Investing

One million dollars

  • Last Updated:
  • Sep 8th, 2017 10:54 pm
[OP]
Deal Addict
Jul 27, 2017
2180 posts
949 upvotes

One million dollars

As a Canadian resident, where or in what product could one-million dollars be invested safe & secure, zero risk, no volatility that will provide ongoing quarterly or monthly income stream?

Suggestions please
69 replies
Deal Addict
Nov 9, 2013
4945 posts
5673 upvotes
Edmonton, AB
GIC, although I'm not certain if they pay monthly or quarterly distributions.
Buy quality. Keep calm and go long
Deal Fanatic
User avatar
May 11, 2014
5766 posts
7782 upvotes
Rankin Inlet, NU
treva84 wrote: GIC, although I'm not certain if they pay monthly or quarterly distributions.
They do, but they pay way less than if annually.

@OP, GICs will barely pay you anything, but they are the lowest risk investment you can find. Just keep in mind, you may need to diversify your funds at different places due to CDIC coverage.
Oaken pays the highest GIC rates currently. If you want the funds unregistered, the most you can deposit with insurance is $200K. Notice that semi-annual and monthly payouts results in a cut in the rate
https://www.oaken.com/gic-rates/

The monthly 2.90% GIC for 5 years can pay approx $2416 a month.

If you are willing to take some risk, a bond ETF can yield 2.0~2.5% while a preferred equity ETF 3.5-4.0%ish.

Manitoba online CUs have unlimited deposit insurance, but this is provincial insurance.
https://www.implicity.ca/Rates/
Last edited by xgbsSS on Aug 19th, 2017 9:55 am, edited 1 time in total.
Support your local Credit Union!

Sask Pension Plan Upto $7200/yr in Credit Card spending on RRSP contributions
sask-pension-6000-annually-credit-card- ... ns-2167222
Deal Addict
Feb 26, 2008
1821 posts
1281 upvotes
porticoman wrote: As a Canadian resident, where or in what product could one-million dollars be invested safe & secure, zero risk, no volatility that will provide ongoing quarterly or monthly income stream?

Suggestions please

The short answer is, "Nowhere." Such an investment does not exist.

When you are talking about $1 million, you usually are thinking about an amount of money that you can live off of (or nearly live from) for the rest of your life. I know of no investment that carries zero risk for the rest of my life. Asset classes contain many risks, a few of which are enumerated below:

1) Equities - market risk, and possibly geography-specific risk
2) Bonds - credit risk, inflation risk
3) Real estate - market risk, policy risk
4) Precious metals - market risk, inflation risk


So, IMO, over the long-term you cannot avoid all risk, but rather you must choose which sorts of risk to avoid. Most people will tell you to invest in government bonds or government insured savings accounts because they are "risk-free" but that is not entirely true. You are still exposed to the risk of sovereign default (ie, the government going bust) and inflation. In the short-term, those risks might be assessed as reasonably low, but over the long term they are significant (ie, name the governments that have gone 300 years without defaulting...now, after that exercise, would you really consider sovereign default risk to be zero over a 50 or 60 year time frame?).

Other people will tell you that a geographically diversified portfolio of equities is the only long-term approach to simultaneously manage the risks of inflation and geography-specific risk (ie, failure of a national government or a debauching of a currency). But, that equities portfolio carries a considerable exposure to market risk.

TL;DR: Think about your investment horizon, and develop a portfolio that provides the return you require while managing the most significant risks posed by that time horizon.
Deal Addict
Jul 3, 2006
2510 posts
1346 upvotes
porticoman wrote: As a Canadian resident, where or in what product could one-million dollars be invested safe & secure, zero risk, no volatility that will provide ongoing quarterly or monthly income stream?

Suggestions please
Tangerine promo account & move to PC when its done and repeat but they only allow promo rates to be applied to 500k

500k * 2.5+% = $12 500 on 500k

100% Tax Able

Why not just invest it?
Deal Addict
Mar 8, 2013
2812 posts
1487 upvotes
xgbsSS wrote: They do, but they pay way less than if annually.

@OP, GICs will barely pay you anything, but they are the lowest risk investment you can find. Just keep in mind, you may need to diversify your funds at different places due to CDIC coverage.
Oaken pays the highest GIC rates currently. If you want the funds unregistered, the most you can deposit with insurance is $200K. Notice that semi-annual and monthly payouts results in a cut in the rate
https://www.oaken.com/gic-rates/

The monthly 2.90% GIC for 5 years can pay approx $2416 a month.

