch your money with us. Take your CPP at 60, your old age security 65. Spend everything else, but don't touch your money with us, because that's how we get paid. Well, you couldn't be more right. I think that drives some of this is that you've got some self-interest on behalf of the advisor.

But the other thing is, even those who rise above that and are thinking more about the client, the general rule used to be, and it wasn't right, leave the money in the register plans as long as you can so it can grow tax deferred. That was the only overriding strategy you ever heard. And often that's bad advice. Terrible advice. Yeah. I mean, we'll probably get into it here, but like delaying CPP, like that's kind of the people are understand like, okay, that makes sense, but that makes sense.

More when you actually then take that timeframe. So if you're retired 65 from 65 to 70, you need to now take that time and actually draw down your RSPs. Right. And if you went to anyone and said, look, I'll give you a guaranteed 8.4% rate of return. Most people would take it. But then when you tell them, look, you should delay CPP, they won't take that.

And there's this disconnect. So we're trying to really educate people. And like you said in the intro, a lot of people are taking what we're talking about, like, hey, you should do this. And here's proof behind it. It's not my personal opinion. It's just again and again, it seems to work really well for Canadians. Now, was I exaggerating when I said a lot of people are saving tens of thousands, if not hundreds of thousands

of dollars in taxes by strategizing properly? I would say our average client, I don't like to put a number behind it, but average is six figures. We did a video a few years ago of a client we saved over $6 million for, and we've since redone the plan and worked with them and massaged it.

We're at about $13 million of tax savings for one client. And this isn't a client with $13 million. It's just over time, estate planning, et cetera. We have clients come to us with $10,000 saved and a good defined benefit pension plan. So again, there's strategy and planning for everyone to the point where I tell them, I shouldn't mention on your podcast here, but I always tell clients when I talk to them, look, if you sign up for this and you walk away and you're like, that didn't help me or it was a bad experience, I'll give you your money back to them, look, if you sign up for this and you walk away and you're like, that didn't help me or it was a bad experience.

I'll give you your money back. Like we're here to help you and we're confident that we will, but you know, everyone, every situation there's money to be saved, taxes to be saved. And you know, people work hard. There were 30, 40, 50 years to get to retirement. It's a big event. And so, you know, I don't know how people enter into retirement with a proper plan. Like you need a plan, whether it's with us or someone else, but get a professional, unbiased

plan and, you know, it'll be worth its weight in gold for sure. I couldn't agree more. You know, I'm often asked, why didn't you write the wealthy barber for retirees, the retired barber? And I said, because you really can't. Unfortunately, every situation is different enough. The subtle nuances drive the process and so I could do some educating but I could almost mislead

people more than help them. You have to sit down over a desk or virtually you have to work through the software. All of our data is different. One of the reasons is and retirement is so different than traditional work where you're drawing a paycheck normally or an income from one source maybe two and now all of a sudden you're drawing a paycheck normally or an income from one source maybe two. And now all of a sudden you're in retirement between you and your spouse, you can have 10, 12, 14 different sources, two CPPs, OASs, defined benefit pension plan, RSPs, Beelzebub RSP, TFSA, et cetera, et cetera. This is complicated stuff.

Aligning all of this to optimize from a tax perspective. Yeah. And the biggest mistake people make is they look at everything in silos. So it's like, well, I have my CPP. When do I break even point for CPP? That changes when you add in all the other assets and incomes that you have. Right? So everything has to work together.

I always say it's take all your, you're right, 12, 15 income sources, sort it into a blender. And our job as a financial planner is to make sure it kind of comes out the bottom as tight as possible, meaning the most is coming back in your pocket and Least amount of taxes being paid but as soon as you start thinking about incomes Individually your plans failed when you look at your reports that you put out and and people who do what you do You'll often say total tax paid etc Is the software accounting for the fact that a tax dollar paid 10 years from now is not as harmful as a tax dollar paid now because the time value of money? Does it weave that into the analysis?

