Emergency funds: lots of unneeded cash in savings and chequing accounts
Debt: none
Marital Status: Widowed
Tax Rate: 20% Federal, 9% Provincial, MTR 29.65%, ATR 17%
Provincial Residence: ON
Age (a range would suffice): early 90s
Desired Asset Allocation: unsure, but leaning to 0% stocks and maximum 15% stocks
Desired Stock Allocation outside Canada: unsure, if any equities would split 1/3 Canada (XIC), 2/3 Global (XAW) or similar funds
Current Assets Total >100k, <500k To give a vague ballpark
Taxable
80% All in cash and short-term GICs
Tax-Free Savings Account
15% In cash savings and low-rate short-term bank GICs
Has about $25k available contribution room
RRIF (currently in a self directed account at a major bank discount broker)
5% split about 50/50 between TD Canadian Bond (TDB162) and TD Short Term Canadian Bond TDB967. (These have around 1% MER)
Pensions: Has a DB pension that covers all non-discretionary expenses
CPP: full CPP survivor pension
OAS: full OAS
Annuities: none
This person's Pension/CPP/OAS cover more than their total expenses, so the portfolio will likely all go to the estate's beneficiaries. Likely the assets would be liquidated and distributed in cash to the beneficiaries rather than in-kind.
We are leaning to 0% equities. Was pondering 15% equities split 1/3 XIC and 2/3 XAW (or similar Vanguard or BMO funds). But even 15% equities could put the portfolio in a loss position in a big crash, which given the person's age seems too risky wrt the possible upside.
Considering moving all the funds to the same discount broker where the RRIF is now held for simplicity in managing, plus it's a broker that I use so am familiar with its web and phone interface.
Portfolio we are thinking of:
- 70% 3 year GIC ladder at the discount broker
- 20% short-term bond ETF like XSB or VSB (this irks me somewhat given possible rate increases driving the price down, but the YTM-MER for XSB is >2% so likely it will return better than a broker ISA unless rates really spike up)
- 10% cash in a broker ISA like TDB8150 or similar
- WIth the large % of assets in non-registered it will be hard to get a really tax-efficient portfolio. But we don't want to start chasing exotic assets to get more tax-efficiency. For example ZDB BMO Discount Bond ETF has a duration >7 years so does not fit the investor's timeline.
- RRIF: All in cash in a broker ISA since it's not a large % of the portfolio
- TFSA: All in a GIC ladder
- Non-Reg: Split the rest of the assets here in GIC ladder, short-term bond ETF and the rest of the cash.