If you are willing to take some risk, a bond ETF can yield 2.0~2.5% while a preferred equity ETF 3.5-4.0%ish.

Manitoba online CUs have unlimited deposit insurance, but this is provincial insurance.
https://www.implicity.ca/Rates/
If I were going the GIC route, I would buy twelve 5 year GICs of $83K paying annual interest - the first in month 0, the second in month 1, etc., keeping the rest in several HISAs or cashable GICs to easily buy the 5 year GIC in month N. If you want income for life, you could buy a life annuity with some or all of your million. Do you have a spouse? Do you want to leave an estate?
Deal Fanatic
User avatar
May 11, 2014
5766 posts
7782 upvotes
Rankin Inlet, NU
akaManny wrote: If I were going the GIC route, I would buy twelve 5 year GICs of $83K paying annual interest - the first in month 0, the second in month 1, etc., keeping the rest in several HISAs or cashable GICs to easily buy the 5 year GIC in month N. If you want income for life, you could buy a life annuity with some or all of your million. Do you have a spouse? Do you want to leave an estate?
+1, the laddering approach would work well.

OP hasn't given us much info to work with so hard to determine what exactly is the best :P
Support your local Credit Union!

Sask Pension Plan Upto $7200/yr in Credit Card spending on RRSP contributions
sask-pension-6000-annually-credit-card- ... ns-2167222
[OP]
Deal Addict
Jul 27, 2017
2180 posts
949 upvotes
xgbsSS wrote: +1, the laddering approach would work well.

OP hasn't given us much info to work with so hard to determine what exactly is the best :P
Wife & I are both age 70, good health with the one-million outside of the TFSA sitting at present in a savings account.

We are mortgage free, we do not have RRSP's or RRIF's

Our guaranteed pension/income more than covers our monthly expenses ++, so the one-million with any income it earns is extra.

Thanks for the comment that if it's in a GIC/HISA the interest is taxable

We know $1,000,000 in an almost zero interest savings account drawing out $1000/wk will last approx 20 years

The plan is NOT leaving an inheritance to our adult children or anyone else. Whatever is left at the end of the day - so be it, we'll be gone so it's not a concern.

For now we have the children on title of the property that we live in.

The million I guess just needs to keep in line with inflation or does it really matter.
Deal Fanatic
User avatar
May 11, 2014
5766 posts
7782 upvotes
Rankin Inlet, NU
porticoman wrote: Wife & I are both age 70, good health with the one-million outside of the TFSA sitting at present in a savings account.

We are mortgage free, we do not have RRSP's or RRIF's

Our guaranteed pension/income more than covers our monthly expenses ++, so the one-million with any income it earns is extra.

Thanks for the comment that if it's in a GIC/HISA the interest is taxable

We know $1,000,000 in an almost zero interest savings account drawing out $1000/wk will last approx 20 years

The plan is NOT leaving an inheritance to our adult children or anyone else. Whatever is left at the end of the day - so be it, we'll be gone so it's not a concern.

For now we have the children on title of the property that we live in.

The million I guess just needs to keep in line with inflation or does it really matter.
This information does certainly help. If the plan is to have zero inheritance for the children, then really this is a case of what do you value more and what do you want from the money.

A savings account at EQ Bank or Alterna Bank will yield 2.30% and 1.90%, respectively. EQ Bank does have a cap deposit of $500k, so for simplicity sake, Alterna might be an easier option if you just one account with easy ATM access (you can use Exchange ATMs for free) if you want to deposit the entire amount with one bank.

Now, a not so popular option could be an annuity. Not many people like it because of the fact you could earn more on your own, but then you get a guaranteed income for longer should you outlive the money. A million dollars can get you $60K to $70K a year until death so this will ensure you have money from the $1 million until death. Mind you, depending on the product (eg. spousal, single etc) will yield different things, but it isn't a bad option and it will guarantee you more income. But, because of your pension, I think this isn't a good option because this will put your tax rate higher.

I would say take half of your money and place it in GICs with Home Trust and Home Capital with Oaken Financial which has the highest interest rates. Ladder the GICs 1,2,3,4 and 5 years. Income in your case I don't think is required as you already have pensions, so just set it at annual compound. The other half, I would just stick with Alterna as your savings. You can draw on this for any big trips and expenses you might want. In your case, I think you have more than sufficient income and savings to have a comfortable retirement without having to take any more further risk. Try to keep your TFSA savings intact as that tax free growth will serve you well!
Support your local Credit Union!

