Retirement flips the investing equation. You're drawing down, not building up.
The fund that was perfect at 35 can be wrong at 65. Here's what actually works for Canadian retirees — and what your bank advisor is probably pushing instead.
You're spending, not saving. Automatic contributions become automatic withdrawals.
RRSP converts to RRIF at 71. You need cash flow, not just growth.
Sequence of returns risk becomes real. A 30% market drop at age 35 doesn't matter — you have decades to recover.
A 30% drop at 67 while you're withdrawing 5% per year can permanently damage your retirement. This is why allocation shifts matter.
Tax efficiency changes. In an RRIF, everything comes out as income. In a TFSA, nothing is taxed.
In a non-registered account, dividends and capital gains are taxed favourably. Your fund choices should reflect which account they're in.
Conservative to balanced funds with reasonable fees. Series F MERs shown where available (fee-based advisor); Series A will be higher.
| Fund | Type | MER (Series F) | MER (Series A) | Allocation | Best For |
|---|---|---|---|---|---|
| Vanguard Retirement Income Fund (VRS) | Balanced | — | 0.29% | 50/50 stocks/bonds | Self-directed RRIF |
| BMO Conservative ETF Portfolio | Conservative | 0.52% | 1.42% | 40/60 stocks/bonds | Series D/F only |
| TD Comfort Conservative Income | Conservative | 0.75% | 1.84% | 35/65 stocks/bonds | Series F only |
| TD Canadian Bond Index (TDB909) | Bonds | — | 0.35% | 100% bonds | Bond allocation |
| Mawer Balanced Fund | Balanced | 0.72% | 1.63% | 60/40 stocks/bonds | Active, with track record |
| iShares Core Income Balanced (XINC) | ETF - Conservative | — | 0.20% | 20/80 stocks/bonds | Very conservative |
Why mutual funds still make sense for retirees: Systematic withdrawal plans (SWPs). You can set up automatic monthly withdrawals from a mutual fund for a specific dollar amount.
ETFs don't offer this — you'd need to sell units manually. For retirees who want monthly income deposited to their bank account without logging into a brokerage, this is a real advantage.
Banks love selling retirees "monthly income" funds. RBC Monthly Income Fund, TD Monthly Income Fund, CIBC Monthly Income Fund — they all sound perfect for retirement.
Steady monthly cheques. What's not to love?
The fees. Always the fees.
| Fund | MER (Series A) | Annual Fee on $300K | Monthly Distribution | Verdict |
|---|---|---|---|---|
| RBC Monthly Income Fund | 1.51% | $4,530 | ~$0.035/unit | Overpriced |
| TD Monthly Income Fund | 1.51% | $4,530 | ~$0.04/unit | Overpriced |
| CIBC Monthly Income Fund | 1.62% | $4,860 | ~$0.035/unit | Overpriced |
| BMO Monthly Income Fund | 1.49% | $4,470 | ~$0.04/unit | Overpriced |
On a $300,000 RRIF, those fees add up to roughly $4,500/year. That's $375/month going to the bank — possibly more than your monthly withdrawal. At age 72, with mandatory RRIF minimums and 1.5% MER drag, your portfolio erodes significantly faster than it needs to.
A balanced ETF like ZCON (0.20% MER) would cost about $600/year on the same portfolio. That's a $3,900 difference — real money when you're on a fixed income.
The RRIF minimum withdrawal trap. At 72, you must withdraw a minimum percentage of your RRIF balance (5.28%, rising each year). By 85, the minimum hits 8.51%.
By 94, it's 18.79%. These withdrawals are taxed as ordinary income.
The smart move: draw down your RRIF faster in low-income years. If you retire at 60 and delay CPP/OAS, your income from 60–65 might be low.
That's when RRIF withdrawals are taxed at your lowest marginal rate. Waiting until 72 when CPP, OAS, and RRIF minimums stack up can push you into a higher bracket.
