The Wealthy Barber Podcast - #58 — Robb Engen (Returns): Retirement Advice for Regular Canadians

Episode Date: May 26, 2026

Our guest this episode is Robb Engen — a Qualified Associate Financial Planner (QAFP), advice-only financial planner and the longtime voice behind Boomer & Echo, one of Canada's most-read personal finance blogs. Robb returns to the show to share what he's learned helping regular Canadians plan, save and spend through retirement with confidence. In this episode, Dave and Robb take a deep dive into one of the biggest paradoxes in retirement planning: why so many Canadians who have done everything right are still afraid to spend their savings. They break down the "golden tax planning windows" in your sixties, the trade-offs between RRSP and TFSA withdrawals and why DIY retirement income planning is much harder than the accumulation years that came before it. Robb also explains how to budget for lumpy, one-time retirement expenses and why the current RRIF minimum withdrawal rules deserve a rethink, especially for single retirees. Whether you're approaching retirement, already there or just trying to think more clearly about decumulation, this episode is packed with practical, no-nonsense insights from one of Canada's most trusted personal finance voices.   Show Notes (00:00) Intro & Disclaimer (00:55) Intro to Robb Engen (03:15) The Longevity of Robb's Blog Boomer & Echo (05:56) Why Robb Focuses on "Regular Canadians" (09:12) The QAFP Designation (11:19) RRSP vs. TFSA: Retirement Tax Brackets & Delaying CPP (14:21) The Ideal Age to Start Retirement Planning (15:31) Why It's Hard to DIY Retirement Income Planning (17:28) Golden Tax Planning Windows in Your Sixties (19:17) Budgeting for Lumpy and One-Time Retirement Expenses (20:30) Rethinking RRIF Minimum Withdrawal Rules for Singles (23:22) Many Retirees Are Hesitant to Spend (25:13) How to Get Retirees to Safely Spend More (27:56) Countering Retirees' Fears of Overspending (29:25) Unlocking the Tax-Free Compounding Power of TFSAs (32:05) Is It Wise to Plan Around Worst-Case Monte Carlo Simulations? (33:55) Robb's Advice-Only Model (37:36) Will the AUM Model Come Under Pressure? (39:44) The Value of Advisory Continuity and Turnover Realities (41:15) Robb's Worries: Navigating Media Anxiety and Alternative Investments (43:51) Dave's Thoughts on Alternative Investments (46:05) "One More Year" Syndrome (48:00) Employer RRSP Matches (49:50) Conclusion

Hey, it's Dave Chilton, the wealthy barber and former Dragon on Dragon's Dent. Welcome to the Wealthy Barber podcast. Well, 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 this 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, will 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, it's Dave Chiltson, the Wealthy Barber with the Wealthy Barber podcast. I've said this many episodes, but thank you so much for tuning in, we have had great momentum over the last six months with the podcast. It seems to be growing week over week. The feedback has been through the roof positive. I think Canadians really were

much thirstier than any of us realized for kind of an unbiased source of information. We give a platform to the best and the brightest voices out there. And it's just worked from every perspective. And the feedback we've had from all of you has really helped to pick the next guest, to ask the right questions, to point towards topics you passionately care about. I think all of this has just worked well together. So thank you. And I hope you continue to tune in. We have another phenomenal guest today, a return guest.

Rob Engin, boomer and echo. Rob is one of the best in the industry. We knew when we started the podcast, he would be one of our first guests. He's been out writing since 2010, created a blog. Remember when blogs were the biggest thing going, a gifted communicator? To the point that I actually said to him before this interview started, how did you get that background? Were you a writer by trade, et cetera?

And he wasn't. He's just naturally skilled at communicating financial planning. But I'll tell you a couple interesting things about Rob. He is one of the most respected people in our field. And part of the reason is he's very nice. He answers questions when people ask him. When people in the industry have reached out to him, he always responds. I say he is the most happily married person on the planet.

When you see pictures of this guy and his wife, it's crazy how happy they look. They always look like they're united on all fronts. She may have a different opinion. and we'll get her on a future episode to get the truth about that. He's also cracked the code to use his expression on the lifestyle front. He could have been even bigger in terms of making money because he is so well respected, but he's got a great business where he helps a tremendous number of people, but can also strike the right balances with his family,

something he preaches to his client base as well. So I'm thrilled to have him on. I think you can tell I'm a big fan of him as the planner, him as the communicator, but also as the person. Rob, welcome back. Thanks so much for having me, David. It's a real honor. Well, you went over gangbusters our first time. Everybody loved what you had to say. And so let's see if you can live up to that again. I'm hoping this isn't a huge downturn where you go from a star on our podcast. Yeah, to collapsing. That wouldn't be. That wouldn't be good.

You know, I want to give you a little shout out about Boomer and Echo, the blog. It still has 250,000 monthly visitors. That's crazy in Canada. That's a huge number. It's a big number. And I guess it speaks to that if I, that people even now in a TikTok and YouTube and podcast world are still craving the written word sometimes. I think you can get into more nuance. You've talked about this in your short videos where you can't get into the nuances of certain things. And I think with the written word, you're just able to explain things. You can use charts and graphs and to just explain things a little bit better. And I take pride in being able to be a good communicator in plain language. Right. And I think that's what a lot of my readers over the years have appreciated is that I can distill something into sort of everyday language.

because it's sometimes a real complicated world, especially as you get into retirement. So I'm glad to see that people are still coming back. And you're right. I don't think writing a blog is as sexy as it was in 2010, even if it ever was. But I'm excited that people are still coming back. Well, I'll give you another piece of credit. You have done a great job of covering off those nuances and those exceptions. I was quite critical when blogs first took off of the fact that even some of the

bedger educators didn't do that. And so their advice would be appropriate. Their thoughts would be appropriate for, say, 80% of the reasons. but they didn't say but or watch out for this or you've got you naturally do that. I think a little bit like me, you have a subconscious fear of pushing people in the wrong direction and you compensate for that fear by making sure you do dive into those nuances. I wrote for quite a few years for the Toronto Star and in those articles you have to be really tight.

