Dr. Garth

Nurse Jiggles has the cappuccino machine on and the colonoscopy tubes nicely warmed, so we’re good to go.

The doctor is in!

Well, here’s the first victim. Irena, who apparently changed her name from Karen.

“You’re just lazy is not talking about that family who lost both parents within 11 months and had to pay $660k tax to CRA,” she hisses. “Tons of articles and videos on them.

“I am wondering what average families can do to prevent this from happening. Trusts sound too complicated, RRSP takes huge cut, TFSA maxed out… so tell us.”

Was there social media outrage over greedy children seeing their unearned inheritance sucked away when the last parent croaked and the RRSP was cashed out? Yup, apparently. Do I care? Nope.

The rules are crystal. Registered retirement savings accounts can be passed, tax-free, from one spouse to the surviving one. The money can’t be doled out to the kids when mom/dad passes any more than the surviving parent can cash it in without being taxed. (An exception would be to care for a financially-dependent child, which does not mean buying them a condo.)

Irena seems to have forgotten how an RRSP is created – from tax-deferred contributions which are allowed to grow without tax on the condition that withdrawals will be treated (and taxed) as income. So upon death the RRSP is collapsed, added to the estate and taxed at the marginal rate of the dearly-departed in the terminal return.

The kids get the rest if included in the will.  In this case, hopefully not.

Now, here’s Chester. He has a much better attitude.

“Heartfelt thanks to you and the team for consistently providing meaningful advice to the masses.  (Preconstruction purchase advice was spot on),” he says. “I tried to implement many of the tips explained on the blog. Sometimes there were scant resources left for the 10% we were supposed to pay ourselves first with.  Excuses, excuses but we did some things right.”

“As boomers my wife of many years and I are now fully retired with two small db pensions, no debt, travel and grandkids well underway.  Life is working out ok. I know you can never time the market but I wonder if at some point (now) it would be prudent to shift away from the B&D portfolio and build a very low risk portfolio and ride off into the sunset.  What would that look like?

“At today’s closing we have more than enough funds given our lifestyle choices and modest inheritance goals.  Would a super low risk portfolio alleviate trying to recover from a major downturn in the market?  The years needed to recoup losses are becoming limited and drawing down on life savings is necessary to maintain lifestyle. Is it time?”

Well, C, if you and the squeeze have multiple millions – or are in the ninth inning of your lives – then you can afford to be a weenie and hide in cash, GICs or a ‘high-interest’ savings account. The odds of running out of money in either of those sitations is diminished.

But if you’re in your sixties or seventies, or have a portfolio of less than seven figures, hiding under a rock is probably a bad idea. It sounds like your modest pensions plus the public pogey don’t finance the life you want, which means a constant stream of income from investments is required. So a proper 60/40 all-ETF joint investment account should stay intact.

Remember that the whole point of a B&D portfolio is to mitigate risk, ride out volatility, roll with the punches and still provide income and a good level of predictability. The world may seem strange these days, but markets are healthy, companies are making boffo profits, technology is on fire and you’ll probably outlive Trump.

Man up. Stay invested. And tape this to the fridge: “The greatest risk is running out of money, not losing it. “

Finally, here’s Amandeep, with a question I get daily.

“You saved my finances a few years ago, as you talked about low interest rates and the coming inflation,” his MSU reads. “So when VRM was juicier, I opted for your advice and locked at 1.79% for 5 years. I should how gone for 10 (as you suggested) but alas.

“I hope that you will discuss this on your blog. Are we at risk of interest rates going down and then inflation soaring. Probably, but then should folks lock up at high fixed rates. I am confused.”

We all are, since the economy is in transition now thanks to the orange guy and his capricious global trade policies. But here’s the best guess: the Bank of Canada stays cautious, given all the stimulus being poured out by the spendy federal government. No rate cut next month. Maybe none in the spring, either. Inflation may rise by a full point next year, but so will the unemployment rate. That means the CB is likely to hold the line as long as possible.

Is inflation to roar back? Unlikely. Will interest rates jump to counter higher prices? Nope. Not happening, The maple economy is at more risk of losing steam than getting over-stimulated (I know the feeling), and our bankers get it.

You scored with one of the lowest rates in history for five long years. Now renew in the 3-4% range and chill. You won. You’re welcome.

About the picture: “Hey Garth, I’ve been reading your blog since 2012,” writes M.A., in an email curiously devoid of explanation. “Thank you for always helping. Attached is the fantasy football dog photo.”

To be in touch or send a picture of your beast, email to ‘garth@@garth.ca’.

Source: https://www.greaterfool.ca/2025/11/13/dr-garth-58/