The Wealthy Barber Podcast - #60 — Adam Bornn (Returns): Retirement Planning Tips & Common Mistakes to Avoid

Episode Date: June 9, 2026

Our guest this episode is Adam Bornn — founder of Parallel Wealth Financial Group and the creator of the Parallel Wealth YouTube channel, one of Canada's largest channels devoted to retirement planning. Adam returns to the show to focus on a single, high-stakes subject: how Canadians can build a retirement plan that actually works, and the common mistakes that quietly derail one. In this episode, Dave and Adam dive into the realities of the retirement transition, from the most common mistakes people make to how to balance spending early with the cost of care later in life. They break down the "go-go, slow-go and no-go" years, why health and finding joy matter as much as the numbers, and when the ideal time to start planning really is. Adam also explains when it makes sense to convert an RRSP to a RRIF and how a TFSA can act as a flexible lever account inside a broader plan. The conversation also explores the issues that complicate real-world retirement, including the squeeze on the sandwich generation, why more retirees are helping their adult kids financially, and how to plan around large age gaps or being single. Adam digs into some of the costliest missteps too, from taking CPP early when you don't need to, to letting registered accounts grow tax-deferred for too long and running into the OAS clawback. Along the way, they cover tax planning when liquidating cottages and rental properties, the limited role of reverse mortgages and HELOCs, and how to think about high market valuations and cash wedges in retirement. Whether you're years away from retirement or already making the transition, this episode is packed with practical, tax-smart insights to help you avoid the mistakes that cost retirees the most.    Show Notes (00:00) Intro & Disclaimer (00:55) Intro to Adam Bornn (01:30) Common Retirement Transition Mistakes (03:22) Balancing Early Spending & Late-Life Care (05:25) Go-Go, Slow-Go & No-Go Years (07:37) Finding Joy and the Importance of Health in Retirement (10:56) Adam's YouTube Channel and Focus on Retirement Planning (13:35) When Is the Ideal Time to Start Retirement Planning? (15:40) When to Convert an RRSP to a RRIF (17:35) The Power and Flexibility of a TFSA Lever Account (19:23) Factoring in Lump-Sum Obligations to Your Retirement Plan (21:36) Careless Tax Mistakes Can Cost You Huge Money (23:18) The Sandwich Generation (25:00) Why Some Retirees Are Helping Their Kids Financially (28:14) Navigating Retirement Planning with Large Age Gaps (30:07) The Disadvantages of Retirement Planning for Single People (31:57) The Biggest Retirement Mistake: Taking CPP Early if You Don't Need To (34:16) Avoid the Trap of Growing Registered Accounts Tax-Deferred For Too Long (36:18) Optimizing to Avoid the OAS Clawback (37:55) Tax Planning When Liquidating Cottages and Rental Properties (40:53) The Limited Use of Reverse Mortgages and HELOCs (41:40) High Market Valuations, Equities & Cash Wedges in Retirement (44:38) Conclusion

Hey, it's Dave Chilthin, the wealthy barber and former Dragon on Dragon Stent. 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 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, will be here to help you.

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 Chilton with the Wealthy Barber podcast. We have a return guest today, and I will say he's one of our more podcast. popular guests we've ever had on the show. His first appearance drew up huge ratings, tons of questions, lots of feedback. We knew we had to get him back on. In fact, I'd be very surprised

if you didn't come back a third time. Adam, born, parallel wealth financial group. Adam, good to see you again. Thank you. Thank you for having me. It's great to be back on the podcast. Well, you did a great job last time and touched on a lot of subjects that are near and dear to our listener slash viewers' hearts. So we're going to go towards retirement income planning your specialty in a few moments. But I want to talk a little bit first about retirement in general. I mean, very few people in the country are sitting across the table for more people as they enter retirement than you are than your team is. You're one of the bigger retirement planning teams in the country, if not the biggest. What are some of them stakes the economy and not just around finance? I'm talking about as they head into retirement,

we see a fair number of people. A lot of my male friends, not picking on males, but a lot of my male friends have really struggled with the retirement transition. What are you seeing? Yeah, it's a psychological shift, right? And always my big thing, my big push is you need to retire to something, not from something. If you're just retiring from your job, but you don't know where you're going, you're going to have a tough transition. And so I always encourage anyone that's entering retirement, figure out years before, ideally five to 10 years before, what are you retiring to? And that could be a vocational job. It could be a hobby. It could be travel. It could be your spouse or grandkids or whatever. There's a multitude of things it could be. But you need to make sure you understand,

Okay, when I'm done tomorrow, my last day at work, the next day, here's what I'm going to be doing. And I think you have two buckets here. You have people that are, I don't know how I worked before. Like I'm so busy in retirement. And then you have the other people that are having a tough time transitioning. And for those people, my encouragement would be maybe look at working part time or transitioning into retirement. Don't make it that kind of cold turkey stop. That typically will help a lot of people.

So that's one of the big things. The other big thing would be not spending enough early. I think that's a big challenge that people have. And I get it. It's save, save, save for 30, 40, 50 years. And then again, the next day you're told to spend, spend, spend. And that's a really tough thing to do. Retirement's 10% financial, 90% psychological.