You do. You have seven or 800 words, maybe 600 words and so you can't cover off all the nuances. And that's why I like the blog where I can get into the weeds and it may be over explained a little too much. But I think people want that. Sometimes you just touch on things in a major news publication that you can't fully explain. But even still, I get some questions from readers like you explained all this, but what about me and my specific situation? I'm a single or I'm in unique circumstance.

It just goes to show you that you can't paint everything with one brush and everyone's situation is so, so unique. You know, it's funny as you bring up the I'm single. I can't believe how many people get mad at me because there aren't a lot of tricky things people can do when they're single in retirement. They can't do income splitting. And so they're saying, that's not fair Dave and da-da-da. You got to go like I didn't write the tax code. So I can't do a lot about it. Their point is well taken.

I'm just not sure why they're upset with me about it. Exactly. Yeah, I feel the same way. Same with home ownership or same, um, you know, just for two people with kids showing those situations because they're the most common and quite frankly, it's my situation, right? So I talk a lot about in my own situation and I can't obviously cover off every nuance in one blog post. No, for sure. Now, you left just writing and communicating and went in and opened up an advice-only financial planning firm,

and you've prospered and done very well. A few unique things about that. You only take on a certain kind of client. Talk to me a bit about that. Yes, I say that I work with regular Canadians with regular problems. And I think that is to mean someone with a T4 salary job, so they're not incorporated that. So you have basic RSP, TFSA, maybe a lira from an old job, maybe one of you has a defined benefit pension. Right. So the everyday mass market situation. I find that's an audience that really needs and

craves financial advice. They can't get it from the best financial planners out there in an assets under management model oftentimes because there's minimos. For sure. So they don't have enough assets to get that good advice. So they're left in the bank channel or they're left sort of fled them on their own and maybe making poor choices because of watching this fire hose of information or consuming this fire rows of information out there and it's not specific or unique to them. And so you're left floundering between sort of high fee, no advice through the bank branch or kind of on your own and maybe making some pretty bad mistakes. And so I've really zeroed in on that audience is I think they're being really underserved and quite frankly, you know, as a business

bottle, there's a lot of them. So if I can only get 150 or 200 of them reach out and we can work together, I think that's a pretty good business for me. And I'm able to help as many people as I think it's a fantastic business. And to your credit, you actually do turn aside business. So if someone comes to see you and they have a corporation and they have trusts and they have those types of things, you're saying that's not where my focus is. Try this person or move on. Not a lot of people actually do turn down the business. They talk about it, but they don't do it. So good for you. And I think through the blog and having readers reach out with different circumstances, right,

I want to help, but I can't help everybody and I have to be fair to that and fair to them. right, if I need to stay in my lane, so to speak. And so there's lots of great planners out there who really thrive in the complexity. I think like Julia, who you had on the podcast earlier, she says, bring me the complex. I love it. Right. And so, and there's lots of different advice only planning firms, even so if you like my message and you like my communication style, there's lots of good advice only planners. We're all singing from the same song sheet, so to speak, but they just might have a bit of a different expertise, whether that's working with U.S. citizens or someone with more complicated to state or trust or small business to complexities, right? So I want to just help steer you in the

right direction because it's fair to both of us. When I was young and I helped people do all this stuff, I hated the cross-border stuff, which is funny because I like detail work and I like math. I like all of that. But for some reason, I never got involved in all of that. And people ask me question about it. I say, I don't know. It's just not something I've become an expert on. So you're a little bit the same way you don't like dealing with the complex cross-border stuff. I think I want to help as many people as I can. And the more I get into the complexity, suddenly something I'm spending eight to 12 hours on. I'm now spending 20 to 30 hours on just to get every nuance right. And then I can't serve as many people. So I like to stick to those regular

people. And then that way we can follow a regular process, a regular pattern, and they can get a good advice that they need. Now, you made a point, you got in touch with me a few months ago and said, Dave, like what you're doing, but I think you've been a little unfair not talking about the QAFP designation. And I think you are right. So I took that criticism because I think it's bang on. Talk to me about that designation and how it actually has a lot of ump behind it. And for a lot of the advice only planners, it's really the one they most need. They don't have to go all the way to the higher levels, et cetera. Sure. So there, and there are a few designations that are maybe more cookie cutter that anybody can get with a few weeks of course material in an open book. So I would just want to

make it clear that the QAFP put out by Financial Planning Canada or FP Canada is all the CFPs take that exact same path. So we're all doing the same core curriculum. We write the same national exam. And then they go on to take advanced curriculum for corporations, estate planning, like more complex estate planning and trusts and that sort of thing. And so whereas the QAFP fits in right in that wheelhouse of here's this mass market, right? Regular people, regular problems. And we are perfectly adept to dealing with those situations, right? And so my complaint was simply that when the media puts out, you need to look for a planner and they need to have a CFP. You know, obviously that's the gold standard. Don't get me wrong, right? But then you're going up into this stratosphere of folks that

are working with sort of the 1% or maybe the top 10% of net worth. They're all chasing the same doctors, lawyers, engineers, professionals. And where are the people that are going to serve the mass market? And I think financial plan in Canada has recognized this and said, we want to make the QAFP, maybe more accessible to people who want to give good advice, but maybe don't want to go all the way to all those complexities and working. No, your point was well taken. And I'm glad we had a chance to talk about it. And I sometimes take criticism well. Moments before we went on air, Aiden told me he didn't like my shirt, that it was too much. And I didn't like that at all. I did not handle that criticism well at all, but your point is well taken.

All right, I want to jump all over the map when we first start. And then we're going to focus a little bit on retirement planning issues, retirement spending issues. But I want to talk about a few other things first. You and I've talked off camera a few times about the RRSP TFSA debate. And how people really don't understand it as well as they should. They've argued RSPs aren't very good, et cetera, et cetera. We said, oh my gosh, they're still a rock solid tool. and for many people, they're the tool of choice if you only can do one and you're saving for retirement.

