Community & Giving

By: Robert Rothenberg, CFA, CIWM, FCSI

When new prospects come to see us, they typically ask about our rate of return assumptions when projecting their financial success in retirement.

Many individuals look at the long-term average for the stock market at 10% or a blend of fixed income and equities and average 7% over retirement when calculating the income and portfolio growth of their investments.

When people are working and in the accumulation phase of their life and saving money on a regular basis to fund their retirement, using an average rate of return is fine as it doesn’t matter whether your portfolio performs well at the start and underperforms towards the end or underperforms at the start and excels at the end.

In retirement, many other factors come into play when determining if your income is sustainable. One of the major factors is the sequence of returns.

Poor returns at the start of retirement while withdrawing funds may make it extremely difficult to ever catch up. Bad timing can show that funds can be exhausted using a 5% withdrawal rate and an average rate of return of 10% in less than 20 years while the same withdrawal rate and a 7% average rate of return can have more funds than what an investor had initially when returns are strong at the onset.

The following illustration shows three different examples. The first shows a retiree lucky enough to retire in 1989 having started with $1 million taking out $50,000 per annum indexed to inflation with their funds growing to over $3,000,000 in 20 years.

The second example shows the same retiree with the sequence of returns reversed with the same $1 million and the same withdrawals. This retiree would run out of money in 18 years even with an identical average return.

The third example shows a retiree earning 7% which is considerably less than 10% but having close to $1.3 million after 20 years.

A cash wedge strategy would be highly recommended when starting the withdrawal phase of your life. Having 18 – 24 months of income invested in cash equivalents and short-term bonds which is used to fund your withdrawals early in retirement will help ensure success if the market declines dramatically early on.

By having this cash wedge, you won’t need to sell any of your equity holdings at low prices to fund your retirement allowing time for them to recover.

In retirement, consider less volatile stocks with decent dividends or dividend growth for most of your equity exposure. When the 2008 meltdown occurred, stocks with less volatility than the overall market performed significantly better in aggregate.

Investing similarly to a pension plan as well having some funds in private infrastructure, private real estate and/or private equity can also support this plan.

The same can be said for inflation which has been a non-factor for the better part of a decade. The historical average has been slightly more than 3% in North America with average annual rates in the 1 – 2% range. Indexing your withdrawals to inflation early on at higher rates will have a similar result as poor returns early in your retirement.

Try to keep the increase of your withdrawals below the inflation rate as this can help sustain your capital as most illustrations do index income withdrawals fully with inflation.

Taxation and costs also play a part in the success of your retirement. Maximizing contributions to Tax Free Savings Accounts is a must for individuals with non-registered funds. This can reduce the income tax payable on interest and dividend income along with capital gains substantially.

Consider pulling out some of your RRSP funds prior to age 71 if you are in a relatively low tax bracket to offset paying a higher amount of tax down the road.

Many individuals who do not have a private pension plan should consider taking out a small RRIF or annuity at age 65 to take advantage of the $2000 pension income credit.

Costs can also affect a successful retirement and eat away at returns. Ensure your overall costs are reasonable for the advice you are receiving.

By reviewing your retirement plan regularly taking into account the variables mentioned above will help you succeed where many fail.

As parents, many of the most important financial conversations don’t stop with your own plan. Whether your children are launching their careers, paying off student debt, or thinking about buying their first home, the financial decisions they make early on can have a lasting impact.

While young adulthood often comes with competing priorities and limited experience, it’s also a critical time to establish strong financial habits. This article outlines the foundational planning concepts young adults should understand, and highlights where guidance, structure, and early support can help set them on a more confident financial path.

Why start financial planning early?

Time is one of your greatest financial advantages a young person has. Starting early allows savings and investments to benefit from compounding, where money earns returns, and those returns generate returns of their own. Even modest contributions made consistently can grow meaningfully over time.

Beyond growth, early financial planning helps young adults:

• Reduce financial stress
• Avoid costly mistakes
• Make intentional choices about spending and saving
• Feel more prepared for major life milestones

A solid plan provides clarity, not restriction, and helps ensure money supports the life they want to build.

Build a strong foundation

Before investing, it’s important to establish a stable financial base.