Sask Pension Plan Upto $7200/yr in Credit Card spending on RRSP contributions
sask-pension-6000-annually-credit-card- ... ns-2167222
Deal Addict
Jul 3, 2006
2510 posts
1346 upvotes
porticoman wrote: Wife & I are both age 70, good health with the one-million outside of the TFSA sitting at present in a savings account.

We are mortgage free, we do not have RRSP's or RRIF's

Our guaranteed pension/income more than covers our monthly expenses ++, so the one-million with any income it earns is extra.

Thanks for the comment that if it's in a GIC/HISA the interest is taxable

We know $1,000,000 in an almost zero interest savings account drawing out $1000/wk will last approx 20 years

The plan is NOT leaving an inheritance to our adult children or anyone else. Whatever is left at the end of the day - so be it, we'll be gone so it's not a concern.

For now we have the children on title of the property that we live in.

The million I guess just needs to keep in line with inflation or does it really matter.
put 500k in EQ Bank at 2.3% = $11500
put 500k in PC/Tangerine and keep moving each time promo ends (2.4%+) = $12000
----
$23500 a year / $1958.34 a month without touching principal no need for GIC
Deal Addict
Jul 3, 2006
2510 posts
1346 upvotes
J_u_n_i_o_r_3 wrote: put 500k in EQ Bank at 2.3% = $11500
put 500k in PC/Tangerine and keep moving each time promo ends (2.4%+) = $12000
----
$23500 a year / $1958.34 a month without touching principal no need for GIC
My Current PROMO from Tangerine

Special offer: Earn 2.97% interest until September 30, 2017 on up to $500,000 in new deposits to your Tangerine Savings Account(s) and Tax-Free Savings Account(s) made between July 05, 2017 and September 30, 2017.
Member
Dec 7, 2007
380 posts
391 upvotes
xgbsSS wrote: This information does certainly help. If the plan is to have zero inheritance for the children, then really this is a case of what do you value more and what do you want from the money.

A savings account at EQ Bank or Alterna Bank will yield 2.30% and 1.90%, respectively. EQ Bank does have a cap deposit of $500k, so for simplicity sake, Alterna might be an easier option if you just one account with easy ATM access (you can use Exchange ATMs for free) if you want to deposit the entire amount with one bank.

Now, a not so popular option could be an annuity. Not many people like it because of the fact you could earn more on your own, but then you get a guaranteed income for longer should you outlive the money. A million dollars can get you $60K to $70K a year until death so this will ensure you have money from the $1 million until death. Mind you, depending on the product (eg. spousal, single etc) will yield different things, but it isn't a bad option and it will guarantee you more income. But, because of your pension, I think this isn't a good option because this will put your tax rate higher.

I would say take half of your money and place it in GICs with Home Trust and Home Capital with Oaken Financial which has the highest interest rates. Ladder the GICs 1,2,3,4 and 5 years. Income in your case I don't think is required as you already have pensions, so just set it at annual compound. The other half, I would just stick with Alterna as your savings. You can draw on this for any big trips and expenses you might want. In your case, I think you have more than sufficient income and savings to have a comfortable retirement without having to take any more further risk. Try to keep your TFSA savings intact as that tax free growth will serve you well!
This is why people should see a financial planner.

There is no consideration of taxation on this advice. The OP states that they are receiving an income from pension - but no indication of what that is. Placing all their funds into interest baring instruments could conceivably increase their respective incomes to the point that their government subsidies (i.e OAS and/or GIS) are negatively impacted and result in a clawback. This would determinately impact any returns that the client is getting from their secure investments. Proper income and cash flow planning is required to determine the best course of action relative to taxation and overall income.

There is also the issue of CIDC insurance - which the OP may value given their lack of risk tolerance. Placing $500k of funds into Home Trust/Capital/Oaken may not allow them the ability to be covered depending on their preference for ownership. They may also not be comfortable investing in a company that was nearly insolvent three months ago even with CIDC insurance in place. Even an annuity - which may/may not make sense - carries significant risks to capital if the OP and their partner die at a young age.