Those are two big psychological factors that people, a lot of people don't look at or look into leading up to retirement that they should be. You know, lately I'm running into a lot of people. They're heading towards retirement. there, let's say, 55 to 62, and they're hearing all of the experts out there, including yourself saying, we've got to spend a little bit more early, a lot of people aren't spending enough, but they're also seeing their aging parents at 85, 88, 91, getting involved in assisted living facilities, in many instances, having to complement that with personal care workers,

and they're looking at their total bills and going, holy smokes, unless I want to rely on my kids stepping up financially, I better save some of this money for, out of the road. How do you bridge that challenge? For most Canadian, at least most of the Canadians that we work with, they have homeownership, right? So if we build out a plan, we typically, we put the plan into the, or the house into the plan from an asset perspective, but we try not to touch it. So that let's spend down like the R's PTF, say, non-redge, whatever you've saved up for retirement, let's build a strategy to draw that down and do it tax efficiently by 90-95 type of idea. and if you end up in a care home or need in-home care,

we have this asset sitting there. Now, for people that don't own or don't plan to own through retirement, it's a challenge for sure. And it's something that has to be considered. My caution in all of this is always don't ruin your early years of retirement for a possibility that may not even come true down the road. And now you have a million dollars later in life, and you're not actually using it because you didn't go to a care home.

But you always hear the worst stories, right? $10,000 a month care facility. They're there for a long time. That's not the norm. So I think for most Canadians, if you own real estate, that can be your fallback on either you sell a move to a care home or you leverage that to get in-home care. And at least you can enjoy those earlier years of retirement without stressing about running out of money.

And I mean, that's the current generation that's in their 70s, 80s, 90s, that's how they live. A lot of them have way more money than they thought they'd ever have. They didn't do a lot of things they should have done maybe in what we call the go-go years of retirement. the retirement about age 75. So it's a fine balance, but definitely owning real estate does help buffer that later on. You've used the expression many times before about the go-go years, the slow-go years, and the no-go years.

And although it's cute, it's actually very effective. Like, I think it really does summarize what a lot of people, I just look at my parents' friends, some of my friends who are a little bit older, walk our audience through that. It's somewhat self-explanatory, but walk us through it anyway because it really is quite accurate. Yeah, so we call it the laddered income strategy. And really it's, we didn't coin it. We've definitely pushed it to Canadians where, yeah, from the age you retire, the point you retire to about age 75. There's a lot of data out there that shows age 71 to 73, you'll start to slow down. Doesn't mean you can't travel and do those types of things, but it does start to

slow down. So we typically will build out the go-go years to age 75 and then from 76 to 85 slow go. You're still doing things. You're still spending money, but it does start to tail down. And this isn't just like our thought or feelings around this. I've been doing this for 20 years and we've been seeing clients transition through these phases. And so, you know, really the idea with the go-go years is make sure you're spending enough early. And again, it's that psychological shift. It's also knowing what you can spend. So if you do a retirement plan and it's, you know, you have $60,000 a year after tax adjusted to inflation until 95, maybe you want to make it 70,000, 60,000, 50,000. Now I'm oversimplifying that. But there's this ladder.

to income because we all have a bucket list. Dave, you have a bucket list. I don't know what's on. It's probably something to do with sports and A&W fries or something like that. Absolutely. Yeah, exactly. We all have a bucket list. And for most people that bucket list past age 75, especially past age 80, really tough to check those things off. So you have the window of time, 10 to 15 years typically, to do a lot of that stuff. So you're going to need more money, typically, to do a lot of those things. You'd said all that very well. And I think, again, it matches up perfectly to the experiences I've had with parents, friends, my own friends who are a bit older. And, you know, it's interesting how you say that 71 to 73, but I liked how you went all the way

to 75 because it tends for some people to be a little bit later, but very few people are still traveling aggressively in their 80s. Now, some are, but very few as a percentage. So that all makes a lot of sense. You talked earlier about the adjustments in retirement. An observation I gave a few podcasts ago was that it's important to still try to improve in life. Great joy. comes from trying to get better at something. So a lot of people I've seen who've prospered in retirement have picked up hobbies. They've tried to learn a new language.

They've tried to get in better shape. They've tried to learn how to cook to garden because that's helping them to improve at something. And again, that creates great joy. Are you an advocate of that? Oh, a huge advocate. And I've used an example many times in my videos of my two grandpas. My grandpa's retired around the same time, around the same age.

My wine grandpa out here in BC, he moved Salt Spring Island. That's where he grew up. And he actually built his retirement home. So he retired and built his own retirement home. Farm stayed very active, moved a lot. My other grandpa owned businesses was very active while he was working. But as soon as he retired, there was a lot of sitting on the couch and that kind of stuff. And I saw their quality of life, what they could do, their movement changed drastically.

And so, you know, I always encourage our clients and encourage anyone looking close to retirement or in retirement, not just keep your mind going, but keep your body going, right? Because you can have all the money in the world. but if you don't have your mind or you don't have your body, you be able to move and that kind of stuff, the money doesn't go too far. And so as much as we can focus on retirement and these podcasts and what I talk about all the time is money,

but again, you can have billions of dollars. And Dave, I'm sure you know people like this where they have oodles of money, but their health has gone. And so sometimes we can't control that. I get that. We come across things that we can't control,

but we need to make sure we're controlling. And you see this with like the Jeff Bezos, a lot of these wealthier individuals in their 50s into their 60s, health becomes their number one priority, right? They realize, okay, money was the number one until a certain point. Now it's health. And so as you enter retirement, definitely health from a mindset standpoint, like you said,

learning new things, whatever it is, but also keep that body moving. And it can be as simple as going for a 30 minute walk every day. Like it doesn't have to be overcomplicated. Or like you do, right? You lift the weights and just to walk around the house, sir. Yeah, you know, it's interesting. I'm getting more and more into that. And to your point, as you get older, you tend to think I better stay healthy.

I want to play with grandkids. I want to keep my leg strength. I want to travel. I want to do all those things. And so I stepped up on those micro workouts. You and I talked about at one point. And, you know, the farmer's walk and I put my push-up stands on the stairs. And every time I go upstairs, I do 25.

Well, all of a sudden, at the end of the day, between 100 and 150. And that's a lot of push-ups. But it hasn't seemed like a burden. And I'll watch TV and I'll do a lot of stride jumps. And it's all the micro stuff. And I love going for a walk, as you mentioned, especially a brisk one and trying to get out in the sun early in the morning. all those things really matter.