I want to ask someone like you who is on the front line. You're actually at the kitchen table dealing with people. Is it not true that most people in retirement, most Canadians pay a much lower tax rate than they did in their working years still to this day? 100%. It is very rare that I see you in a higher tax bracket in retirement. It's one of those rare cases where this could be the incorporated individual with RSP and a corp to draw from. This could be a lot of cases where you continue working well into your 60s and maybe into your 70s. And now there's this collision of taxable income coming to you at 70, 71, 72 that you can't

stop. Right. Of course that's going to drive your tax rate up. But for people retiring late 50s, early 60s, who are doing some proper tax planning in their 60s, you can draw down your RSPs or tangent into RIFs and to draw those down at 65. take advantage of pension income splitting. Like, it is very rare that you are taking out money from your RSP and a higher marginal tax bracket. That's exactly right. And I've spoken to many other people in the industry who are doing the same things you are and they're all saying the same thing.

Obviously, there are exceptions. And there are some people who therefore maybe shouldn't have gone the RSP route if they're only doing one. But for most people, because you put it in at X and come out at less than X and you get all those years of compounding tax defer growth, the RSP is a wonderful vehicle that's become very misunderstood. Interestingly, since, since you're going to TFSAs came out because that's Sean a light on, oh, we have a tax-free vehicle. You pull it out tax-free and people haven't understood that you're going to have more in the RSP because, of course, the government is involved with the subsidy, etc. It's very frustrating to me.

I do think we're finally turning the corner now and more people are starting to get back to the basic math. What I've been using as an effective tool to communicate this is what do people hate more than not taking their CPP, maybe dying before they get their share of CPP, is dying. with a big riff balance and that all being taxed away, right? And so I said, well, we can play with those two. If you delay your CPP, assuming you have appropriate savings in your RSP, you delay your CPP till 70, you draw down, you use those years between retirement and age 70 to draw down your RSP. You get to bring that balance down. You get an enhanced CPP, like win-win right there.

So that seems to be going well. I was really pleased to see that the message of delaying CPP is starting to resonate. It's really slow. It's kind of like indexing in Canada. As far as investing goes, I think it was at 1.1% of people were delaying until 70 and now it's up to 7%. So we've got to take some credit. That message is finally resonating. But it's tools like that that you can use to take advantage of and help bring that RSP balance down so you're not faced with these tax consequences that you're afraid of. When people are looking at tax planning and retirement, trying to optimize their after tax income and blend all of their priorities. What age do you want to see them first start thinking about this? It's not age 63 and 66, obviously. When do they first really benefit from

taking a look at all the math? I think if you, obviously, it's like asking a barber if you need a hair count, right? Of course, everyone could benefit from planning at certain stages of life. But I think once he get into your 50s where there's maybe a 10 year runway, eight to 10 year runway away, one, you don't want to leave it too long that you might have been able to retire earlier. Right. So Let's do the work and put in a roadmap to follow so that maybe you can retire earlier than you ever thought. You certainly don't want to leave it too long and then you miss a window of opportunity that you could have done some good planning, good savings, habits, etc. So that 10 year runway, five years may be pushing it. A lot of people just reach out though and say, can I retire next year?

You get a lot of that. It's interesting. I do. Absolutely. Yeah. And I think that's just we're procrastinators by nature. And I think a lot of people who were pretty good savers probably know. They know that they can do it.

And now they're like, I probably should get some professional guidance and build that roadmap for me just to stress test this before I put in my resignation letter, which I think is perfectly fine. Now, you're the ultimate bias source here to use your barber point, but do you not agree that it's crazy to do retirement income planning on a do-it-yourself basis? There's a lot of moving parts here. In fact, you were the first guy in Canada. I give you a lot of credit for this where you started drawing attention to the fact there's a lot of income sources in retirement. For most of us, we had a T4. You get an income from one company. Now all of a sudden you've got a pension at work.

You may have government pensions, plural. You have spousal RSPs, RSPs, TFS, on and on and on. That needs planning. And people can't do this on a do-it-yourself basis. Even people like me with my background, I would be using the software. I wouldn't be doing pen to paper. I don't know how you can do it quite frankly without a proper plan and the software to model out different scenarios and drawdown strategies.

And not to over-optimize things, but just to get. the lay of the land. I mean, there's different accounts with different tax rules and some you can split and some you can't and some are taxed a certain ways. Some have to turn on at different ages, right? It's a complex world. And then times two, if you're coupled up, you could be looking at seven, eight, nine, ten, twelve different income streams. And nowhere is this more apparent than the defined contribution pension plan, right? That's so many people have been shifted into now and we're contributing to these DC plans at one of the big insurers. But what happens to it in retirement? it, right? I think a lot of people don't know it is actually a pension under that legislation. And so what does this turn into? It turns into a lira. Well, I can't draw from Alira. So it's got to turn into a lift. And what happens in certain provinces with a lift? Well, you can move a portion of it into an RSP. There's just things, little nuances there that people don't fully understand. And I don't know how you do it on your own, quite frankly. No, and you're going to make mistakes. In fact, this is one of those areas where somebody who's pretty well informed and pretty sharp suffers. The person who

knows nothing thinks I better get help. The person who's 80% of the way there goes, I think I can do this on my own and almost inevitably makes a mistake or two. I like the way, by the way, you framed your answer to the previous question when you said it's not so much your age, it's how far you think you are from retirement, etc. But in general, the more experienced I get, the older I get, I'm pushing people as early as age 50 to really get on top of this and start thinking it through, seek out expert guidance because to your point, they may be able to retire earlier, they may want to talk about all kinds of things. Plus, when you say with 100 something clients and you're looking, you're seeing the mistakes people make, some of the brilliant things they've done,