There are also issues of estate planning to consider - even if the OP has no intention of passing on funds to the next generation as the OP has no idea when they are going to die. As such, appropriate preparations should be in place to "hope for the best, prepare for the worst". While the OP doesn't care if the kids see a chunk of their funds, they may have a different approach if its the government taking a large portion upon passing.

OP - find a trustworthy fee based financial planner. Spend the necessary funds for a couple hours of their time - it'll be the best money you've ever spent. This situation isn't just about earning the highest rate with no risk. Its about placing your funds in the best situation relative to your individual needs/tolerances.
Deal Fanatic
User avatar
May 11, 2014
5766 posts
7782 upvotes
Rankin Inlet, NU
toolioiep wrote: This is why people should see a financial planner.

There is no consideration of taxation on this advice. The OP states that they are receiving an income from pension - but no indication of what that is. Placing all their funds into interest baring instruments could conceivably increase their respective incomes to the point that their government subsidies (i.e OAS and/or GIS) are negatively impacted and result in a clawback. This would determinately impact any returns that the client is getting from their secure investments. Proper income and cash flow planning is required to determine the best course of action relative to taxation and overall income.

There is also the issue of CIDC insurance - which the OP may value given their lack of risk tolerance. Placing $500k of funds into Home Trust/Capital/Oaken may not allow them the ability to be covered depending on their preference for ownership. They may also not be comfortable investing in a company that was nearly insolvent three months ago even with CIDC insurance in place. Even an annuity - which may/may not make sense - carries significant risks to capital if the OP and their partner die at a young age.

There are also issues of estate planning to consider - even if the OP has no intention of passing on funds to the next generation as the OP has no idea when they are going to die. As such, appropriate preparations should be in place to "hope for the best, prepare for the worst". While the OP doesn't care if the kids see a chunk of their funds, they may have a different approach if its the government taking a large portion upon passing.

OP - find a trustworthy fee based financial planner. Spend the necessary funds for a couple hours of their time - it'll be the best money you've ever spent. This situation isn't just about earning the highest rate with no risk. Its about placing your funds in the best situation relative to your individual needs/tolerances.
I definitely agree with the estate planning need for a financial planner, however in the case where the assets are non-registered and in cash, there is little in terms of gains to be made with interest income, the tax planning in this case is simple. If the funds were tied registered or in shares or stock that have not been liquidated and have tremendous capital gains accrued, I would agree that further tax planning would be required. The OP's case is fairly simple in that the funds are non-registered and in cash. Also, investments in capital gain earning assets may be tax favourable and potentially increase yield, there is little to no incentive to do so.

Having been a investor in Home Capital Group, I will just say I may be biased, but the risk with Home Capital Group is overstated. Should the deposits be shared as some individual and joint, the OP will be more than covered.

That being said, @OP, a financial planner is not a bad idea. I will definitely concede that many of us here on RFD are good at finding better financial products and yield, but not as versed in planning. A fee only financial planner can also put a plan in place for what to exactly do when you or your spouse passes away, covering funeral expenses etc.
Support your local Credit Union!

Sask Pension Plan Upto $7200/yr in Credit Card spending on RRSP contributions
sask-pension-6000-annually-credit-card- ... ns-2167222
Member
Dec 7, 2007
380 posts
391 upvotes
xgbsSS wrote: I definitely agree with the estate planning need for a financial planner, however in the case where the assets are non-registered and in cash, there is little in terms of gains to be made with interest income, the tax planning in this case is simple. If the funds were tied registered or in shares or stock that have not been liquidated and have tremendous capital gains accrued, I would agree that further tax planning would be required. The OP's case is fairly simple in that the funds are non-registered and in cash. Also, investments in capital gain earning assets may be tax favourable and potentially increase yield, there is little to no incentive to do so.

Having been a investor in Home Capital Group, I will just say I may be biased, but the risk with Home Capital Group is overstated. Should the deposits be shared as some individual and joint, the OP will be more than covered.

That being said, @OP, a financial planner is not a bad idea. I will definitely concede that many of us here on RFD are good at finding better financial products and yield, but not as versed in planning. A fee only financial planner can also put a plan in place for what to exactly do when you or your spouse passes away, covering funeral expenses etc.
I think we are both pretty much on the same page here - but let me elaborate on the need for tax planning.