And I think people are paying more attention to that now. Among my friend group, they're thinking, you know what, I'm going to cut back of my alcohol, I'm going to get outside a little bit more. They're starting to make some very good choices. I think the media and all of the social media we love to criticize has done a pretty darn good job of bringing across a lot of these tips. I agree. And that's the thing.

There's, there's whoop. There's Google, just Google error, I think it is. There's so many tracking tools that can motivate you, too. They're linked to your phone and say, you haven't moved in an hour. Get moving, that kind of stuff. If you struggle with that kind of stuff, there's a lot of support out there. As you enter retirement, it's important to, because again, a lot of us when we're working, we are moving all the time.

But you become more set. You're not moving as much for most people as they walk into retirement too. No, I couldn't agree more. You became a celebrity in the strangest of ways through online videos about retirement income. That may be the most boring track to celebrity status in history, but you did a wonderful job. And I'm going to give you a lot of credit here. when you really got hot during COVID, I think you were the first Canadian to really draw tremendous attention to the mistakes being made in retirement income planning.

And as you know, because we've come to know each other a bit, I was talking years ago on stage about how people weren't doing a bad job here. They weren't doing any job. The planners weren't doing anything. The individuals weren't doing anything. They were just kind of going and withdrawing from the RSP and the RIF as late as they possibly could under the thinking that I'm going to keep it tax deferred as long as I possibly can. there was no real planning around tax optimization, any of it.

And you helped to shine a light on it. Now the industry has picked it up. And you're seeing the standards rise, the software is becoming quite good, etc. What drew you to that in the first place? Like what drew your attention to it and made you go on YouTube? The YouTube stuff started during COVID and we had a client base that we couldn't meet with anymore. So it was actually a means to provide value to our clients who were essentially paying us for service. And that's how we started.

So September 1st of 2020. is when our first video came out. And then we had some videos take off in the spring of 2021. And the ones that took off were around just that RSPs, everything in retirement, CPP, that kind of stuff. And the people started contacting us were, can you do a retirement plan? It's like, yeah, we could. And it just evolved from there.

So it was really more of a, let's create a bit of everything. The retirement stuff stuck. And now for over five years and we built our team up over that, we just strictly do retirement planning now. Yeah. So you're, you're specialized. And you've got two components to your business. You have the advice only aspect of it, but you'll also handle the money management side too.

But going over to the advice only, do you only focus on retirement income planning? We do. Yeah, we only do. So you have to be, if someone's more than 10 years from retirement, we refer it out. We have a few other advisors that we trust and we refer that out to. But yeah, basically all of our clients are retired or within five to 10 years. I would say 90% of our clients are within a year of retirement either way. And most people, they're either DIY investors just needing a plan.

You know, we have a lot of financial planners in Canada watch our videos, which is great. Like we're trying to educate not just the general public, but our industry. Like here's how it's done better. So that's helped a lot too. But yeah, we do a lot of advice only because I think there's a lot of people, they're not looking for a change on the investment side, which is great and fine. But they need that plan, that independent plan.

And it could be, you know, I have a planner. I'm just looking for a second opinion on it. It's interesting that you were saying within a year of retirement, people are contact to you because one of the most common questions we get, they've heard you, they've heard other experts come on our podcast and they say, when should I first start looking at my retirement income planning? So if I'm thinking of retiring at 58, do I go to see the Adam Warrens of the world at 53 or do I wait until 57? Do I wait until 59? What's the best possible answer? I would argue 55 type thing, at least a few years before you actually retire makes the most sense.

Yeah, three to five years is ideal. And the reason for that is because Sometimes you might be, well, I'm planning to retire in three years. And we do a plan. You can retire tomorrow if you want. And they have no idea. And we, that comes across a lot. And that's what we do a lot of plans for people that are like retiring tomorrow. Yeah, you could have retired two or three years ago.

And they're like, don't tell me that. So we call it from the five years gives your runway. We call it the runway. And that really allows us to make adjustments. Maybe you need to, you know, heavily fund a spousal RSP for a little bit. Maybe you need to set up a TFSA. There's a lot of people that enter retirement with no TFSA. So it gives you that runway to make those adjustments to not only create a good tax situation until retirement,

but make sure you walk into retirement with the properly funded accounts and structure to make sure that you're taking advantage of all the benefits and credits and tax advantages that you can in retirement. Because I think for most Canadians when they walk into retirement, it's the very first time in their life they can actually do tax planning. Because most Canadians are T4 employees. You go to work. You get your paycheck. They take off tax. If you want to save tax, you're doing an RSP or you're making a donation. Whereas when you enter retirement, there is a lot of tax planning opportunity.

You get to choose if you want to pay more or less. Now, you can't pay zero in theory, but you can pay less. And by default, you will pay more. And so that's where A, having a good plan in place, but B, just understanding how everything works together. I'm going to tell Mo not to watch this podcast because you're talking about people who could retire when I want her working. Yeah, we declined her.