we can borrow that, we can lend that here. I can teach you about that. That kind of first 10 experience, they only have their own situation, whereas you have dozens, if not hundreds. I think I've written a thousand plans for just over a thousand plans now. Crazy. It is, but you learn a lot from it, especially when it's in that kind of regular people, regular problems niche. So you exactly, you get to see some of the pitfalls that people are coming up against. And I'll tell you the biggest one is sort of neglecting your 60s as proper tax planning. That is your golden tax planning window, right, to get funds out of RSPs, to do proper planning, to maybe

sell a rental property or an appreciated non-registered stock or fund. Right? There's so much you can do there while you can still move the puzzle pieces around because come age 70, 71, 72, there is an inevitable collision of taxable income coming. All the taps are turned on full black. more or less. And there's much less you can do at that point. So the more planning we can do ahead of that to get a proper tax plan strategy, retirement planning strategy in your 60s, I think the better off you'd be. You don't add him born at all. I think he is, I think he's done a good job of shining a light on that and that it's in the 60s that you do all of these types of things. And another reason you better start looking at them in your 50s. So you talk about that being

one common mistake. Let's talk about a few others, but what I want to bring up, I find a lot of people, especially the DIYers, but even some others, don't do a good job of budgeting for lump sum expenses that they're still going to have in retirement. You're still going to have to put a new roof on at some point. If you're staying in your home, you're still going to have to buy a car. It really helps to meld that into your tax planning. Where is that money going to come from? You've thought about it in advance so you can make it all part of the approach you're taking. Yeah, and I insist that my clients think through that. I always say there's four categories of one-time expenses that are going to come throughout a 30-year retirement.

there's vehicle replacement. There's home renovations or repairs planned or unplanned. There are financial gifts to maybe kids or grandkids or nieces and nephews. And then there might be the bucket list trip, right, that you've been waiting to do the African safari or the trip to New Zealand or the trip to Europe. So yeah, let's weave those into the plan to see where exactly they're going to be coming from. Is it TFSA? Is there some non-registered money? Are we sieving up for it in advance? I think it's crucial to think about it. Life doesn't move in a straight line. We can't just expect to spend 60,000 or 80,000 a year without those lumpy periodic one-time thing's happening. Very well said.

Okay, before we get to the hesitancy, people have to spend money in retirement, the primary reason we wanted to talk today. You've been talking a little bit lately about changing the minimum withdrawal rules on riffs. And you've made an argument, I think it was in a global mail piece if I'm not mistaken, that maybe we shouldn't go quite as far as some of the industry experts are arguing, confine it to a single people. Is that right? Yeah, that was the argument. So one is I was tired of getting hammered by the single people in the comment section saying you never write anything

fair about singles. So I said, well, what's some kind of carrot we could give for the singles out there? Who do face an unfair brunt of, you know, you don't get the pension splitting and more susceptible to OAS clawbacks paying higher tax because they just have a higher consumption than two people. What is that just makes sense? For sure. And then I was seeing the industry talk about lowering these RIF minimums, which always was puzzling to me because you save so much in your RSP throughout the years, you want to draw it down at a reasonable tax rate. You were so reluctant to actually make those withdrawals. And here, if you don't want to spend it, you don't have to spend it. It's just a withdrawal rate. You could put it in your TFSA or a portion of it. Right. So that really, you know,

kind of bugged me to hear that. And I think these are people that maybe didn't do proper planning in their 60s and now are faced with these, the inevitable collision of taxable income in their 70s. want that minimum to go down. And so it's, and it also speaks to a reluctance to tap into your principle, right? Because the minimums start to get pretty, pretty high. So I get that. So why not? Okay, I'll tap into the passion for wanting to lower those minimums, but put it into, like, channel it into someone who's actually getting some unfair treatment in maybe the tax code, which would be singles, right? And inevitably, I think the stat is all is about eight percent of OAS recipients are affected by the clawback. And I would bet you the vast majority of that would be

singles, right? Either widow, widowers or, you know, or a disproportionate share for sure, yeah. Yeah, for sure. And so this allowing a 25% reduction in the RIF minimum for singles, I think, would be easy to implement, quite frankly, because you can choose in, and you can choose the younger spouse's age. So there's obviously some mechanism in the mechanics of the withdrawal to be able to choose a lower age. So you can choose a lower age, just 25% less than age 71 or 72. And I think that would be a fair crack for singles. I brought this up with Fred Battest. Do you think we're ever going to see some older people get married just to take advantage of income splitting? They'll have a pre-nup in place, but I think we actually are. Like, it can make a big difference tax-wise. Yeah, I mean, no different

than you'd see the odd edge case of young people coupling up that just to combine finances to buy home when houses are so expensive. I can absolutely see retired singles joining forces to take advantage of pension income splitting. I joke about that carefully, obviously, with some of my single clients, That is your best tax planning tool is to get married. No, it's very true. Okay, well, I'm glad we got the single people in there. That takes a little pressure off me in our comments section underneath. Now, the big reason I wanted to get together with you today was you reached out to make a point that I'm hearing more and more often.

And that is that the wealthy barbers of the world and your great articles over the years, we've done a really good job of helping people to save. Many people are in quite a good position as they had a retirement. They don't want to spend the money. And they almost have more than they need and they won't grab at it. And they're not living the lifestyle they could or they could be giving some more monies to kids, et cetera. You've now looked at Die Was Zero, the big book out of the States and kind of thought there's some very good points in there and are melding it more into your teachings and your writings.