If the OP and/or spouse is making around $70k each from their pension incomes, adding funds in an interest bearing investment would be practically pointless. Anything over the OAS max (approx $73k) would result in a OAS clawback of $0.50/dollar. Add into the fact that the interest income earned would still be taxable at the OP's marginal tax rate (approaching 40% with the newly added interest income) and the net impact to the OP's actual cash flow is negligible in terms of income received in pocket - which would make tying money up in 5 year GICs pointless.

I agree with the Home Capital statement - but if the OP is truly risk adverse they may not be comfortable with the slightest hint of insolvency.

I don't know if this is the case with the OP or not - but my point is that its worth looking at to ensure their solution is best suited for their individual circumstances.
Deal Fanatic
User avatar
May 11, 2014
5766 posts
7782 upvotes
Rankin Inlet, NU
toolioiep wrote: I think we are both pretty much on the same page here - but let me elaborate on the need for tax planning.

If the OP and/or spouse is making around $70k each from their pension incomes, adding funds in an interest bearing investment would be practically pointless. Anything over the OAS max (approx $73k) would result in a OAS clawback of $0.50/dollar. Add into the fact that the interest income earned would still be taxable at the OP's marginal tax rate (approaching 40% with the newly added interest income) and the net impact to the OP's actual cash flow is negligible in terms of income received in pocket - which would make tying money up in 5 year GICs pointless.

I agree with the Home Capital statement - but if the OP is truly risk adverse they may not be comfortable with the slightest hint of insolvency.

I don't know if this is the case with the OP or not - but my point is that its worth looking at to ensure their solution is best suited for their individual circumstances.
The OAS clawback would possibly be a factor at the start of the investment, but as OP has said, the plan is to not have any funds left in the future, so therefore, I would be under the impression that the funds will be used up and therefore, the interest income also drop at the same time. If the OP was to say place the funds with the savings account, the interest on $1 million would be $19K to $23K. This would affect total income at the start, but towards the end as the investments are used, the amount of interest income should go down and the clawback risk is much lower.

But really this is all hypothetical, since we are really unsure what the OPs situation in this case is :P +1 for bringing it up.
Support your local Credit Union!

Sask Pension Plan Upto $7200/yr in Credit Card spending on RRSP contributions
sask-pension-6000-annually-credit-card- ... ns-2167222
[OP]
Deal Addict
Jul 27, 2017
2180 posts
949 upvotes
Appreciate all the feedback, great input & comments to my OP...thanks to everyone

As mentioned, our current income more than covers our expenses. Our tax on income is just a few dollars, so it's not even close to any clawback

Investing the million in GIC/HISA would give us additional income which would be taxed (again thanks for the input on the available choices)

TFSA is solid earning. As of 2017 we have stopped contributing to it & see no reason to do so from here on in.

We figure there is no point to continue wealth building

This has become a million dollar problem which we reckon we won't spend [never say never] since the future is an unknown, with a 'who knows - what if' we need extra care, then the additional money would be ideal for.

Looking at 'should we gift more cash to the children as regular payouts from the surplus cash flow' over & above the Birthday & Christmas cash gifts that we currently are doing?

Since the two adult children (early 30's & late 30's) paid & worked their way through school/University, both working, no children of their own, are OK financially, pay their own way - would they appreciate getting extra cash to do whatever with, something they have refused to accept in the past - is it something folks are doing ....suggestions/comments?
Deal Fanatic
User avatar
May 11, 2014
5766 posts
7782 upvotes
Rankin Inlet, NU
porticoman wrote: Appreciate all the feedback, great input & comments to my OP...thanks to everyone

As mentioned, our current income more than covers our expenses. Our tax on income is just a few dollars, so it's not even close to any clawback

Investing the million in GIC/HISA would give us additional income which would be taxed (again thanks for the input on the available choices)

TFSA is solid earning. As of 2017 we have stopped contributing to it & see no reason to do so from here on in.

We figure there is no point to continue wealth building

This has become a million dollar problem which we reckon we won't spend [never say never] since the future is an unknown, with a 'who knows - what if' we need extra care, then the additional money would be ideal for.

Looking at 'should we gift more cash to the children as regular payouts from the surplus cash flow' over & above the Birthday & Christmas cash gifts that we currently are doing?