We've locked her emails. We're good. Yeah, good. You followed up in that instruction. Thank you very much. Yeah. All right. When we talk about retirement income strategy,

in a lot of ways what you're trying to do is smooth out your retirement income for the most part. And that's not all you're doing, but that's a primary thrust because that tends to lower the tax burden. You don't get caught in those years when you get those huge chunks of income coming out. That means in a lot of instances, you're better to take some of the money out of the RIF early, which means you have to turn the RSP into the RIF much earlier than, say, H-71 when you're mandated to do so walk our audience through that. So yeah, the whole idea in retirement to create a good retirement plan, and this isn't, again, opinion piece. This is just creating thousands of the plans is the better you smooth out your average tax rate. The better your plan typically is going to be,

meaning that the more money of your money is coming back into your pocket and not to zero in the form of taxes. So if you look at, if you have a retirement plan from your financial institution, bank, wherever, and your tax rate or your taxes paid looks like a roller coaster, that's a good sign that it may not be a great plan. And so, yeah, the idea is to start drawing out of your RIF or Lyft or registered accounts a little bit earlier. Like essentially from the point you retire, you should start drawing down from these accounts. Now, you mentioned converting RSP to a RIF before 71. Yes, that does typically the year after you retire, you should be starting to draw out

your RIF. There's obviously some caveats to that. But up until 65, do you need to convert to a RIF? You don't have to. A lot of financial institutions charge. a withdrawal fee when you pull money out of your RSP. Some have gone away from that, but just to keep things simple, yeah, once you retire, you should be drawing out of your RSP, so convert it to your RIF and start converting out.

But again, sit down with your financial planner and create a plan because if you're working part-time or you might go back to work, if you have a big RSP and you convert it all to a RIF, there is a minimum amount you have to take out. So if you're all of a sudden go back to work, you could be bumping into a tax issue that you maybe didn't need to bump into to begin with. Talk to us about the TFSA and why it's such an important tool in retirement in terms of the flexibility it provides. Yeah, so the taxary savings account, we call a lever account. And so that's really, if you think about a lever, it's a push and pull thing.

So in years where you need a little bit more money, right, you talk about the go-go years. And not that you're depleting a TFCA in go-go years by any means, but a year where you need a little bit more money where you have an emergency, you could pull money from the TFSA account and not drive up that tax bill. Again, keeping that tax bill very level. In years where you don't need extra money, you can put it up. back in there or leave it in there. So when you look at 10-year period of a retiree from, say, 65 to 75, let's say traveling is important to them. They're typically not spending the same, say, $15, $20, $30,000 a year on travel. It's going to be higher years and lower years. So to kind of

buffer that to make sure your tax bill doesn't ride that wave as well, the tax-free savings account is a great tool because you might be pulling more out of your RIF than you actually need to spend is for next year travel. So you can take that money, top up your TFSA, keep your TFSA, keep your taxable level, but then you can swing your income up and down a little bit year to year and just make it more efficient. So yeah, tax free savings account is a very, very important tool just because you can pull money out of there on a tax free basis. And again, especially early years, most Canadians don't really know what they're going to spend in retirement. They might have a general idea, but no one knows exactly what we're going to spend. So again, I'm, oh, yeah, I am spending a little bit more.

Okay, I'll pull from the tax free savings. I'll readjust my plan and move forward from there. So it does create a lot of flexibility. It goes back. or earlier comment about that runway leading up to retirement. Meet a lot of people that don't have a tax receivings, especially people with pensions. I got my pensions. It's going to be, that's going to fund my retirement. It will fund your retirement, but it doesn't create the flexibility that you probably want a retirement. So now we need to start funding that, however we can. You know, it's interesting. I've met a lot of very smart DIYers over the years, very sharp. And they've done a marvelous job on many different fronts. But even the best among them often forget

the very basic fact that you're going to have lump sum obligations in retirement that still have to be thought through, whether it's a new roof if you're not planning on selling the house, certainly another car, that type of thing. First of all, why do you think it is that a lot of sharp people don't think of what I would argue is pretty obvious? And then secondly, is that another place that TFSA can play a role? Huge role. Yeah, because if you need to buy a $50,000 car, which seems to be the starting cost for a car nowadays, you don't want to drive up your tax bill. Again, the idea is to build that. So if I need a new car in five years,

I want to be pulling money out of my registered accounts a little bit every year, topping up my TFSA and pulling out of there to, again, keep that smooth. Now, why do people forget about that? I think a lot of people just literally, they hit retirement and shut down. They just don't know what to do, how to do it. And so it's not just, well, I might need a new car or do furnace or roof, whatever, like these one-time expenses that we know are coming. Like, if you own a house, 30 years in retirement, you're going to need a new roof probably.

And those aren't cheap nowadays. You're going to need new vehicle, probably multiple of them. And so, yeah, A, those need to be built in. But I think B, people in general, they just, they don't know how to draw down in retirement. So they just, well, I've done well, accumulating, I'll just keep that same mentality. And it's very different. The accumulation versus decumulation or deacumulation, very different mindset. And that's where a lot of DIYers, when they hit retirement, most, not all, but obviously

most do loop over to a planner. And we've seen that with Rob that you've had on your channel, right? Like ETFs keep it simple and then retirement hits and it's okay, no, I've actually partnered with someone to help me walk through this. Well, you know, I'm a big believer in that. And I've said for years that I think that's the one time that even from a peace of mind perspective, even if you are very competent, even if you're accessing some of the very fine available software now on your own, having somebody in there who's seen the mistakes that people make, who has the wisdom the only experience can provide, just saying, yeah, you're on the right track, but what about this, what about that? That's worth the price of admission. It really is.

Avoiding one mistake can be so huge. I mean, you talked last time on our podcast about how much money can be lost to excess taxes through some careless mistakes. We're not talking a few thousand dollars here. In some cases, when you're dealing with the relatively affluent, not the super rich by any stretch, but the relatively, we're talking tens of thousands of dollars that can be loss to excess taxes without proper planning. That's a lot of money. Yeah, or hundreds of thousands. And most of our clients, I would say 89% of our clients are average Canadian. Like, we're not dealing with high net worth people. We do have some for sure. But yeah, someone with a million to a million and a half save, which is, I get us a lot of money, but you know,

middle, middle, upper class Canada, there are hundreds of thousands of dollars in tax savings. So it's substantial. I think the other thing going back to the DIY is, you know, when you enter retirement, you are spending down your money. You are, your investments are your paycheck. And so we talk a lot about your cash flow wedge, which is once we build a plan, we know exactly what's coming out of each account. And so if you have 30,000 coming out of your RIF and 20 out of your LIF account and 10 out of your TFSA, you need to build out that cash flow wedge or protect three to five years of income in there. So when the market drops 30%. So again, this is where DIY is, well, how do I build that cash flow wedge? Well, that's part of a DIY investor is to figure that out.