Yeah, we look at both real and nominal dollars. So yeah, that is weaved into there for sure. Growth of tax rates. Obviously the software we use kind of builds a lot of that into it so we can look at that. But yeah, that comes into play. One of the big factors we look at as well is kind of this laddered income strategy. So looking at look in retirement, you have what we call the go-go phase. And that's not something we call, I don't know who coined that, but I love it. Go-go phase is retirement date to about 75. That's when you're going to spend more money, right?

You're going to be able to travel or whatever your bucket. Let's a lot of people comment on our videos. Well, we don't travel. That's fine. You do something. You're going to spend more now than in your 70s, 80s, 90s. So build that ladder like the go-go, slow-go, no-go phase. You're spending more earlier and by spending more earlier, does that

mean you pay more tax a lot of the time? It doesn't. But that's why it's important to kind of understand how you're building up your nest eggs leading into retirement, kind of that runway up to retirement. So Adam, I have a huge advantage because my three phases will be no-go, no-go, and no-go, so really I think I'm ahead of the masses as I live this almost recuse of life in my house. I don't really have to worry too much.

Yeah, exactly. I've been loving like a 90 year old since I was 32. I honestly do. I'm not even saying this to be funny. I go to the restaurants before the seniors. I'm often there at 430 in the afternoon and I eat then and I head home and do whatever it is I do. So that makes a lot of sense.

The general thrust, we're not going to get involved in too many details. We're not going to walk through examples, but one of the big things is the RRSP meltdown and trying to gain access to some of your registered money before you normally would by doing the RIF transfer and taking out the minimum. Can you walk us through in general what that is? The RRSP meltdown is really how do we draw down your RRSP, your registered accounts?

Could be a Lira, RRSP, whatever it is, convert it to a RIF or a LIF. How do we draw down those accounts as quickly and as tax efficiently as possible? And that's the idea. And again, this is not a standalone process. This typically will tie into delaying your Canadian pension plan. So if we delay your Canadian pension plan, now we have more time. We don't have income. And a lot of people enter retirement and they say, well, I have a TFSA or I got a bunch of cash or sevens from work. I'm good

for a year or two. I'm gonna live off the cash. And they pay zero amount of tax. And in theory on paper, you think, well, paying zero tax sounds like a great thing. But when you actually build it out into a retirement plan over many years, it's actually not to your benefit. You will actually end up typically paying more taxes.

So RSP meltdown, again, you have to look at everything together. It's really drawing down that RRSP registered accounts more aggressively before you start, say, your CBP or old age security, depending on what age you retire now. Instinctively, I would think that if you could get your effective tax rate to be more or less equal throughout the years, that's not a bad way to try to optimize your situation. Does the math support that argument? Uh, 100%.

And so a lot of people say, well, will you review the plan we had done in the bank? No, I won't. But if I did look at it, I can tell if it's half decent by looking at your effect of your average tax rate. So yeah, if you're average, you're spot on there, Dave. If your average tax rate in retirement stays very level right through retirement and typically into your early to mid eighties when your RSP should be kind of melted out or spent off, and then it'll drop even more.

But you know, retirement to mid eighties, your tax rate should stay very level. And so when we build a plan, we want A, we want your tax rate to be very level. And if you're married or common law and there's someone else involved here, we want not only theirs to be level, but the two of yours to be very level. And if you're, you know, Merit or Klamalan, there's someone else involved here, we want not only theirs to be level, but the two of yours to be actually quite comparable. And it's typically within, I'd say 1% on each side. And people are also when you talk about taxes, people are often shocked of when they retire, they can have, you know, 80, $100,000 of household retirement income. And they're

paying single digit average tax rate. Like people are used to paying 20, 30, 40% tax. It's like, no, your average tax rate, I did what plan yesterday for client. They were at eight and 6% average tax rate and they had a very nice income in retirement. Yeah, that's impressive. Now, do you count the OAS clawback in essence as a tax? And you've obviously got to weigh that in all the math.

