A fixation with your income

Dollars and Sense

As investors approach retirement, investment priorities change. Accumulation of wealth gives way to preservation and distribution of that wealth. As a result, the investment focus shifts to income-producing assets designed to deliver a predictable rate of return that you can literally “take to the bank.”

The traditional rule-of-thumb that your age should determine the percentage of your investments in fixed-income securities is no longer valid for many retirees. 

While traditional debt investments — government bonds or bank GICs — continue to provide a measure of safety and security to a well-balanced retirement portfolio, they may not be relied on to generate an adequate income stream that can outpace inflation.

Investing for retirement has become more complex with a greater diversity of investment options and strategies from which to choose as you make the move to fixed income investing.




Maximize your 

tax advantages

Income from investments comes in a variety of forms — dividends, return of capital, capital gains (when an asset is sold for a profit) and interest — each treated differently from a tax point of view. 

Capital gains and dividend income receive preferential tax treatment and are usually taxed at a lower rate than many investors’ personal tax rate, which would apply to interest income and withdrawals from a registered retirement fund. For this reason, high net worth investors will want their portfolio of income-producing equities and investments in an unregistered account rather than a RRSP or RRIF.




Examine your 

equity investment 


The equity markets can play an important role in fixed income investing. In particular, dividend-paying common equities can provide capital appreciation and income potential.

Investors should look for companies with a long track record of regularly paying a dividend and more importantly, those that increase their dividends on an annual basis.

Dividends paid by Canadian corporations are now receiving more favourable tax treatment by the federal and many provincial tax authorities — the upshot of which can make dividend income the lowest taxed form of investment income. 

Indeed, individuals with no other source of income may now receive up to $67,000 per year in eligible dividend income without incurring any taxes.

Also coming back into the picture are corporate preferred shares. 

Corporate preferred shares are non-voting and not as volatile as a company’s common shares. Sometimes described as “bonds in waiting,” preferred shares are more secure investments than common stock and may pay a regular, and often attractive, dividend.




Other Income 


Traditional insurance annuities can be tailored to each investor’s personal circumstances. 

The terms of the annuity contract may vary but all annuities are designed to provide a guaranteed retirement income for the life of the annuitant and often the spouse.

The insurance industry is now also offering principal-protected investment contracts designed to provide the potential for equity growth along with guaranteed minimum withdrawal benefits that give investors a long-term sustainable and predictable income source.

For mutual fund investors, there’s an option of investing in established funds that allows a systematic withdrawal plan (SWP). These funds allow unit holders to receive a steady income stream paid out regularly while still maintaining an equity position in the fund. 

Such SWPs often enjoy tax advantages when held in a non-registered account.




Fine Tune Your 


There’s more to income investing than first meets the eye. With the many investment options to consider, it’s often a fine-tuning exercise.

Please feel free to call or e-mail for more information.




To receive PDF versions of this or previous articles, please e-mail jim.grant@raymondjames.ca.







Jim Grant, CFP (Certified Financial Planner) is a Financial Advisor with Raymond James Ltd . This article is for information only and should not be considered as personal tax advice.  This information is from sources believed to be reliable, but cannot be guaranteed to be accurate or complete. Securities offered through Raymond James Ltd., member CIPF. Insurance offered through Raymond James Financial Planning Ltd., not CIPF member. For more information feel free to call Jim at 250-594-1100, or e-mail at jim.grant@raymondjames.ca. and/or visit www.jimgrant.ca.


Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Cougar euthanized after attacking small dog in Dunsmuir area

Attack happened during middle of the day while family was outside painting house

Sand sculptor creates special eagle head in Qualicum Beach

Kaube fashions work behind Civic Centre

Qualicum Beach seniors hiking group tackles alpine trails

Annual trip involves taking helicopter to remote locations

Parksville asks for help identifying veterans for special banner project

Program to honour veterans whose names are listed on Parksville cenotaph

B.C. records 30-50 new COVID-19 cases a day over weekend, no new deaths

Many of those testing positive were identified by contact tracing for being linked to other confirmed infections

Five B.C. First Nations call out Canada for ‘discriminatory’ food fish practices

West Coast nations say government ignoring court-won right to chinook and coho

Rent-relief program becomes new front in fight between Liberals, opposition

Opposition trying to draw parallels between decision to have Canada Mortgage and Housing Corp. run program and the WE controversy

Nanaimo woman will buy ‘supersonic’ hair dryer after $500,000 lotto win

Debra Allen won $500,000 in July 28 Lotto Max draw

Ottawa sets minimum unemployment rate at 13.1% for EI calculation

Statistics Canada says the unemployment rate was 10.9 per cent in July

$45K in donations received after couple’s sudden death in Tulameen

Sarah MacDermid, 31, and Casey Bussiere, 37, died August long weekend

Famous Yukon-based bhangra dancer brings movements of joy to Long Beach

Internet-famous dancer is exploring Vancouver Island, visiting the B.C. Legislature and more

Battle of Fairy Creek: blockade launched to save Vancouver Island old-growth

‘Forest Defenders’ occupy road to prevent logging company from reaching Port Renfrew-area watershed

Most Read