Managing a Registered Retirement Income Fund (RRIF) is a key aspect of retirement planning in Canada. There are multiple approaches to ensure that retirees receive regular payments without jeopardizing long-term investment growth.
Allan Small’s Active Strategy: Invest First, Withdraw When Needed
However, Allan Small, senior investment advisor with the Allan Small Financial Group, holds a different perspective than more traditional methods.
“Obviously [you] have to make sure that there’s enough money in the portfolio that’s liquid to make the payment,” says Small.
In other words, there should always be access to cash when it’s time to withdraw.
But he emphasizes flexibility. Rather than setting aside large amounts of cash just for RRIF withdrawals, he prefers to keep the portfolio invested. Why? To capture market growth. In fact, he believes in maximizing growth potential as much as possible.
“I don’t believe in setting aside a bunch of money, which has to sit there so you can take the RRIF payments from it,” he adds. Instead, Small liquidates investments as needed.
He continues, “I liquidate investments as necessary to pay investors the money they need as a RRIF payment.”
Dividend-Paying Stocks as a Cash Flow Solution
Moreover, dividend-paying stocks can simplify withdrawals.
According to Small, “Owning dividend payers can really help and make it easier to pay out the investor as well.” That’s why, when designing portfolios, he ensures a steady stream of dividends or interest.
In this way, the account regularly generates income. Thus, there’s no need to constantly sell off investments.
To summarize his strategy:
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Stay fully invested.
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Liquidate only when necessary.
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Use dividends and interest for regular cash flow.
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Maintain flexibility.
Another Option: Systematic Withdrawal Plans (SWPs)
On the other hand, Andrew Ardrey, head of wealth planning at Richardson Wealth, suggests a more automated approach.
He recommends setting up Systematic Withdrawal Payments (SWPs). This method pulls a fixed amount from investments on a recurring basis—monthly, quarterly, or annually.
Essentially, it’s the “set it and forget it” model for retirement income.
Just like automatic savings during your working years, this allows retirees to simplify their cash flow.
But… Asset Allocation Still Matters
However, Ardrey offers a word of caution.
If withdrawals are only coming from one asset class—say, equities or bonds—there’s a risk of imbalance.
Therefore, periodic reviews of your asset allocation are essential.
Over time, portfolio drift can occur.
As a result, retirees could unintentionally expose themselves to higher risk.
To avoid this, he suggests:
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Spreading withdrawals across multiple asset classes.
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Rebalancing regularly.
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Keeping an eye on both performance and liquidity.
RRIF Planning: Which Approach is Right for You?
In conclusion, both strategies have their strengths:
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Allan Small’s approach: Stay invested, use dividends, liquidate as needed. Great for those who are comfortable monitoring their portfolio or working with an advisor.
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Andrew Ardrey’s strategy: Automate the process with SWPs. Ideal for retirees who prefer simplicity and predictability.
Ultimately, the best plan depends on your goals, comfort with market fluctuations, and need for stable cash flow.
Either way, a thoughtful RRIF strategy can help you enjoy a smooth, stress-free retirement.
“De-risking” RRIF under Trump 2.0?
While pondering the asset allocation is appropriate for this stage of your life, you may want to focus on selling the riskier securities, while preserving quality high-yielding dividend stocks and fixed income.
Financial planner John De Goey, a portfolio manager at Toronto-based Designed Wealth Management, recently wrote a blog suggesting that while Donald Trump remains president, conservative retirees may want to “de-risk” their portfolios. It’s time to stop being complacent and recognize that “traditional financial assets (especially stocks) are severely threatened.”
That doesn’t necessarily mean retreating to bonds and cash, though. De Goey is keen on alternative assets, like real estate, metals, resources and bullion, infrastructure and alternative assets that offer a strong cash flow. Small, on the other hand, isn’t making major changes to his clients’ portfolios, but says he has “begun to buy into this market again.”
Small continues: “I have been buying investment ideas on the cheap. Many stocks as an example are 15% to 20% on sale … I believe I can see a path forward through all this tariff talk.”
Once the reciprocal tariffs were introduced in early April, he adds, “I think this market can and will move higher (perhaps after a short down period when tariffs are announced) based on the certainty factor.”