Go ahead and run with all that. There's good research that says people are reluctant to spend from their own savings. And David Blanchett in the U.S. said, you know, one was that retirees are twice as likely to spend from guaranteed sources like a pension or their government benefits. than they would be to withdraw the equivalent amount from their own savings, which just makes sense. We like watching the pile grow up. We do not like to withdraw and see that balance go down. But then the other part that I thought was interesting was that we focused so much on a 4% rule and retirees in the state 65-year-olds are withdrawing 2.1%. They're not touching even close to

the 4% rule. We've drawn 2.1% collectively. So we're vastly underspending. And I get it. In the U.S. too, they have some health challenges, health care challenges that maybe aren't as irrelevant. I feel they have to keep some back in the take. Yeah. For sure. But I think the research kind of shows we're reluctant to spend from our savings and really good savers. The spending muscle can atrophy really over many years. You taught a generation to pay yourself first. And I don't think they can stop, right? Which is a good habit to keep saving and keep maybe keep tucking away money in your TFSA. But I'm telling people in their 60s and 70s, if you are plowing money into a non-registered, account it is a sign flashing from the rooftops that you should probably be spending some more

money. Right. And so you see this with your clients quite frequently. And any common denominators is more likely to be a male or a female. Is there a certain age where they finally go, okay, I can spend now because I don't have that long to go. Like, are you seeing any kind of patterns at all? No, it's all over the map, male, female, couple singles. I think it's more speaks to your mentality growing up of whether you have a bit of a scarcity mindset. Maybe you went through something traumatic, whether that was your parents losing a business or their job, or I can go all the way back to childhood is why we become really good savers. And then again, that spending muscle just tends to atrophy, become known as your identity that I am a saver, right? And I save 25 or 35% of my income.

Even by nature of maxing out your RSP and your TFSA, you're already over 20%. Right. So if you're saving on top of that, you are a really good saver. When do you get to turn that into your lifetime of memories and enjoyment, et cetera. And I think by going through the exercise that we go through with my clients to build out a stress tested roadmap of their finances and say, look, even with some reasonably conservative numbers, you're spending 60,000, you have the capacity to spend 120. I'm not telling you to spend 120, but you can come out of the basement and up into the main floor now. Right. Yeah. And so, you know, that's what I'm trying to sort of nudge people into saying is like, look at this capacity. We've stress tested the heck out of this and you're going to be okay.

In that David Blanchett study about the 2.1% drawdown, he said that the top 20% of net worth, so not top 1%, but top 20% of net worths, could spend over a million dollars more over a 30-year period and still be perfectly okay, right? And so then you think about that and you say, well, what will I do with that? It doesn't have to, I don't have to become a different person. It means that if I'm used to staying out of Best Western, I can maybe stay at the four seasons, right, and Spurge. Or if I'm always flying economy, I can bump that up to premium or, business or help the kids a little bit more. I can help the kids out a little bit more. It doesn't

all have to be on yourself. It doesn't have to be on travel. It is whatever brings you joy or whatever you can help pass down to the next generation because at the end of the day, someone else is going to get your money, the government, your beneficiaries, right? And so how are you going to use that throughout your lifetime as a tool to kind of maximize your life enjoyment? My father should teach courses on this. He has no issue spending it all because he figures I'll be there as the safeguard if it all goes very poorly. In fact, he's even going to step past that. And he's even going to step past that. He gets me to spend it now for him. He goes, you get this dinner, you get this dinner, you get this dinner. I think the guy owes me $20,000 in dinners. I'm unlikely to see any of it.

So he's really got it figured out. And so does my daughter, by the way. I've mentioned before, I bought the book, Die Was Zero. Before I had a chance to read it, she threw it out. So she's on top of this too. The other way, I've got them coming at me from all angles. That's really really in the sandwich generation. Yeah, exactly. When you deal with your clients, though, they have some legitimate fears. Some will counter that, okay, we've had very strong stock market returns for the most part, for an extended period of time. When you've got these kinds of valuations, we could be looking at subdued returns

for the next five to 10 years. We have to factor that into our projections. Also, health care, yes, we have universal health care in Canada, but if I need assist the living, either coming into my home or going into an assist the living facility and we're living to be sold in many cases, this can all add up to a tremendous amount of money. And they use that fear, legitimate fear,

to drive some of their decisions. How do you counter those arguments? Yeah, and again, I'm not saying, you know, Yolo and literally die with zero. I'm just saying like a reasonable margin of safety, right? And that could be some full or pretty full TFSAs and your primary residence, right? And it's a pretty good backstop to your financial worries, right? I'm more worried. Markets go up and down. We know that. Right. I'm more worried about inflation, right? And how do we protect against inflation and the death by a thousand cuts? Or 2022 and 2023, not a, you take hundred of those

cuts all at once. And so, like, I'll give you an example. one of my clients recently, they're part of a pension, but that pension has offers no inflation protection. And if she would have retired in 2021, right? Suddenly in 2022, 2022, she's lost 12% of her purchasing power right off the bat in early retirement. So how do we protect against that? That's where we lean on the CPP and OAS and how do we maximize those benefits. It's not being too conservative with your investments. I tell my clients, like you need as much equity risk as you can stock, right? Yes. That could be 50, 60% for some. It could be. be much higher for others so that your stock, your portfolio is outpacing inflation. You don't

just go to cash and expect that to last you for 30 years. And then lastly is that I find even the more wealthy clients that I'm working with are investing very conservatively in their TFSAs, right? And I think this is a tragedy because we're harnessing this account, this tax-free account that you're probably never going to touch, quite frankly, right? You were continuing to contribute to it with excess withdrawal, excess cash flow. You could think of yourself like a 30-year-old. in this account and maybe invest like a 30-year-old would with a long-time horizon while being conservative in your RSP, in maybe your non-registered account, having your cash wedge and helping facilitate those withdrawals over to get you through some rocky markets, right? So we just, we take a look at that

whole picture. We leave reasonable margins of safety. We try to fight inflation with good inflation protected income sources like CTP and OAS or if they have a defined benefit pension with inflation protection. We invest in stocks as much as you're willing to stomach. And then we see where do you stand? And again, if it's like we can still increase spending by $20,000 a year, now we're talking. How do we do that? How do we do that so that you can enjoy the lifestyle that you've saved all these years for? You know, great examples. It's interesting that the TFSA conservative investing is one of the things that drew me back in to financial education. I would see so many friends kids, financial plans, investment. They'd say, take a quick.

