With Lower & Lower Interest Rates ... Whatcha Gonna Do ? :-( | General financial discussion | Discussion forum

I recall some members here were locking in 5 year GICs at 5+% for the past year or so and hopefully they continued the effort on subsequent renewals of maturing GICs on that ladder.....and didn't get seduced by the higher 1 year GIC rates in the meantime. Those rates look rather good now. All GIC term rates are likely going to be under 4% soon.

Isn't this why we (should?) have been taking long positions on high yields? We've seen the rates dropping and been calculating the results of inverted yields to get our best outcomes.

I just took a 1-year for my new RRIF, but that gives me the best yield on what is a small, rapidly declining investment. The rest of my deposits map out my best yields.

If inflation is dropping, we'll still be doing better than during the peak inflation period last year.

I'm laddered but have some GICs maturing shortly. When rates were 5+%, I was happy to purchase GICs with zero risk. Now that rates are below 4%, is it time to put more into the market?

mordko said
Whatcha gonna do? I am shortening durations of fixed income. Still have money in funds with ~ 6 to 7 year effective duration (ZAG, FBND) and what used to be 5 year GICs but new money is going into funds with less than 3 years’ duration (like VSC, ZST and money market). And I swapped some ZAG for VSC a couple of months ago.

Generally I am a passive investor but more active with my 30% allocation to fixed income.  

Do these bonds give better returns than GICs?
I am with Stocks and currently promos.
Putting matured GICs currently into promos. I have till Feb end 5.25% and 5%.
After promos it will go into mortgage payout as those returns get better than GICs. Anyways I think mortgage payout returns are always better than GICs.
Then I guess it will be back to promos or Saven.

dentgal said
I'm laddered but have some GICs maturing shortly. When rates were 5+%, I was happy to purchase GICs with zero risk. Now that rates are below 4%, is it time to put more into the market?  

It looks like the market has already corrected somewhat in anticipation of Trump's highly inflationary plans. Some analysts are projecting a coming recession if he follows through on mass deportation and high tariffs which certainly makes for some nervous times for investors.

smayer97 said
Why would mass deportation be the cause of inflation, when the mass importation did not cause any deflation.

Mass (USA) deportation would be equivalent to the mass Canadian immigration, that has now been cut back.

Increased numbers crossing the border would increase demand on services, housing, and spending to support them. There is a recent asylum seeker waiting in Whistler, BC, to evade his January 6th judicial sentence. He expects incoming President Trump to grant him a pardon. However, he can wait up to four years for his immigration asylum hearing, all at taxpayer expense. Now, multiply that for the millions of illegal US immigrants who might attempt the same escape, if they want to try and wait for the next presidential change.

You'll be receiving 0.7% more each month you delay taking CPP. Delaying 5 years to age 70 will result in 42% higher payouts. You'll recover the lost 60 months and more after 10 years.

In those 5 years, one can drain more of one's RRSP and RRIF accounts without hitting OAS clawback.

The challenge is that one needs to survive another 10 years to age 80.

Norman1 said
You'll be receiving 0.7% more each month you delay taking CPP. Delaying 5 years to age 70 will result in 42% higher payouts. You'll recover the lost 60 months and more after 10 years.

The challenge is that one needs to survive another 10 years to age 80.  

Thanks, Norman1. That is exactly my plan: to delay CPP to age of 70.

The only reason for me to take CPP sooner than that would be if my cash flow is in the red for sustained period of time. If/when it happens, I have minimum net worth set for myself (primary residence not included) that I will not be going below.

In my financial planning I estimate my life expectancy to be approximately 90 years, based on my family history.
Even if I die sooner, the loss of income from not taking CPP earlier would not bother me, as long at it is an income I didn't need when I were alive.

COIN said
Question: Does the CPP go to your surviving spouse (or SO) if you pass prematurely? (Hopefully, you don't pass prematurely.)  

See https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-survivor-pension.html for a description. A surviving spouse may receive some of the deceased's CPP benefit subject to some limitations (cap at one full CPP entitlement)

AltaRed said

See https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-survivor-pension.html for a description. A surviving spouse may receive some of the deceased's CPP benefit subject to some limitations (cap at one full CPP entitlement)

The short answer is no.

Instead, survivor will qualify for a survivor pension that could be as much as 60% of the deceased's CPP pension. However, because of the cap, survivor could end up with little survivor penson if survivor is already receiving close to the maximum CPP from their own CPP pension.

CPP pension doesn't work like a joint life annuity that would continue to pay the same amount to the survivor after one of the annuitants dies.