Since the two adult children (early 30's & late 30's) paid & worked their way through school/University, both working, no children of their own, are OK financially, pay their own way - would they appreciate getting extra cash to do whatever with, something they have refused to accept in the past - is it something folks are doing ....suggestions/comments?
Gifting cash to your children isn't necessarily a bad idea, however, once transferred, you no longer have control on that. Since your money is in cash at the moment, the estate will have little taxes to deal with other than the accrued interest income should they be in GICs or HISA. Perhaps, it isn't a bad idea to discuss your estate options with your children (assuming you have a good relationship with them.). If all else, have a will made so that your wishes are made known, Another option could be to leave some of your estate to a charity of your choice should you want to benefit the less fortunate or a cause you really believe in.

This being said, I am not the most knowledgeable about estate and tax issues when it comes to inheritance. I do know in your case, it should be somewhat minimal, but a estate planner may be a better resource than this forum.

Here is an article about avoiding some common tax mistakes for inheritance.

https://www.theglobeandmail.com/globe-i ... e15439582/
Support your local Credit Union!

Sask Pension Plan Upto $7200/yr in Credit Card spending on RRSP contributions
sask-pension-6000-annually-credit-card- ... ns-2167222
Deal Addict
Oct 1, 2006
2562 posts
3000 upvotes
Montreal
Maybe have a look at an annuity. It is safe and will pay you for the rest of your life more than 5k a month after tax.
Deal Expert
Aug 2, 2001
18112 posts
9171 upvotes
porticoman wrote: Appreciate all the feedback, great input & comments to my OP...thanks to everyone

As mentioned, our current income more than covers our expenses. Our tax on income is just a few dollars, so it's not even close to any clawback

Investing the million in GIC/HISA would give us additional income which would be taxed (again thanks for the input on the available choices)

TFSA is solid earning. As of 2017 we have stopped contributing to it & see no reason to do so from here on in.

We figure there is no point to continue wealth building

This has become a million dollar problem which we reckon we won't spend [never say never] since the future is an unknown, with a 'who knows - what if' we need extra care, then the additional money would be ideal for.

Looking at 'should we gift more cash to the children as regular payouts from the surplus cash flow' over & above the Birthday & Christmas cash gifts that we currently are doing?

Since the two adult children (early 30's & late 30's) paid & worked their way through school/University, both working, no children of their own, are OK financially, pay their own way - would they appreciate getting extra cash to do whatever with, something they have refused to accept in the past - is it something folks are doing ....suggestions/comments?
You are in a very fortunate position where it appears that you and your partner are both in reasonably good health, your children are both working and in reasonably good health, and you find your have a giant surplus of money that continues to grow because you are happy with your budget and it happens to give you extra every month. Also you mention that attempts to gift your children money in the past has failed.

While it may not be popular, why not look towards gifting the some of the money towards charitable causes that are close to your heart? To be honest, this is the route that many wealthy individuals take who cannot spend all their money, and while your scale is smaller (no offense intended - I'm thinking of Gates / Buffet who pledged tens of billions), you certainly fit well within this realm. You could easily take the interest you earn and donate it to a charity.

One areas that charities have moved into is annuities. You donate a fixed amount and you are then given a yearly amount. This link explains some of the higher level details:
https://www.ualberta.ca/giving/ways-to- ... -annuities


Investing needs to take into account things like your goals and risk tolerance. I suspect it's hard to figure out what to do because you truly have no goals for this money - that makes it difficult to invest. My hope is that perhaps by introducing the idea of charitable giving that you may see that as a potential goal for at least some of the funds.


As someone said, I think the best thing for you to do is visit a fee based financial planner to ensure you are doing whatever you want efficiently (e.g. you are maximizing your deductions so you can contribute even more to charity). My only caveat is to work at defining your goals first because this is the most important step - before you can plan you need to know what you are planning for.
Deal Addict
Oct 4, 2009
3326 posts
2539 upvotes
Montreal
toolioiep wrote: I think we are both pretty much on the same page here - but let me elaborate on the need for tax planning.

If the OP and/or spouse is making around $70k each from their pension incomes, adding funds in an interest bearing investment would be practically pointless. Anything over the OAS max (approx $73k) would result in a OAS clawback of $0.50/dollar. Add into the fact that the interest income earned would still be taxable at the OP's marginal tax rate (approaching 40% with the newly added interest income) and the net impact to the OP's actual cash flow is negligible in terms of income received in pocket - which would make tying money up in 5 year GICs pointless.
OAS clawback rate is 15%, not 50%! Moreover you don't pay tax on the OAS you don't receive so the additional marginal rate from being in clawback territory is even less than 15%.

Perhaps you were trying to prove your point about taking internet advice.Winking Face

Top