A Simple Retirement Plan Using T-Bills/GICs

Preparing for life after work. RRSPs, RRIFs, TFSAs, annuities and meeting future financial and psychological needs.

Re: A Simple Retirement Plan Using T-Bills/GICs

Postby Taggart » 09 Apr 2012 17:04

Taggart wrote:Another year and a redemption has come up on a five year GIC. Best rate I can find in the RRIF account on another 5 year GIC to replace it is 2.710%.


Taggart wrote:
However, after inflation you're down to about a 1% real return in a tax deferred or tax free account.


ghariton wrote:
(FWIW inflation is currently running at 2.6%)


George is correct. I obviously got the above real return calculation incorrect. I was probably looking at the wrong figure at the Bank of Canada website.

So the real return on the above 2.710% nominal would actually be 0.09%.

I usually purchase one new 5 year GIC every spring around this time, so I don't keep track of GIC rates throughout the rest of the year.

Following are the GIC rates and redemption years for the ladder in the portfolio. These are the highest for a 5 year I could obtain at time of purchase.

2012 4.15% Just redeemed.

2013 4.66%

2014 3.55%

2015 3.25%

2016 3.3%

By the way according to the BOC, the average annual inflation rate for the last five years was 1.92%.
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Re: A Simple Retirement Plan Using T-Bills/GICs

Postby twocentsworth » 09 Apr 2012 17:51

Taggart wrote:By the way according to the BOC, the average annual inflation rate for the last five years was 1.92%.


Which is why gas now only costs close to $1.50/L. :evil:

Stated inflation vs Actual inflation: It'll kill ya everytime.
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