And I'm sure the software does that. Are people aware of that particular issue and they understand when you're trying to plan around it? I think so. Yeah. The clients coming into our office for sure. Like we've done a lot of videos on it. We talked about it a lot. Yeah.

Anytime, like when we build out a plan, if there is OAS clawback, the software will show how much clawback when it happens. You know, we'll rejig the plan to see can we avoid clawback? And we've had clients where, look, we can avoid it, but it actually costs you more money. You know, we've had some clients come to us for GIS. It's like, well, we've done some GIS planning. GIS guaranteed income supplement is really built for people that really do qualify for it. Whereas a lot of people try and, you know, I hate to use the word manipulate, but they

try and manipulate the system and try and get money. And we've actually built it out a few times. It takes a ton of time on our end. And it's like, yeah, you get this free money from the government and then you pay it all back and much more in taxes later on. So you're at a net negative. I have a friend who's done very well. He has $22 million in his RRSP and he is phoning me and saying to me, how can I get this

out of there and avoid the OAS clawback? And I said, I'm not sure that should be a top priority in your life, number one and number two, you can. Yeah. That's what keeps you up at night. You got to your life. And there's no math that's going to let you do that. Yeah.

So we do good work, but that would be a, that's, that's a magician there. Okay. Now we're going to do you do that. Yeah, we do good work, but that would be, that's magic in there. Okay, now we're gonna do something a little different. You go on and you do interviews, and again, you're very well-spoken, and you made a joke when we first contacted you, don't make me speak about taking CPP at age 70 forever, we're not going to do that.

Instead, what I'm gonna do right now is I'm gonna go through rapid fire, 10, 15 points, things that come up in retirement that you may be contemplating and you give me three or four sentences, your thoughts on them. So I'm putting it on the spot. We've done no prep work. We never do for any of this. No, we do.

We just, yeah, we do. We just take them on and we wing it. Okay. Number one, reverse mortgages. Yeah, they can work later on in life. There's better ways and worse ways to do it. I think in Canada here a lot of people are house rich cash poor and some sort of reverse mortgage whether it's a HELOC or other accessing equity in your home is going to be important for a lot of people and

we build that into plans for them and talk through I think a lot of it's just talking to you like psychologically what makes sense to you and what doesn't make sense for you on how you want to draw that out. Annuities. Canadians for the most part hate annuities. They are very tough sell. What are your thoughts on them? Do you ever see a use for them?

Go ahead. We've done them a few times for clients or recommended them a few times for clients. I'm not huge on annuities, although there's a lot of research that shows, you know, people are unwilling to spend down. If you're drawing money, say out of your RSP, they don't spend as much as they should be. Whereas an annuity is kind of, okay, I've committed to this. I'm getting the monthly cash flow. For some people, maybe not all your eggs in that basket, but for some of it to create

that constant cash flow and retirement, it's probably more of a psychological retirement decision versus a financial one. That's bang on. In fact, interestingly, there's some pretty good research in the last 10 years saying psychologically it's quite beneficial. It directly seems to impact people's happiness in retirement. So I'm always surprised when they're not a part of anybody's plans. I mean you just don't see them used much in Canada at all. Okay, next one, what do you think

about the book Die was Zero, the whole approach of dying with zero? We get it a lot. Obviously the biggest, and I know you talked to Rob Ingen on this too, is if we knew when you were dying, it'd make our job a lot easier. We could plan out perfectly for you exactly how much you should be spending. The concept of die with zero fits a lot of people

that don't have kids. And I think it's a great strategy. I think enjoy, the whole idea of die with Zero isn't to actually die with zero. It's enjoy life now. Don't wait to kind of spend it all or don't spend it all. I love the concept. I think a lot more people should actually be enjoying pre-, like there's a go-go phase.

There's the pre-go-go phase of travel and start doing your bucket list stuff even before you retire if you're able to. So I like the concept of die with zero if it fits you, but I find more and more people are actually the opposite of that, is they wanna die with lots of money to give to their kids and help their kids out along the way.

