Good morning. Retirement planning runs on a few things you're taught to trust: a simple withdrawal rule, a formula the government sets for you, and a bank statement that's supposed to just be right. Today's issue is about what happens when each of those quietly stops holding up.
On The Money Today:
The RRIF math that can push $2M-$5M savers into a bracket they didn't plan for
RBC just got fined for statement errors — here's what to check on yours
Why the "safe" 4% withdrawal rule may not stretch as far as it used to
Let’s dive in.
RETIREMENT
You're sitting on more than most Canadians will ever save, so why does retirement still feel complicated? Mandatory RRIF withdrawals climb from 5.28% at 71 to 11.92% by 90 — often pushing "modest millionaires" into tax brackets and OAS clawbacks they didn't see coming.
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NEWS
RBC was just fined $4.25 million after a credit card mix-up hit more than 227,000 accounts. If you've ever gotten a replacement card after reporting fraud, the same kind of error could be quietly sitting on your statement right now. We've got the exact checklist to run through before your next bill comes due.
MONEY
For decades, withdrawing 4% a year was the safe bet for making retirement savings last. But lower bond yields and stickier inflation are testing that math — and 59% of Canadians now worry about outliving their savings. Here's what actually still holds up, and what to adjust.
MONEY IQ
What withdrawal rate did the 4% rule's original creator, William Bengen, later say current retirees could reasonably use?
ALSO MAKING THE ROUNDS TODAY
RETIREMENT: 5 retirement relationship pitfalls Canadian couples face, and how to fix them before you exit work
RETIREMENT: The retirement tool most Canadian professionals have never heard of, and how it beats an RRSP after 40
MONEY IQ - ANSWER
Answer: C) 5.25% to 5.5%. Bengen, who created the 4% rule in 1994, now puts the floor at 4.7% for a diversified portfolio, with many retirees able to withdraw 5.25% to 5.5%. The bigger risk: sequence-of-returns, a market downturn early on that forces selling at a loss.
That's a wrap for today! Before you go, we'd love to know what you thought of today's newsletter. Hit REPLY if you have more to share — we read every reply.
