Retirement Planning in Ontario

As North Americans live longer, the concept of retiring with an income focused investment portfolio has taken on new meaning. For many, a reliable stream of income from an investment portfolio is a goal that can be achieved with the help of a knowledgeable and experienced investment advisor. Transitioning a growth portfolio from a capital gains focus to a retirement income vehicle is an important step in becoming financially stable as you age.

Investment portfolios built primarily to generate income while including the potential for conservative capital growth can be an excellent way for retirees to make their money stretch further. For the past many years with interest rates much higher than today’s, a typical income producing portfolio would have included a heavy concentration of fixed income vehicles such as bonds, GIC’s, perhaps some preferred shares and even bond funds. With current interest rates in the low single digits most fixed income portfolios no longer yield sufficient income. And holding a bond mutual fund with rates poised to rise, exposes unit holders to significant capital loss potential. Many wealth management firms in Toronto offer the expertise to build growth and income portfolios, customized for each individual client’s needs. For most investors the bulk of the income will come from carefully selected blue chip dividend paying stocks with a long history of rising and uninterrupted dividend payments. Ultra high net worth wealth management firms providing private wealth management services are skilled at creating and managing a Canadian conservative growth strategy.

Keeping Volatility Risk Low

Diversification into varied sectors of the economy is a key concept in portfolio construction. Among the categories that are normally considered for income is the real estate sector. Dividend paying Real Estate Investment Trusts, or REIT’s, can be a suitable vehicle for inclusion in a low volatility income portfolio. The careful selection of REIT’s themselves can be a diversification tool. Since REIT’s are created to purchase and manage real property, income can come from industrial, commercial or residential property in any chosen geographical location. An additional benefit to using REIT’s to diversify the source of income for retirement planning is the liquidity of your REIT holdings. REIT’s are listed on the stock exchanges and their shares can be purchased and sold like any other stock or bond.

For help on achieving your retirement goals, we invite you to contact us at Enriched Investing Incorporated to learn more about the investment process from one of the best wealth management firms in Toronto.