So while I love the concept, I would say probably 20, 15, 20% of our client base would fall under that category. I bought the book Die with Zero, and before I had a chance to even read it, my daughter threw it in the garbage. I wonder why. Yeah, she's very, very sharp. Now, you brought up the next one, giving money to kids. Are you seeing more and more of your clients doing that while they're still alive, helping out with down payments, etc.?

Yeah, and I think the previous generation was, you know, the 89- olds are dying with a lot of money in their past. I always say generational wealth is not passing money from a 90 year old to a 65 year old. It's passing money from a 65 year old to a 35 or 40 year old. And so that's a lot of the conversation we're having with our clients is once we build out a plan, instead of look, you have all the money you plan to spend and more. And that more, you can either give it to your kids when you pass away, or we can actually build into your plan how to give that off to show you how much and when and how to do it task efficiently.

So that's a massive part of the planning that we're doing. And I know other advisors across the country are doing is, how do we get this money to the next generation now without sacrificing your retirement? Yeah, that's really well said. And interestingly, to that point, I'm seeing a lot of people, say 80 plus, generation now without sacrificing your retirement. Yeah, that's really well said. And interestingly, to that point, I'm seeing a lot of people say 80 plus who are gifting the money directly to grandkids and not to their kids because their kids are late 50s.

They're already settled. They bought the home. They're heading toward their own retirements. They're trying to help out two generations below to get that first home, which as you know, is so, so difficult. Yeah. And I always tell people like sometimes clients will say, you know, we're getting an inheritance, we don't know how much can we just leave it out?

And I say, I prefer to leave it out because I'd prefer you actually pass that straight through to your kids. Right. Yeah. And so getting that mentality, like if you want to create generational wealth, pass money to 20 and 30 year olds, not to 50, 60 year olds. Yep. I couldn't agree with you more.

Okay. You brought up in one of the videos something I found very interesting. You talked about how life expectancies when you're dealing with some of your clients, they don't realize that there's a very good chance that one of the two spouses could live to be 90 plus. Canadians don't seem to have got there, even though all the evidence surrounds them.

They see their parents, other people living to that point. Do you have to fight through that a little bit? Is that something that affects their openness to some of these strategies? Oh, it's a huge factor because if we say, look, as a 65 year old, healthy, middle-class Canadian, the chances are one of you will be living into your 90s. Yet when we go through like the CPP, delaying CPP, it's like, you know, I just, I feel like I'm going to die when I'm 78. It's like, well, I don't care what you feel like. Like the stats are going to be what proves it.

And even family history, it's like, everyone in my family died early. That comes into it a little bit, but actually a lot less than people think. So yeah, the life expectancy discussion is one that our whole planning team has with our clients on a daily basis. I don't think that'll ever be solved.

People are worried about, well, you know, what if I die early? Especially, well, if you die early and you only took CPP for a few years and it is what it is. Now again, you're dead. Don't sweat it. Totally. Right. And especially single people.

It's like, well, you know, I'm not, you know, I'm spending down my money and then I die before I take CPP. It's like, okay. And right. Um, so again, you have to use statistics, but yeah, people vastly underestimate how long they're going to live. And I'm not sure why that is, but I think maybe we all do it, but yeah, if you're watching this and you're, you know, at 60, 65 year old couple, the chances are one of you will live well into your nineties.

I think it's a great point to reinforce because I think with AI and all the medical developments we're going to see in the next decade, there's a great point to reinforce because I think with AI and all the medical developments we're going to see in the next decade, there's a good chance that all of a sudden the average person may live to be much, much older than they are now and that you could have the second spouse dying at 105, 108, et cetera, which really will be a challenge by the way on the healthcare system, on the pension system, on everything else, but it's still something that has to be weighed to some extent. You brought up single, married.