And it's easier said than done. So that's where I prefer personally and recommend. Find a investment professional that can actually do that well and complement that to your plan. Yeah, you're very biased in saying that. But the good news is I'm unbiased and I agree with you. So we're both on the same page there that I think that is the one time that even the sharp DIYers probably should turn to professionals for some help. Because you have seen a lot of the mistakes that people make. Now, something you must be seeing a lot of now is people in their 60s and 70s still having a parent.

alive and they're having to help that parent out sometimes through monetary help, but sometimes just through a lot of time involvement and so on and so forth. I've definitely gone through that with my family the last X number of years. How do you weave that into a plan and how frequently you're seeing that? Seeing it all the time. Probably a daily conversation I have. Yesterday I had a conversation with a lady and her dad is now in a care facility. Mom just sold the house.

So she didn't want to deal with it. She's sold. She's renting something for now. They're 1884. the parents are, she was about 60. And so she's working through this with her parents and her brother's involved as well. But now I said, they're just coming down saying, you need to help us. We don't know really what to do. Right. I said, well, now you have one and a half million dollars sitting there that your parents are going to have non-registered investments. And your dad now, who's in a care

facility, his payment is based on how much income he has. And now he hasn't this million dollar non-rege, half of that income is his. So there's all these moving parts. The conversation comes in a lot. It's kind of the sandwich, you know, you're part of it, a sandwich generation where you have parents that are leaning on you and you have kids that are leaning on you too. So it's not just how are we going to make sure your parents are taken care of and how does that look, but it's also the kids too. When we look at parents too, we have a lot of clients come to us that have worked with us and they get their parents to do a plan with us too because a lot of these 80, 85, 90 year olds still have a massive RSP or RIF left. And so it's like, you know, time's not on their side,

but you can still do a little bit of planning. And we see a lot of parents. moving into basements of clients and that kind of stuff too. Yeah, it's care facilities are tough to get into nowadays too. They really are and they're so expensive in many instances. Going back to your reference to helping out the kids at the same time, obviously we've talked before about how many families are getting involved and helping out kids with down payments and doing those types of things as they go to buy a home. Do you get asked a lot about that?

And do people say we need to weave this into our planning to some extent, knowing that we're going to be giving each of our kids $140,000 the next five years to help them with the down payment? Yeah, it's a conversation I'll say maybe half ask about. It's probably our team brings it forward to our clients 100% of the time, especially with, if there is that, hey, we want to make sure we leave money to the kids at death. Well, why don't we look at giving it sooner? Another big conversation that comes up again and again is, again, non-registered investment.

So when we build a plan, I'm say, look, you have this non-registered investment account. It's creating a tax liability for you. It's climb back your old age security a little bit. It's an asset on paper, but the reality is you're never going to use it. And it's going to your kids or grandkids anyway. Why don't we start transitioning that earlier? You're going to pay less tax. You're going to get more of your old age security.

And you can give it with a warm hand and you're going to see the benefits of that money being handed off to your kids and grandkids. So it is a conversation that we try to have as much as we can because there's no point a 90-year-old passing money to a 65-year-old. That just doesn't make sense. And so we're trying to get away from that. The generation right now that's in their 80s and 90s, they were not that generation to give away early. But I think your generation, Dave, and people older than you, this next wave, they're more open to, yeah, if I don't need it, I want to help my kids, especially nowadays with real estate prices.

Yeah, if I can help them early. So then we map out, here's how much you could give. And we really talk about how to give, right? If you can afford to give your kid $100,000, should you give them $10,000 over 10 years or $100,000 now? And so we're proponents of maybe bigger gifts less often. we think they go further. If you give a kid five or 10 grand, you know, it's a trip, it's paying off credit card or whatever. Give them 100 grand. It's typically going on a mortgage or something for a longer term wealth generation. People want to be, how do I create generational

wealth? Again, it's passing money earlier. If you can help your kids get debt free, then they can help their kids get debt free and it starts to snowball down. Just in case my father listens to this podcast, I will be editing out your line when you said 90-year-olds giving money to 65-year-olds doesn't make any sense. Although I don't know why I'm taking it out because he just takes money for me. This guy's got it figured out. By the way, you nailed it. You are 100% right. That generation was very skeptical about giving the money early. Part of that is they still tied to the Depression. And that was in the back of their minds and they were very guarded about that. Understandably, I think the next generation,

the Dave Chilton age generation is more open to it. One of the things I've said to lots of friends over the years, going back to your non-registered account argument, if you know you're not going to need the money. I mean, we are in the clear here. You have enough through registered accounts and other monies. There's things that the kids can do with the money. You can't. They can max their TFSAs and their RSPs. You've already done that. They can pay off non-deductible debt. You don't have any. All of those types of things that can give them better returns without change in the risk profile. It just makes so much sense to give it to them now. If again, you know you're in the clear. If you on the other hand are tight and may need the money, that's a completely different matter. All right, next question that I get

asked a fair amount. It's an interesting one. We've got one spouse who's fairly old, 70, and the other spouse is only 49, 52. What does that do on the planning front? And we see that more and more, Dave, big age gaps. Yeah. So obviously longevity, right? You have a 20 year longevity for one person and 40 or 50 for the other person. So that has to come into play. It's also like we talked about earlier, you have these go go, go, slow go no go stages. And you have someone in the go go, someone in the no go, right? So it's this dichotomy of, well, do you retire earlier? Do you part?