Meanwhile, let your TFSA grow. TFSA withdrawals aren't taxable and don't affect OAS clawback. Keep growth-oriented funds in your TFSA (they have decades of tax-free compounding ahead) and draw from your RRIF first.
The OAS clawback zone. In 2026, OAS gets clawed back at 15% on net income above ~$90,997. RRIF withdrawals count as income.
A $400K RRIF with a mandatory 7% withdrawal at age 80 means $28,000 in forced income. Combined with CPP and OAS, this can trigger clawbacks. Managing RRIF withdrawals strategically — pulling more before 72, less after — can save thousands in avoided clawbacks.
In retirement, tax-efficient placement matters more than ever. Here's the basic framework:
| Account | What to Hold | Why |
|---|---|---|
| RRIF | Bonds, GICs, conservative balanced | Everything comes out as income anyway — might as well hold assets that generate income |
| TFSA | Growth equities, dividend funds | Growth compounds tax-free forever. No withdrawals forced. Best for funds you won't touch for years. |
| Non-Registered | Canadian dividend funds, tax-efficient ETFs | Canadian dividends get the dividend tax credit. Capital gains are 50% taxable (better than income). |
A common mistake: Holding bond funds in a non-registered account. Bond interest is taxed at your full marginal rate — the worst tax treatment.
Bonds belong inside registered accounts (RRIF or TFSA). In non-registered accounts, stick to Canadian dividend stocks/funds or growth-oriented holdings.
For a $400K retirement portfolio across all accounts:
| Approach | Example Holdings | Total MER | Annual Cost | Monthly Cost |
|---|---|---|---|---|
| Bank mutual funds (Series A) | RBC Monthly Income + Scotia Balanced | ~1.65% | $6,600 | $550 |
| Low-fee mutual funds | TD e-Series bond + Mawer Balanced (F) | ~0.55% | $2,200 | $183 |
| All-in-one ETFs | ZCON or XCNS | ~0.20% | $800 | $67 |
| Robo-advisor | Wealthsimple or RBC InvestEase | ~0.60% | $2,400 | $200 |
The difference between bank mutual funds and all-in-one ETFs: $5,800/year. That's an extra $483/month in your pocket. Over a 25-year retirement, compounded, it's the difference between running out of money at 87 and lasting past 95.
If you want the simplicity of mutual funds with automatic withdrawals, a robo-advisor is the middle ground. Wealthsimple and RBC InvestEase both handle automated withdrawals, rebalancing, and tax-loss harvesting. Not as cheap as DIY, but hands-off.
Don't panic-sell everything. If you're 68 and retiring next year with $400K in RBC or TD mutual funds, switching to a completely different platform adds stress during an already stressful transition. A phased approach works better.
Step 1: Ask about Series D or F. If you're at a Big Five bank, switching from Series A to Series D (via their discount brokerage) cuts your MER by 30–50%.
Same fund, lower cost. Read about fund series.
Step 2: Consolidate. Many retirees have 6–8 different funds across multiple accounts.
Simplify. One balanced fund per account is fine. Fewer funds means less complexity during withdrawal.
Step 3: Consider switching once settled. After 6–12 months of retirement, once you understand your actual spending, move to a lower-cost option. The should I switch decision is worth revisiting each year in retirement — because every year you pay 1.5%+ MER is real money gone.
The "too old to switch" myth: You're never too old to save $5,000/year in fees. A 70-year-old with a 25-year life expectancy will save ~$125,000 over their remaining lifetime by switching from 1.65% MER to 0.20% MER on a $400K portfolio.
The transfer takes 2–3 weeks. The savings last decades.
Run the numbers on your current MER vs a low-fee alternative. The difference adds years to your retirement savings.
Fee Calculator Low-Fee AlternativesNothing on this site is financial advice. RRIF minimums, OAS thresholds, and tax rates change annually — verify current figures with the CRA or a qualified tax professional.
Some links on this site are affiliate links. Past performance doesn't guarantee future returns.