Setting up a LRIF

Q – My question concerns my $130,000 LRIF (life retirement income fund) and how to structure it so as to provide about $20,000 annual income. I would appreciate your advice on this. – R.S.

A – The problem is the same whether it’s a LRIF, LIF (life income fund), or RRIF (registered retirement income fund). You want to achieve an annual return of more than 15%, and this at a time of low interest rates!

Frankly, the likelihood of being able to create a plan that would generate that kind of income on an on-going basis is almost nil. You have set an unrealistic goal.

If you are prepared to take a lot of risk, you could invest the money into a portfolio of stocks with high growth potential plus some high-yield royalty trusts and hope that the markets turn around. But this is not the kind of strategy I would counsel for a retirement income plan.

Unless you’re prepared to dip into capital to get your $20,000 a year (not a good idea) you need to scale back to a more achievable target – $8,000 to $10,000 a year, for example. This is an amount that can be sustained over time with a reasonable level of ris

As far as the precise securities are concerned, you should sit down with a financial advisor and work through the details. – G.P.