What’s a good RRIF asset mix?

Question: As an 80-year-old, living on the proceeds of a substantial RRIF, but holding no insurance other than OHIP, what weightings would you suggest in today’s nervous market, at least for the next quarter? – C.G.


It’s not a good idea to be adjusting RRIF asset weightings on the basis of short-term considerations. You should have a basic plan in place and do nothing more than the occasional fine-tuning.

Start from the twin objectives of a RRIF — income and capital preservation. Your plan should be weighted to favour assets that are going to fulfill those needs, which would come under the general heading of fixed income. You may want to have a growth component in your plan to protect you against capital erosion, but that should be a secondary consideration. For people over age 70, that component should generally account for not more than 20%-25% of the total assets, and should be conservatively invested.

Within the fixed-income section of your plan, which may comprise 60%-70% of your asset mix, you should consider holding a combination of bonds or bond funds, GICs, plus income funds for higher yield (such as Claringn Canadian Income Fund, Guardian Monthly High Income Fund or similar).

You can generate additional income by using a systematic withdrawal plan for any equity funds you hold in your growth component. However, I stress that these funds should be chosen on the basis of minimal risk. – G.P.