look at this. First, I was amazed at how few knew about FHSAs their first year or two. Like, remarkable. They were still saving for down payment, didn't know about them. But when you see people's TFSAs young and old, to your point, it's amazing how conservatively invested they are. There's all kinds of people out there, no exaggeration, who've had their TFSAs going for 10, 15 years and it more or less kept it in cash the entire time. That is common in Canada to see that. Wacky. The opportunity cost is huge. And listen, I'm not one to just say, your TFSA is this legacy fund that you can never touch. If you want to use it to improve your life or give to your kids at strategic times of life or whatever the case is,

I'm a perfect example. I'm on round three of filling back up my TFSA, right? But at the same time, you can take some calculated risk. I'm not telling you to pick mean stocks and crypto. Of course not. I'm just saying global growth fund, low cost growth fund, it was going to give you a higher expected return. And if you don't need to touch the funds for many years, decades even, if ever,

why not harness the tax-free compounding nature of that account? It's a real gift to retirees. You know, you used a couple expressions earlier, cushion, margin of safety, and just so for our listeners again, when Rob's talking about being somewhat more aggressive than your retirement saving, remember he's using software and all of his expertise and experience

and laying out a variety of scenarios, including worst-case scenarios in terms of very subdued market performance, etc., to say, even if that happens, if we've got it structured in the following way, you can probably spend more than you are right now. And we're seeing a lot of people spending under that worst case scenario projection set. Under the worst case scenario. And I think some other planners have said this. I think Jason Heath, who was on your podcast before, has said this in a previous article, which is our just kind of pondering. Like our financial planners may be doing a disservice to our retired clients by showing,

throwing all these worst case scenarios. If you get hit with a great depression followed by the high inflation of the 70s followed by two world wars, then your portfolio is going to fail. Well, okay. But in so many of those Monte Carlo simulations, we end up with double the size of the portfolio, the starting balance. So we've got to find some reasonable balance. And where I stand on that or lean into that is we rerun the calculations every year, right? We retest the ceiling, right? We retest the ceiling. And listen, if you're spending 80,000 and your capacity says you can spend one to one. And we have a market pullback. guess what? We'll rerun the ceiling and it might say your new capacity is 108. Well, you're still spending 80. Do you don't need to make any changes to your plan? It's the ones who have less

margin of safety, right? I'm spending 80, but my ceiling's 87. Right. They have to be much more careful, right? We need to be much more prudent in the planning rather than you've got this $50,000 or $60,000 a year cushion. I'm just saying, take that extra trip or consider helping out your kids a little bit earlier. You know, I'm glad you brought up the ongoing assessments because we're asked a lot when we have advice only planners on like you. How does that model work? They go and they sit down with you and they often deal with you virtually nowadays and you construct the initial financial plan. How do they take care of the implementation and how do they get the ongoing guidance, life changes and different performance figures result? Walk us through the big picture of the model, not just the original sit down. My version of advice only planning is I'm with my clients for one year.

Okay. So it's not just one projection and one meeting and then off you go into the wild. I'm with you for a year. So there's help with implementation. I'm advice only. So I can't click the buttons for you. I can't walk into a bank branch with you. Right. But I'm giving advice to my best capabilities. I'm there to bounce ideas off of those, ask questions, etc. throughout the year. I'll even do an update in January, right, because our year always will overlap a calendar year just to put 2026 behind us and update the plan fresh for 2027 and beyond. Other pliers are going to kill me for saying that because they probably don't want to do that. Now they have to do it. Yeah. But anyways, so there is that update and that refresh. And in most cases, Dave, in my practice, it's a one-year engagement. So I'm not looking to say you are hooked to me for life on an annual basis with a retainer. Now, some, I do have a growing roster of people on retainer.

Either they like having access to an unbiased advisor who they can bounce ideas off of and ask questions. They like the continuity of keeping their plan up to date and fall. It keeps them motivated. So I totally get that and I have a growing roster of clients like that. But in most cases, my philosophy is that if you can get behind the idea of pairing low cost, do it yourself investing with on demand financial planning advice at key life stages, which could be every three to five to seven years, depending on your age and stage of life. And that's a pretty good recipe for good financial outcomes. You keep your cost low when things are on autopilot. You come for professional guidance when you need big life changes or goals have changed or you just need another check-in on where you're at.

And so that's the model I'm seeing. And so now that I've been doing this long enough, people that had reached out to me in 2022 or 2023 are reaching back out again for that refresh. Right. And so I like that model because, again, I'm a bleeding heart and I want to help people and I don't want to necessarily siphon off a percentage of their money every year. If things are on autopilot, there's no need to pay for ongoing. advice, right, as long as things are set up properly and you've got your plan to follow. But every so often you need a check-in, you need an update. Goals change. We change as people, right? I want to-

divorce sets in or you have twins or so many things can happen. The people who are on retainer and are coming to you every year, some of that is more psychological. I think they want to just see you to make sure things are going well. They find a certain piece of mind with that. It's not there's going to be major changes taking place every year. They just want some handholding. And that makes sense to me, too. That's a big value. you at? It's the big question at the end of every indigent, which is, or at the beginning of it, is, are, am I going to be okay? Right? And I think a lot of people just need that reassurance, maybe more often than others do, just with everything going on in the world. So you kind of get

pulled into the news cycle and just look at the last six years have been a lot of change, right? And so, yeah, of course, you want to know if you're going to be okay. Are you still recommending the same things that you recommended five years ago? I mean, that's a fair question. Absolutely. That's why I keep the blog up to date is like me talking to a big swath of clients past and present of my thinking. And I don't change my mind that often. But if the information changes, I'll change my mind. And I'm going to report it through the blog. And so people get this sort of ongoing newsletter, ongoing communication tool to kind of see what is going on.