Create an emergency fund

An emergency fund acts as a safety net for unexpected expenses such as car repairs, medical costs, or job changes. A common guideline is to aim for three to six months of essential living expenses in a high‑interest savings account.

Manage debt strategically

Many young adults carry student loans, credit cards, or car loans. Not all debt is bad, but high‑interest debt can significantly slow progress. Prioritizing repayment, especially for high‑interest balances, can free up cash flow and reduce financial pressure over time.

Understand your Canadian tax-advantaged savings options

Canada offers several powerful registered accounts designed to help you minimize taxes and save more efficiently.

Tax‑Free Savings Account (TFSA)

Despite its name, the TFSA isn’t just for cash savings. It’s a flexible account that allows different types of investments to grow tax‑free, with withdrawals also tax‑free. TFSAs are ideal for shorter‑ or medium‑term goals, or as a complement to long‑term investing.

Registered Retirement Savings Plan (RRSP)

RRSP contributions are tax‑deductible, which can be especially valuable as income increases. While retirement may feel far away, starting early, even with small amounts, can significantly reduce the effort required later.

First Home Savings Account (FHSA)

For young adults planning to buy their first home, the FHSA combines features of both a TFSA and an RRSP. Contributions are tax‑deductible, and qualifying withdrawals for a first home are tax‑free, making it a powerful tool for future homeowners.

Investing with purpose

Investing doesn’t require perfect timing or expert predictions. What matters most is having a clear strategy aligned with goals, time horizon, and comfort with risk.

Young adults typically have longer time horizons, which can allow for greater exposure to growth‑oriented investments. That said, diversification and discipline remain essential. A well‑constructed portfolio helps balance risk while keeping you invested through market ups and downs.

Avoiding emotional reactions to chase trends or react emotionally to short‑term market movements. Consistency and patience are often the most effective investment strategies.

Protect what you’re building

As a young adults life grows, so does the need for protection.

Insurance, such as disability or life insurance, can help safeguard income and loved ones if the unexpected occurs. While it’s not always top of mind early on, having appropriate coverage in place can prevent financial setbacks later.

Financial planning is not one‑size‑fits‑all

Everyone’s financial journey looks different. Career paths, family plans, lifestyle goals, and values all play a role in shaping the right strategy. That’s why financial planning is most effective when it’s personalized and reviewed regularly as circumstances evolve.

Working with a trusted wealth management professional can help you:

• Clarify goals and priorities
• Build a realistic, adaptable plan
• Navigate complex decisions with confidence
• Stay accountable over time

How parents can help

Supporting adult children financially doesn’t always mean providing capital. In many cases, the most valuable support is helping them establish good habits, understand their options, and put a thoughtful plan in place early.

Encouraging conversations around saving, investing, debt management, and long‑term goals can help young adults avoid common pitfalls and gain confidence in their financial decisions.

If your children or grandchildren are at this stage of life, we’re happy to be a resource, whether that means answering questions, providing guidance, or helping them build a plan that complements your broader family goals.

Feel free to share this article with them, or contact us to discuss how thoughtful planning today can support your family across generations.

Recent developments in the Middle East have introduced renewed geopolitical uncertainty into global markets. As expected, the initial reaction included market volatility, rising oil prices, and increased demand for traditional safe‑haven assets such as gold and the U.S. dollar. These moves reflect short‑term caution rather than a fundamental shift in the long‑term economic outlook.

The primary area of focus has been energy markets. A significant portion of the world’s oil flows through the Strait of Hormuz, and concerns about potential disruption have pushed oil prices higher. That said, global oil markets entered this period relatively well supplied, and OPEC+ has already taken steps to increase production—factors that may help limit longer‑term impacts if the conflict remains contained.

Higher energy prices can contribute to inflation pressures, which is why bond markets have been sensitive to these developments. For now, markets appear to be pricing in uncertainty rather than a lasting economic shock. History shows that geopolitical events often create short‑term volatility, while long‑term market performance continues to be driven by fundamentals such as earnings, growth, and valuation.

Our perspective at Rothenberg Wealth Management

Periods of uncertainty reinforce the importance of staying focused on fundamentals rather than reacting to headlines. At Rothenberg, we have access to Harbourfront institutional quality investment solutions that are actively managed to take advantage of long-term opportunities in the markets. Speak with a Rothenberg Wealth advisor to find out more about how these investment solutions can help you achieve your financial goals.