So really when you have that age gap, it really comes down to conversational versus financial, right? We'll figure out the financial and how it flows and make sure the younger person is going to be okay long term. We had one client where there was about a 25 age gap and there's the older person that had all the money. Right. Right. So it's, well, I want the younger person to retire, but they're refusing to. So again, we find, and we've done a lot of these. plans, it is more conversational around what are their goals, what's the objectives,

what in all of this, any financial plan should, but that age gap really brings it to light. But you really have to think about the younger person is they have a lot longer to go. How do we protect against that? Make sure the older person enjoys their retirement without leaving the younger person dried down the road. No, you're right. And we are seeing a lot more of that. And it's interesting because the older person is often male. Don't criticize me listeners for saying that. It's true. It's true in 80 something percent of cases. And of course, they have an even shorter lifespan.

So even if the age gap is 20, the time to expected death can be an even bigger problem because that person might only live X years. And so factoring about all of that into your planning, you're right, it starts to the conversation. Everybody has different needs and want. The younger person to your point may not want to retire. And of course, that's very, very important. It has to be heavily weighted.

A follow up question to that. One that we get nonstop is, I listen to Adam. I love Adam. watch Adam's videos, I'm single. Yeah. I can't income split. I don't have access to this. What I'm amazed at it, you know, you're going to laugh at this because I'm sure

you're in the same position is how many comments we get from single people who are mad at me because there aren't a lot of things they could do on the income splitting. I always get back to me say, I don't set the income splitting laws. I live alone. I mean, it's not my fault. Well, exactly. And not only that, but the amount of comments, especially the last month or two, it's like, oh, another couple video.

And I'm like, no, I'm just talking about five things you should do before you retire. nothing to do with singles or couples. And so I went back since January 1st this year, I've created more scenarios for our videos around singles and couples. Interesting. But again, viewership thinks everything's for couples. But the reality is, yeah, when you talk about tax planning advantages, there's only so much for singles, right? It is limited.

So singles at this point, and I don't see a change coming, you're at a disadvantage. And I know you talked to, I think it was with Rob Angan a few weeks ago about this. And I think old people, like, for instance, my grandma, passed away, I'm going to say a decade ago now. My grandpa was remarried in a year. Now, I'm sure he, you know, love the woman. Don't get me wrong. Besides that, but there's tax advantages to that. Right. And so when you look, do older people remarry or get married for the tax advantages? We'd be done to say no. Yeah, I think you're going to see more people do that. My dad had a class when my mom passed away. My dad said to my sister, three weeks

after my mom passed, I'm thinking I'm asking somebody out. Do you think that's inappropriate? My sister said usually a month. You wait a month. Give it that extra week. Give it that extra week, dad. But no, you're right. Let the dirt settle. Yeah, exactly. I think you will see, to your point, some people marrying for non-romantic love reasons, but it doesn't mean it's just for money.

Companionship, bill sharing, all those types of things can come into play. But we are hearing more and more about this. Let me go to your ultimate hot spot. You're sitting back and truly in a spot where you see more of this than anybody. What are the two or three biggest mistakes that people are making? Oh, I think CPP will always be a hot topic. People think, again, it's my opinion that they should take it later. It's not in it.

There's been more traction around this. Right. Around other qualified, like great people that you've had on your podcast and others that are talking the same language, which is great. I think the more of us that they talk about it, but it show it too. Like here's the data behind it. So I think, yeah, one of the biggest mistakes would be taking your CPP early. I think for most of us, we need to take it. And that's a health issue or you absolutely need that money.

You should be trying to defer it as long as possible. to 70. Within that though, part of the tax plan in there is then taking those years from whenever, however old you are 270 to start drawing down your RIF, your registered account, like those two things work hand and hand to create most efficiency. Yeah, I want to cut you off there because what gets lost in the shuffle so often is people are saying, well, Adam's contradicting himself. He's saying that you need more money in the go-go years, but to defer your CPP, but you're not saying spend less money in the go-go years. You're saying just get it elsewhere because it's more tax-efficient to get it elsewhere and defer the CPP.

That's exactly it. And we get that comment a lot, Dave. That's a great point to bring up in that, yeah, we're delaying your CPP, but we're just pulling more from your RIF. It's all taxable income at the end of the day. But if we can get that nice bump, again, past 65, it's 8.4% a year, guaranteed, adjusted to inflate. This is our pension plan. We all wanted to find benefit pension plan. Exactly.

But most of us take CPP early and we have a much smaller. And there's other great benefits to see. And the other flip side of it is if we can spend down our money quicker, that means that market risk is less tied to your retirement. There's so many benefits to it. Now, again, if you delay CPP and draw down your accounts and you're married and one of you pass away, there's factors. But again, stress tests that in your plan. It's very easy to do for your financial planner to do that. So that's definitely, yeah, again, delaying CPP to your point, Dave, doesn't mean, well, then you can't have go-go years.

Right. Those two are not connected. Those are totally disconnected items. And I think, yeah, people need to just work in financial software with their planner to see, okay, yeah, this is the optimal way to do it and enjoy those go-go years and have more money. On a second mistake front, do you see some people who have bought into the old argument, which is never gain access to your registered accounts? You want them growing tax deferred as long as possible.

So they refuse to listen to you about the meltdown or evening out, the tax liabilities. They leave the money in there as long as possible. And then they die. The spouse is already gone. they get hit by this ultra large tax bill, are we seeing that as much as we used to? I mean, 10 years ago, that was quite commonplace. It's still common. I think it's less common. The language I'm using, others are using around it is people have to remember we live in a progressive tax system, right? The first 15 to $20,000 to $20,000 of income is tax free.