Now, again, you're very biased here. And our listeners have to be careful of that. But do you not think there's a bit of a shift taking place where a lot of the even well to do are looking at these models and thinking, I'm not sure I want to go the A, U.M route and pay, let's say, 60 basis points a year. And they've got $10 million. So they're paying $60,000 a year. And they're thinking, I can go to a competent financial planner. And let's say it's someone who specializes in corpse and trusts and everything else. And $15,000, but I only pay it once every few years. And again, I'm getting completely unbiased advice. Now, again, a lot of

the AUM people, we have many in the show, are amazing, like incredibly competent, doing a wonderful job. But the cost structures are fairly different. And do you think we're going to see more pressure on either margins on the AUM model or we might even see more and more of the affluent moving over to the advice only model. I think it's you got to be careful there because there's a business model I think for everybody. There's a lot of delegators out there who just like finance is complicated. It's not just about buying an index fund and then I'm good, right? Like you need detailed financial planning advice. If your situation's complicated, if there's intergenerational wealth being transferred and businesses and whatnot, like you need competent advice and the end, some

continuity with an advisor who can kind of walk you through and steer. you through that process. So some are happy to do some their self, whether that's buying an index fund and then getting financial planning guidance. And there's always going to be delegators, right? They just can't be bothered. They're good savers. They make good income, but they just cannot be bothered to actually do the implementation. So there's always going to be a world for both. And where I would be careful is the, and I, you had asked me at the top about I turn away a lot of business. Well, a lot of people reach out because they go fee hunting, right? And they're really well off. And they're reaching out to me because my fee is really reasonable. While my is reasonable because it's for these people, right? It's for these regular people, regular problems. And so you're going to pay $10,000, $15,000, $20,000 for a plan with a very complex situation. And you can't be afraid of that because, you know, it's a great deal in many instances. Yes, absolutely. And in the AUM model, you're paying it anyways, right? So if you want proper advice, you're going to have to pay in one form of the other. It's just what role are you willing to play in that? It's interesting you bring up the word continuity because just recently I was

thinking about friends and colleagues I've had who've really benefited from their relationship with their advisor. The advisor's done a strong job over the years and they prospered together, et cetera. Boy, continuity was a constant when I looked at that, if you pardon, that poor sentence structure in that they weren't switching advisors over the years. They were staying with that same person or that same team as maybe one person retired. I think that's more important than we often think it is. Yeah, and I hear it at the bank branch level. If you were working with someone there, the turnover is pretty, yeah, it's pretty big there. And so then you always feel like you're having to explain your situation all over again and just start from zero. So the continuity is big. And I wondered

about that with my model because of the one and done and then maybe come back to me after three, four years. But I have friends who haven't seen in two, three years. And then we get together like it's nothing, right? And so, and again, if they're following me on social media and through the blog, it's kind of like we never really left and people are always staying in touch via email anyways. So I think people get it that they don't necessarily have to pay to have that relationship. They can come back into an official engagement every few years. And that's totally fine. You know what I am getting?

And maybe it's my hair graying. But I'm getting this question more and more that I haven't had before, which is, how long are you going to be doing this? Which is a fair question. And I haven't turned 47 yet this summer. But see, I plan on doing this for a long time for anyone who's wondering. Well, you're ahead of me. People say to me, how long are you going to be alive, Dave?

So at least they're, you know, implying you're going to be around for a long. on time. So what worries you right now? Like when you're dealing with your clients, is there some angst out there. The world is very much appearing to be in turmoil. The news is coming out is so fast, so furious, often so negative. Are your clients feeling that and do they bring that to the table? Yeah, a lot of anxiety. The news, just if you get addicted to that news cycle, it can be pretty anxiety inducing, right? I kind of dread every March now, because it seems like for the last six years, every March or something, right? COVID. The last one of the 2022 bear market kind of got going. And the 2008 and then absolutely. Yeah, exactly. So I kind of dread March,

right, after RSP season. But there's a couple things that bother me, especially as an advice only planner, because I'm not doing the implementation. So I want to say, I like the idea of buying an asset allocation ETF and then getting planning advice. I think that's a good marriage, right? But not everyone is cut out to do it. So I do work with lots of people. It's not a prerequisite to work with me. I do work with a lot of folks who have an advised relationship and manage to manage their investments. What concerns me there is the shift towards alternative investments. I'm seeing a lot of problems there. Money just disappearing. Money gated. It concerns me how much money is being put into these alternative investments. And I think it's under the guise of public markets are really

expensive. So come over here and you can get this great yield. Well, yeah, but then I give up liquidity and I just kind of this black box underneath the hood that I can't see. And I've seen some real problems where, you know, $200, $250,000 just poof disappears out of your plan. right, because you can get access to the money. And then on the self-directed side, I just worry that there's just so much. And the gambling, the prediction markets, the crypto, the chasing, always the next thing, right? It just, you just can't help yourself. And not sure if you ever had Andrew Hallam on the podcast of the Milliman. I'm a big fan of his. So his initial book, he talked about these different rules. And one of them was, because he used to be a stock picker. And one of those rules was

for the folk, you should be indexing, but for the ones who just can't help themselves, here's some And in this updated version, he took out to that chapter. And I totally agree with that because I think that you should just stay away, right? No more 2%, 5%, 10% of your portfolio for play money. You work hard to make that contribution. And then you're basically gambling it on some speculative bet, right? We agonize, what kills me is we agonized over MER, right, the costs of our investments. Right.