Read the full, in‑depth article here. 

Tax season is here, yet again. If you’re a tax filing veteran, you’re likely comfortable filing your tax return yourself, without any help. There’s satisfaction in doing it yourself and as it turns out, you might even enjoy it.

Canadians still love their tax refunds, but with an increasing number of people missing refunds due to costly mistakes, you might be torn over whether you should go the do-it-yourself route or if now is the time to employ the services of a tax expert.

An error on your tax return can lead to a penalty, interest charges or even an audit by the CRA. Perhaps most importantly, however, you may miss out on valuable tax deductions or credits.

When To Do Your Taxes Yourself

Preparing your own tax return should be easy if your financial situation is simple. We’ll call these people Tax DIYers, where DIY stands for “Do-It-Yourself!”

TurboTax and other off-the-shelf tax preparation software options will walk you through a series of questions about your finances and alert you to any credits and deductions you may qualify for. They don’t require any math calculations or in-depth knowledge of the tax code.

But how do you determine if your position is simple?

1. If preparing your taxes just requires you to pull information from a handful of documents prepared by others, such as the T4, you’ll find basic tax software suitable.
2. If your tax situation hasn’t changed over the last year, you work for an employer, are single with no kids, etc., your tax return would be very straightforward.
3. If nothing is going on in your life that can complicate your tax situation, it might not be worth paying a professional.

When to Hire a Professional

You might be better off hiring an accountant than trying to do your tax return yourself in some situations.

Tax preparers stay up to date on tax codes as well as provincial and federal tax laws.

An accountant can recommend what deductions and exemptions you qualify for and help you plan for future growth by informing you about any tax requirements changes.

Hire a tax expert in case of:

1. Major Life Changes

If you recently got married (congratulations), you might need a professional to guide you on the tax filing status to use. While most couples prefer filing jointly, there are some situations where it makes more sense to file separately.

It’s not just marriage. Other life milestones like expanding your family and having a child, losing or getting a new job, graduating from college and relocating could all impact your tax return and your potential total refund.

An accountant can help you learn about any new benefits or tactics to minimize your tax liability. This way, you will be able to take advantage of every tax break available to you.

A tax professional can also help you learn to navigate your tax return this year, so you feel confident doing it yourself in the future. You can always revert to doing your own taxes if you don’t experience any other major life changes the next year.

2. Failing to Pay in the Past

If you failed to file necessary tax returns in the past years, reach out to a tax expert.

They know about the programs offered by the CRA for individuals in this situation. A tax accountant can help you file years’ worth of returns, something that might take you a long time to master, especially as the April 30 tax filing deadline approaches.

This gives you confidence that your tax return is filed correctly and the peace of mind that you’re in good standing with the CRA.

3. Owning a Business

If you are a business owner, you should probably consider hiring an accountant to prepare your tax return.

Almost every financial transaction comes with some kind of tax consequence. Your accountant will prevent you from making any costly mistakes, help you report tax items accurately, and maximize deductions.

You should also use a tax preparer if you purchased rental property during the year.

4. Simply Not Having the Time

Tax preparation involves gathering documents, reviewing the procedures, and filling out tax forms. It is a notoriously slow and boring process, which is why so many of us dread it and postpone it until the last minute.

While doing this might seem like a simple weekend project for some Canadians, for others, not so much. Maybe you feel that the time you’d spend doing your taxes would be better spent elsewhere.

Consider hiring a tax expert if you lack the time or patience to prepare your own return.

In Conclusion

There is no universally correct answer when it comes to filing your taxes with software versus hiring an accountant or tax professional. Ultimately, the choice comes down to the complexity of your tax situation.

If your tax situation is fairly straightforward and you have some confidence in your ability to work step-by-step through tax software, it’s relatively cheaper to do your own taxes this way.

If your tax situation is more complicated, hiring a tax preparer can be worth the expense. Just ensure the preparer has the right credentials and stellar testimonials to avoid being a victim of tax scams.

Over to You…

The official deadline to file your Canadian personal income tax return for 2025 and pay any taxes owed to the Canada Revenue Agency (CRA) is April 30, 2026.