Investing RRSP money
Question: We are both retired with each receiving a company pension. I’m 59, she is 54. We both have $200,000 in RRSPs. Would it be advisable or possible to invest the full amount into AAA-rated bonds, bond funds, and preferred shares? Would a return of 6 per cent-8 per cent be possible as a safe investment?
Also we would like to draw down this portfolio over a 15-20 year period by selling enough each year to give each of us a return of about $18,000-$20,000 a year. Are there any problems doing this? – F.C.
Gordon’s answer: With interest rates at current levels, I suggest that a target at the low end of your range is more realistic for a high-quality portfolio. To achieve a return of 8 per cent right now, you would have to add more risk in the form of lower-rated bonds, income trusts, etc.