But then turn around and play with a few thousand dollars and just blow it. And it goes to zero and we're like, oh, well, easy come, easy. go, it just doesn't make any sense to me, right? So just be boring. And I know it doesn't make great party conversations, but buy your index fund for as cheap as possible and move on with your life. Rob, you sound exactly like me there. And again, the funny thing is I'm drawn to a lot of those types of investments because I love due diligence and I like studying all of it, but I've watched so many friends and colleagues do so poorly when doing that. In essence, they've been giving their money away. It's not even gambling. It's giving. And we've seen young males, as I've talked about,

repeatedly on the podcast, especially drawn in to all of that. The prediction markets just make me shake my head. It's fascinating some of the data we've seen out of the U.S. platforms about how poorly people have done with their meme stock trading, their option trading, they've done disastrously. And that's during a relatively good market. Can you imagine if markets turn? So I couldn't agree with you more on all of that. I think it's absolute craziness. But let's go back to alternative investments. That's an area that for years I focused a lot of my energy on. I can. can't believe how lack some of the due diligence has been from some of the firms selling the alternative investments, like frankly, embarrassingly bad and miss some things that they should have caught

fairly early. You're talking about the gating, which we're seeing more and more of. I like the alternative investment space, but it's expensive. You know, the fee laddering on it is very high and often, even if it works out, it's not that exciting because there's so many fees coming out that the returns aren't that good. And again, the diversification is nice, but it's offset by the liquidity concerns, et cetera. I think over time the marketplace is awakened to the fact that is not an easy spot to make money. And, you know, I've done a lot of private company investing over the years. Well, 99.9% of Canadians should never do that. There's no liquidity. You have to be studying these companies. You have to have a lot of experience. You have to understand the accounting, etc.

Most people, that's just not a good spot for their money. Great for pension funds, great for endowments with long time horizons, right? Or someone who's really wealthy and diversifying their portfolio, but understands this is just a little portion of it and it's a long-term play. I see missing regular people's RSP's and then suddenly they can't get the money out, right? This is a big problem or if one of those investments goes to zero, right? You know, there's no capital loss. There's a disproportionate amount of fraud that we see in some of these areas. So no, I couldn't agree with you more.

And again, unfortunately boring is what normally wins over the very long term when it comes to investing your money. Okay, anything else you want to wrap up with? We've kept you quite a while. any major concerns or anything you want to make sure you share? No, I just go back to the retirement spending piece, right? And the idea of doing your plan well in advance so that you don't get trapped into a term I hear often in public sector where you have a pension and you think about those golden handcuffs. So I call it one more year syndrome.

I just claim one more year. It's one more year out into my pension. It's one more year of income and savings. And then one less year of spending, right? But it's also one less year of living. That could be your good early retirement. Now, unless you love your job, which changes everything. Yeah.

Yeah. Yeah. And for me, I always want to run the plan to say, do the finances work? Because I'm not going to be able to tell you from a lifestyle perspective. We all have, you know, derive a certain sense of satisfaction, sense of purpose, identity, socialization, all those good things from our work in a lot of cases, right? I mean, some people do. Some people don't. And so unless you're retiring to something with a lot of hobbies and I've got a good long bucket list to

enjoy and you want to keep working or keep working in some capacity. I think those are good from a well-being perspective, right? But let's run the financial numbers. So then you know, like for the people that got called back to the office after years of, some years of working from home or whose boss changed and they're not getting along as well, you've got the finances behind you to be like, okay, I'm done. And don't have to go through that whole exercise all over again. So getting that planning done in advance, I think is going to help. And then seeing what's possible seeing all those puzzle pieces fit together to at least show you that, okay, I can let go of the saving habit, right? I can stop paying myself first and we'll stop, start paying yourself

first. Yeah, it's funny because it is. It's a funny twist of words because I think we want them to pay themselves first and go out and have fun with it. You're paying yourself first from your money now, from that pool of capital that we had you build up. You're now spending it, enjoying it. All right, My last question, do you agree with me that it's foolish to choose your career just to gain access to a defined benefit pension plan? But that is how you should choose your spouse. To get access to theirs? Well, I do get this question a lot is if someone is in a defined benefit pension and whether a teacher or in health care. And they ask, if I move out, what do I do?

And I say, well, you know that certain portion of your income is going towards this pension plan. Right. So now that is not going to be coming off your paycheck. And so you need to save it, right? So put the same equivalent amount into an RSP and maybe look for an employer match if there's any. And you can build up just as reasonable of a nest egg that way, right on your own. Not guaranteed, obviously, but you can still do just as well. And not inflation proof, et cetera.

But yeah, you can still do some wonderful things. I think people like you and all of these other great communicators, finally, I think we're getting it to sink into people. They have to take advantage of the company match on the group RSP. I've been able to see a few late and they've all been going to the full match. I'm not seeing those crazy ones where they're not doing it. So that's good news. The message is finally getting in. I think people got scared or spooked when they started learning about fees and then knowing

that these group plans maybe came with higher fee funds, right? For sure. A menu of options and some high fee funds. Oh, I'm not going to bother with that. I can just buy a fund on my own. Well, no fee is going to be too high that it ignores 100% match. Yeah, exactly. And again, often you can transfer it after a while.

not relatively quickly into a low fee product if you want. Or again, take advantage of the match and then with the rest of the RSP contribution, open up a separate one with a low fee product. But yeah, it's just too good to be true. As you say, no fee is overwhelming 100% immediate return. No, take, I always tell my clients, take advantage of the employer match. That's priority number one, right? Do not leave that on the table.

Then go down a layer to your RSP and your TFSA and fund your goals and lifestyle. Now, do you have employees there? Your wife works with you. Anybody else? My wife, Lindsay and I. So we've got the ultimate sort of lifestyle practice, just the two of us. And she used to work with doctors and manage their schedule. So I'm grateful for her that we can serve the clients that we do because she's handling all the administrative stuff.

And getting clients set up so that I can do what I do best, I think, which is write the plans and communicate with them in these kind of Zoom sessions. And I don't have to worry about the administrative stuff. So we're at the time of my team. Do you have a group RSP available? No, we're incorporated. So I was going to say, I don't work with people who are incorporated, but we are incorporated ourselves. You are corporate. Yeah, exactly, hypocrite.

Anyway, make sure that you give your wife our best. And once again, you've done a wonderful job. You're welcome back on this show anytime. You're one of the big names in the industry. You're writing over the years helped a tremendous number of people. It really has. I read you years and years ago, far before you and I ever crossed past through the podcast, and I really am a big fan.

So thank you for coming on again. I really appreciate the kind words, Dave. It's always a pleasure. And I look forward to the next time. Thank you.