When you do this retirement planning, is it not true that it's a lot easier for a couple to strategize and keep their taxes down than it is for a single person? They don't have the flexibility. I've done many videos on this and I can't do enough videos for single people. They always comment, do this for singles, because singles are already massive disadvantage in Canada here. Just the way our taxes are structured and drawdown and income. You know, a single person, I never liked to put a number behind it, but it's

typically 70 to 80% of the income needs as a couple, but you have no income splitting, you have no, you know, CPP survivor benefit pension. They're at such a disadvantage. In fact, if you look at your average Canadian, if a couple, your average tax rate will float in that single digit. A single person will float in typically 13 to 17% is what we see for our average single person. So you're paying a lot more tax, you know, average tax rate, but even total tax.

Like you're almost paying as much tax as a couple. So yeah, they're at a huge disadvantage in Canada. Agree totally. I mean, the math is pretty overwhelming. In fact, I like the example you just gave about the average tax rate. All that being said, I'm still not getting married, but I'm glad that you, you brought that to life. It's the thing, right? Like it's not like getting married, saving your money.

Let me tell you. All right. Cash value insurance. We don't have time to get into the ins and outs of how it works and buy term and invest the difference. But I want to ask you one retirement planning question. One use of cash value insurance is someone has a private corporation and they have retained earnings in the private corporation.

Does it not make sense on occasion to use that to buy cash value insurance to create an estate because of some of the tax laws in Canada? 100%. I have one myself. Now I would say it's for the 1% or less than 1%. It's not for the masses. And we see couples come in that are both T4 employees and someone's, an insurance salesperson has sold them this whole life policy. And it's like, look, this is not for you. This

is not what it was designed for. But yeah, if you have a company, you have some cash sitting in there, I would say it's a corporate TFSA account, right? Because money in a corporation, it's being invested, you're taxed at the highest rate from dollar one. And so how do we both shelter that and also pass it on tax free to the next generation, i.e. like a TFSA on the personal side. Well, you can use a whole life policy,

build up the cash value in there, and a gross tax deferred, but it also passes on tax free at death. So yeah, it's a very powerful tool. We've used it for a few clients or recommended it for a few clients over the years. Again, it's a very small percentage, but I always say when it makes sense, it makes sense. And we had a client actually last year, six months back and forth in their plan, and they're like, what about this if we do the whole life? And so, you know, we'll run it. Yep, still makes sense. And we, I think we we ran like 20 scenarios and every scenario made sense to do the whole light policy. And so again, if it makes sense, it makes sense.

If it doesn't, most people, it doesn't, but it is a powerful tool. Interesting. In most countries, it doesn't make sense because you don't get the same tax treatment, but in Canada it does. And again, it's for that select group of people. And still to all the listeners who are in their thirties and forties and have a max TFSAss and have a max RSPs and have non-deductible debt at high interest rates, buy term and invest the difference. Stick with that. But for those of you who are doing some estate planning and are older and have a corporation,

then take a look at this. Is it true that you really can't in most cases get where you want to go in retirement unless you keep some risk in your portfolio? You still have to have an equities component in a lot of cases. What percentage, for example, of your clients, now again, it varies with age, I'm sure, but are still using an equity component in their investment mix.

At most, I would say majority do, and the majority should. Well, we focus on a lot of the, I always say like the old school mentality was 60-40 or 50-50, you're worrying about some sort of equity to fix income split. The way that we approach it as a team and how we communicate with our clients is

once you have a good plan in place, you know how much money and where it's coming from. So put three years of that cashflow aside, not tied to the stock market. And that can be in bonds, GICs, high interest savings, whatever you want it in. The rest could be equity though. You don't need it for three plus years. And so I think equity needs to be a large component. For most Canadians, they haven't built up the big enough nest egg to what we call our mattress scenario, which is two and a half, inflation basically. So yeah, you need to have money in equities.