Right. So if we don't take that income, then we're pushing our way free income essentially, right? So that starts to trigger with people. It's like, okay, but I'm over 20. Yeah, you're under 50. It's still 20% tax back. You're still in a low tax break. You're still in a low tax break. So you don't want to push everything to a 50% tax bracket when you pass away. So again, it's about leveling that out. But there's definitely been better traction around that. People are starting to understand. Okay, yes, it does go tax deferred, but here's a downside.

And again, I think it's really easy for people that are struggling with that still, sit down with your financial planner and put it into software. Software will show you what's better, what's worse. And again, I always say every time I say something on the videos, it's like, well, 99% of the time. because there's always that 1%. And again, that's why you want to run into the, run your individual numbers into software to figure out, am I the 99% or am I the 1%? You're probably going to be the 99, like statistically.

And the software is obviously factoring the OAS clawback and all of those kinds of important nuances. I mean, that goes without saying that's melded in. And if you try to do that in your own, it's tricky. Remember, when you and I first met, I talked about years ago helping a friend using Bristol board and doing it all and trying to figure all the options. And I think I'm quite good at that stuff. I'm like, you got to be kidding me. It was just no way to think of all the scenarios.

Yeah, Aidan said you have in a cave somewhere where you had etched it all in there. I know, I'm bad. I still use pen to paper most of the time, by the way. Like, I'm bad. But in this particular case, you have to go the software route. How fanatical are a lot of people about avoiding the OAS clawback and how able are you to do that with all the different techniques you're using? Obviously, we want to get as much money as we can, especially when it's government money, right? We all want more government money because we pay a lot of taxes.

When you run into old age security clawback, that is a time to look to maybe defer to 70. We typically recommend delaying CPP, take your old age security, though, closer to 65, 65, 6, 6, 6, 6. And the reason for that is more psychological. Most people, you know, if you retire 665, it's like, I'm not collecting that government money yet. We don't want you to start CPP. You're better off starting old age security. There's less of a bump to delay your old age security.

So that's just how the numbers work. So, but again, if you run into old age security clawback, then deferring closer or all the way to 70, might make sense. Again, the software, we use snap projections, and it will show you have clawback. Okay, well, if we delay it, how much clawback. And then we can see total after-tax income, total taxes paid. So we can do these comparisons to figure out, okay, yeah, 68's kind of that optimal point. Or maybe we defer your old age security. Again, a lot of people are selling their cottages or second properties or whatever it is. They have a big non-registered account. So maybe we want to trigger those sales and those capital gains taxes before we start old age security.

So we don't collect to collect. And then all of a sudden we have a year where we don't get it. So these are other factors that you need to consider with old age security. But there's definitely planning that can happen to reduce or eliminate OAS clawback. But again, I always say if you're in a situation where you have clawback, you can't get rid of it, it's a pretty good problem to have. And I know we talked about that last time too. You know, I love that example you brought up of the cottage sale because I'm seeing more

of that among my friend group. They've decided how hard it is to pass a cottage on when the kids are living in different spots. It tends to lead to a lot of family friction, as we've discussed on the podcast, and they don't want to go up anymore and take care of it. They're in their late 70s. They're in their early 80s. But of course, the sale will trigger a capital gains tax. That's an important thing to get into your planners thought process to weave in to all of this analysis. Yeah. And we talk about like I would say on average, our clients that have a rental property or a second property, especially rentals. Typically, they're selling them within five years of retirement. People get tired of dealing with them, especially in Ontario and BC. The problem is there was a decade where people did really well on these. And then a lot of people bought rental properties like three, four years ago. And they're all underwater. They, you know, their mortgages are coming up. It's an absolute mess.

So people are realizing like, okay, it's not as good as, you know, my neighbor made it sound. And so, yeah, if, okay, what's your plan with the rental? Okay, let's look at selling it here. And again, if you do have a gain, like if you've held it for a while and you have a gain, timing of those properties does matter. How you maybe if you have multiple, how you lie to them over a number of years. And then again,

with real estate the way we have it right now, like I'll use my in-laws. My in-laws have a couple of rental properties in Colona that they want to liquidate. They had a few. They sold some. They have two left. And they've been trying to sell them.

So it's like the plan I created for them. It's like, hey, we're going to sell you. You have a bit of a gain. That'll be part of your tax planning. You can smoothening out for this year. But last year they tried to sell it. Couldn't sell market in Cologne is not great right now with condos. And so at the end of the,

the year, we just drew a bunch out of their RIF account because we wanted their tax, taxable income at a certain level. So we just pulled it out of the Rift, push that hopefully they sell it next year or this year. If they don't, we'll do the RIF again. So again, there's this kind of ebb and flow of selling properties, creating that taxable event or drawing from elsewhere. And again, sometimes it's end of year property didn't sell. And I still need that taxable income.

Now, is it true that you have your in-laws on a budget of only $2,200 a month so that you and your wife can inherit as much as possible? I've heard that rumor. Um, no, no, no, no, no. No, we, uh, you got to spendy a little bit more. Yeah, they, yeah, my wife has three siblings. I got two siblings. We definitely not relying on inheritance. No, they, my, my in-laws travel while they do what they should be doing. So they're in their go-go years right now. So it's good to see. And they come, we actually bring them on trips with us. So we have four kids. That's six through 12. And so we brought them to Disneyland. We brought them to Vegas this year. So we try and bring them on a trip but you're with us. So we're actually doing the opposite. It's not my in-laws bringing us.

We actually bring them and pay for them primarily. Did you take your four kids to Vegas too? Yeah, well, we rented a house in Henderson. So yeah, we always rent a house. We've done Palm Springs and Phoenix or wherever. We always rent a house with the pool and just, yeah, we're not on the Vegas trip with our kids. I had the visions of the four kids in the casino, gambling, being tossed out. I felt it was all inappropriate parenting, but I'm not going to judge. You do what you need to do. I'll give me my wife's email address. Yeah, exactly. Yeah, I'll tell her. All right, we got to wrap up, but two quick ones. One is reverse mortgages. Do you ever see any use for them in your

practice at all as you deal with people's retirement income needs? Honestly, Dave, not a lot. I think, again, later in life, if you have a care facility or need in-home care, right? If you're only assets, your home left, you need in-home care, doing that reverse mortgage might make sense. We do have some clients that talked to, we took on a client this morning, actually, and they do more of a heloog, so not reverse mortgage, but they have equity in their home that they're comfortable leveraging to a certain extent. they feel like over the next five to 10 years stock markets invest in that money will do better than the debt they're going to or the interest rate they're going to pay on that debt.

So that's the strategy some if you're comfortable with could work out. But yeah, the reverse mortgages, honestly, we don't come across it a lot. I think there's a handful of people that do push it. Our client base hasn't had a big need for it, I guess is a good way to put it. Now, the last one, I write primarily for people in their 20s and 30s, you know, with the wealthy barber and I'm, you know, putting them in monthly purchasing of index funds. they're focusing 30 and 40 years out. You and the other side are dealing with people 60, 65, and 70.

Equities in many instances still play a pretty big role in their investment portfolio. But do you worry at all, despite the fact I'm not a market timer, the markets are very expensive by any measure now. We're at historically high valuations. Do you factor that in at all to how they design their portfolio or you just say, look, as long as we know we've got the 10 to 15 years with that part of the component, we're not going to worry too much about that. Yeah, and again, going back to that cash flow wedge, if I know what you need for the next three to five years and we protect that,

history has shown that if the market drops, typically it's back to where it was in two to three years. So now we have that timing on our side. And that's where like there's argument online all day long about does it cash flow like the cash wedge or cash flow wedge, does that actually make sense financially? And you can argue with a lot of the data like Michael Kitts has done some good research. Yes, there's always this line in there that says this is really good and it works and it's better not to do the cash flow. edge if you don't pull money out when the market's down. Well, if you're retired, you need to pull money out because you need to put food on the table and travel and enjoy your go-go years.

So there's a bit of contradictory information there. And so I more go through what I've seen clients live through for 20 years of doing this. You want to protect a few years of income. So, yeah, we have clients well into retirement that they have 80% of their portfolio in pure equities because they don't need it for over five years. And so I think we need to move away from this, 2080. you know, 70, 30, 60, 40s or whatever you want to, just figure out what you need for the next three to five years. And the rest, you know, it should fit your risk criteria, essentially.

Don't you think some client, it's a good idea to have a cash wedge just because psychologically it's so important to them? If they had 100% or 90% of their monies in the markets, even if it made sense in their particular scenario, I think it would be overwhelming to them in terms of sleep. Not everybody. Some people can take that. I can take a very high risk level. I've always been like that. I invest in private companies for heaven's sakes. But a lot of my friends and colleagues, it'd be crazy if they didn't have a cash wedge, it would drive them nuts. It's all psychological. Yeah.

And again, for most Canadians, you have about 10 years of go-go years. So in those 10 years, we'll probably have two to three of down markets. So now you're taking 20 to 30 percent of your good retirement years and throwing them away because you're probably not going to sell as much as you should and draw as much income as you should in those down years. So again, now, okay, we've paid the bills, but we haven't traveled. We haven't done what we want to do. you're going to look back and be like, man, I waste it 30% of my good retirement years because I didn't build up this cash wedge because I read an article somewhere that didn't make sense.

To me, that doesn't make any sense. It blows my mind a little bit. So I'm a strong proponent to build out a cash flow wedge, protect that income. You can do all the financial data behind it. It does come down to psychologically making sure you enjoy your retirement. You've worked 40 years to get here. Don't throw it away. Should I be worried that I'm only 64 and I'm already in my no-go years that I like just sitting around my house? You're reverse engineering. Yeah, exactly.

You're going to go crazy in your 80s, Dave. Yeah, I'm going to party. When I'm 90, watch out. Okay, watch out. Exactly. Be like my dad. Anyway, we really enjoyed having you back on. Great as always.

I couldn't recommend your YouTube material enough. Hey, I got a last question for it. It's a good one. Who do you watch on YouTube? Who do you listen to on the podcast front that you think our listeners would benefit from tapping into? Yeah. Ben Felix, you've had him on a few times.

Always listening to his stuff. Yeah, a couple guys I know in the industry that have good language, like Chad Weeb and it's a pathway as well as Reese Martel from Well Built Wealth. Like these guys, he's a very good communicator. Very good. And great content. And again, we communicate the same.

And I've known these guys for a long time and they do good work. And again, I always say like when you're interviewing with a financial planner, talk to three or four or five. And we all do stuff a little bit different. And you got to fit the personality. And there's other factors that come into it. But yeah, these are people I watch and listen to and trust too. If a client saying, hey, I'm interviewing you.

and chat, you and Reese. It's like, you're moving down the right path. Like, you're going to get a good quality plan. There's more and more kind of advice only that I think you're doing a great job, both on YouTube and social media, but also behind the scenes running a business, taking care of their client base. Yeah, that's good. Yeah, I like Reese's videos too. I mean, he has a good communicator. And, you know, Ben Felix and what are you going to say? I still say in all of North America, in my mind, he's number one. To get on Diary of a CEO is quite, he was on my podcast and a month later on that. I'm like, these are disconnected by so far. But, yeah, Very blessed. So, yeah.

And he's also an incredibly nice guy. He's a very good athlete. He's very bright. He's very good looking. He's very nice. I find it all annoying. Like, I really do. I don't even like that guy. I'm never having him back on. Anyway, listen, thanks so much for coming on. You did a wonderful job. And we'll see you again for sure. Thanks, Dave.