Now again, everyone's risk tolerance is a little bit different. This answer varies by client to risk tolerance and eating and all that. But I would say for the majority of Canadians, you need to have a good piece of your retirement savings in equities. And I think the fallacy that a lot of people fall into is, well, when I hit retirement, I need to de-risk.

Well, the reality is once you have a plan, you know how much money you need short-term, but most of your money money you're not touching for many, many years. It's not like you hit retirement and draw everything out. So you can still let your money work for you. You talked about the go-go years, the slow-go, the no-go, and as you lay out your spending patterns and build that into your projections, your software, et cetera. But what about the fact that late life healthcare costs now have risen dramatically in the last 10 to 20 years.

And so getting someone to come in home, for example, or in my case, we've had to have somebody help my father out overnights, that can be a tremendous amount of money. How is that factored in? You can't really guess at what it's going to be. The way that we look at it is one of two ways. For a lot of Canadians, you own your principal residence. So that's a huge asset for many of us. And that's something that we can lean on later in life. So if you're gonna go to a care facility, oftentimes you're selling that house. If you're a couple, one person's going,

there's still equity in there. Like we talked earlier about reverse mortgage. Like there's equity there that we can draw on. There's different ways to do that. So that's one way to look at it. The other way is, yeah, if you're someone that's rented through retirement, that is something that you may wanna plan ahead for. Again, the you're someone that's rented to retirement, that is something that you may want to plan ahead for.

Again, the percentage of people that need long-term care is very small here in Canada. So I think a lot of people worry about it a little bit too much. I get it can be a big cost, but I don't think you should sacrifice your earlier go-go years of retirement for fear of, well, I might have 10 years in a care home and I need to save up for that. That is, you know, that is small. And a lot of the care facilities, like public care facilities across the country, the amount you pay is based on your income, your taxable income, right? And that's where we're kind of drawing down your RSP. Like there's some tax strategies there as well. So it's typically a percentage of income. Well, you know, for a lot of people, if it's just your CPP and. Well, you know, for a lot of people,

if it's just your CPP and all the security at that point, it can be a nominal fee. Obviously, like you mentioned with your dad, if you have someone coming into your home, taking care of them, there's some costs to that. Typically that doesn't last for many, many years. So, you know, I would say don't sacrifice your current healthy retirement for a what if

that may never happen down the road? I'm just going to move in with my kids. That's my plan. And that's a great... My dad's back in town. He's like, you know, is your new house going to have space for me? I said, it'll have space. I'm not sure if it's for you, but it'll have space.

Yeah. Exactly. Exactly. Now you remember Daryl Diamond's book. Is that still a relevant book? I thought it was quite well done when it first came out. Have you read through it at all? Is it still out there?

I read it many, many years ago for people that are getting close to retirement. I encourage people to read, to watch as much information as they like, because everyone comes into retirement with some preconceived thoughts and process. And everyone does think about retirement different. Some people come in with, you know, I want the 4% rule. Some people have, you know, lower FP meltdowns. So again, come in with some ideas. So at least when you sit down with your advisor,

you have some knowledge and concepts behind what you think is best, right? Empower yourself before it. Don't come to your advisor with zero. You know, watch some YouTube videos, read some books like his to get some basic knowledge. that will definitely help your conversation when you sit down with your planner. Again, we have a lot of people reach out to us and say, yeah, you know, watch a lot of your videos, Adam and others, and it's talked about, you know,

delaying CPP, drawing down RFP, like all these strategies typically work for Canadians. I could then have that conversation because my planner didn't naturally build that out. So I said, well, what about this? What about this? So they came to the table with more knowledge. And so yeah, I'd say any book, any video, you can get good content from qualified people. It's always a good thing. Obviously, when you hit the YouTube space, there's a lot of unqualified people. So you have to be careful where you get your advice from, but engage in this community because as you walk into retirement, it is that shift right now. We say retirement's 10% financial, 90% psychological.

And a lot of that psychological shift is how do I spend? What am I going to do? I always say you need to retire to something, not from something. If you're retiring from work and to nothing, it's going to be a tough transition. No, I think that is really well said, couldn't agree more. Okay, three quickies to finish. Biggest financial mistake you see. I'll say two, people not spending enough early in retirement.

They hit the first couple of years of retirement and they're not spending enough. They hold their money too close to their chest. They're fearful of the future. So that's a big mistake. You only have so many years to kind of enjoy that. And then the CPP thing. Taking CPP, I think kind of the average age is age 62. I want to get that average age much later, beneficial for everybody.

So that, you know, something, again, it's not my personal preference. It's just the data shows that delaying it will give you more money. So why aren't more Canadians doing that? I'm with you. I studied that upside down about six months ago. I spent days and days and days and we want to get that average age up to 67, 68. You can't get it to 70 because some people are wise to take it early. They need it or they have such a health concern.

It makes sense from their perspective. Okay. I know that those were both very good ones. What about the biggest financial myth? A little bit different twist on that question. What is the thing you see people coming in thinking they know, but it's wrong? Yeah, we've been doing a lot of videos on them recently. Actually it's the whole idea of like, you know, I need $1.7 million to

retire or a million dollars to retire. There's this, this number, like if until I hit that number, in fact, I think it was the national post came out with one yesterday and it's like, I need this number to retire and we've been doing videos of the couple of retiring with a quarter million and they had a very nice income. So I think the myth is I need a certain number before I can retire. Whereas a lot of people if they just sat down with their planner and actually did a proper plan and mapped it out they'd realize you probably need a lot less than you think.

Okay, last point I want to cover. One of the things I loved about watching your videos was unlike a lot of people in this field, you recognize that even older people have lumped some expenses come up. Sometimes you have to buy a car at 78. Sometimes you have to get a new roof at 82. A lot of the plans don't recognize that because those things happen in life. Having a TFSA available to you late in life for that tax free withdrawal can make such a huge difference as you strategize around taxes and OAS clawback, et cetera. That is a big part of what you do and I think it's helped a lot of people.

Massively. Yeah, it's a flexibility. We did a plan as a team the other day and it was like, we weren't able to save the client any money, but we restructured their whole retirement cash flow and what it did is you know in the original you know plan from the bank their chair of the state was gone within five years what we did is we made sure that was there for future so and we showed them look your current plan if you had a $30,000 expense down the road it's all taxable income coming out now we've created flexibility so when you look at a plan yeah there's tax savings or cash, but that flexibility that you create, and again, some people save up

for these emergency or like, you know, I know I need a car down the road, they'll save for this on an ongoing basis. So they, you know, that's part of their ongoing cash flow, they save up for it. So, but some people it's like, no, when I need that new car and they need 30 or 50 or whatever the number is, I need to have that built into the plan as a one-time expense. So we always ask myself, how do you pay for these bigger events, expected or unexpected? And a lot of people will say, no, no, I build up a bit of a buffer on the side. Perfect. That's part of your ongoing cash flow. But if not, yeah, you need to have that in the plan or even test it. Like, again, you talk about stress testing for a plan, stress testing for a new roof, a new furnace a new car whatever it is where's that money

coming from and if RSP or registered money is the only option not a very good plan typically well said listen it's been a pleasure having you on it's funny we tape this at 10 o'clock in the morning but you're in Langley it's only seven o'clock out there you told me you'd already watched a podcast this morning you were having a conversation with your wife. What the heck's wrong with you? What'd you get up at 4 out there? Yeah.

4 30. I'm typically a six to five guy. Yeah. So, yeah. Oh wow. That's early getting going. What time do you go to bed? Oh, I hate to say it, but you talk about your, you know, I'm in my no-go

phase of sleeping here, so I'm usually in bed by about nine, nine thirties. That's pathetic, but thank you for coming on the show anyway. We'll just forget that. Anyway, really a pleasure and I love the videos. You're doing a great job. Thank you, Dave. Thanks for having me on. Really appreciate it.