Real Advice Blog

Both Registered Retirement Savings Plans (“RRSPs”) and Tax-Free Savings Accounts (“TFSAs”) are important vehicles in helping to build your nest-egg before retirement. They each offer tax incentives and encourage you to invest for your future. We are often asked if it is better to make a TFSA contribution or an RRSP contribution. While both vehicles have advantages, their differences make them more suited for different personal circumstances, income levels and goals. The following table provides a quick comparison of the attributes of RRSPs vs. TFSAs: Is it better to contribute to an RRSP or to a TFSA? It depends on many factors, including your current income level as well as that of your spouse, if applicable, what you think your future income levels will be, your age and your cashflow goals and needs. If you have already contributed the maximum amount to your RRSP, you should contribute the maximum amount permitted to your TFSA before depositing funds into your non-registered account. If you have both RRSP and TFSA contribution room, then the following should be considered: ~ contributing to an RRSP and TFSA have almost equivalent results when your income levels and the marginal tax rate at the time the RRSP contribution is made is the same as your anticipated income level and tax rate when you withdraw from your RRSP. ~ Making an RRSP contribution is advantageous when your current income and marginal tax rate are higher than what you expect your income and marginal tax rate to be when you take money out of your RRSP. ~ if you and your spouse have significantly different income levels, contributing to an RRSP creates the opportunity to split income with your spouse down the road. You can make a spousal contribution, which means you will get the tax deduction now, and the income will be taxed in your spouse’s hands down the road. In addition, you may be able to take advantage of pension splitting once your RRSP is converted into a RRIF, which can result in further tax savings. ~ Making a TFSA contribution is more advantageous to you if: You might need access to capital in the shorter term. You can withdraw money from your TFSA tax-free, and the withdrawal will be added back to your TFSA contribution room in the following year. You are currently in the lowest tax bracket. If earnings are expected to increase and you will be in a higher tax bracket in a few years, make a TFSA contribution now and then use the amounts in your TFSA to make an RRSP contribution when you are in a higher tax bracket so that the tax savings are greater. It is anticipated that your marginal tax rate at the time of RRSP withdrawal will be higher than the marginal rate when you contribute. If your anticipated tax rate will be higher down the road, you will be negating any tax benefit you receive now. You are over age 71 and can no longer make RRSP contributions. RRSP contributions will result in withdrawals down the road which are high enough to result in a clawback of old age security. You are close to retirement age and have little savings or pension, so RRSP or RRIF withdrawals may result in the loss of the government guaranteed income supplement and other benefits which are based on earned income levels. ~ It is worth noting that even if you have higher income levels upon retirement, once you have maxed out your TFSA contributions, it may still make sense to contribute to your RRSP now. Instead of taking advantage of the tax deduction right away, you can save it for down the road to offset your higher income levels. As you can see, a simple question does not always have a straightforward answer. The right answer for you will depend on your personal circumstances. Mirador can help! With over 30 years of experience in investment management and wealth advisory services, we can help you decide whether an RRSP contribution or TFSA contribution is best for you to help build your nest-egg for retirement. We can help ensure your nest-egg is working for you now and through your retirement years to provide excellent income and comfortable stability in your portfolio values so that your retirement lifestyle dreams become reality. To learn more visit miradorwealth.com.

In part 4, we discussed a logical, systematic, statistical and scientific approach to selecting and weighting dividend investments. This approach creates a major foundation for what we do at Mirador – it tells us what we should want to buy. BUT…and it’s a BIG, BIG BUTT……35 years in the business has taught me that the markets are not always logical, systematic, statistical and scientific. Instead, markets often go through periods when they move more on emotional factors like greed, fear and hope. And in these times, people start making decisions more influenced by their psychological biases and heuristics. This results in investors driving the markets in directions and to extremes that are not supported by the data or financial logic. For this reason, Mirador’s security selection and implementation always have a technical analysis overlay. As good as a company might seem on paper and in a model, we adjust our buying amounts and timing with technical analysis. Technical analysis is the study of price and volume. Prices change when there is a misbalance between supply and demand. Mirador technical analysis is artificial intelligence applied as a tool to 50-year-old proven indicators of trending and regression. Mirador’s technical analysis helps us determine when demand is in control over supply and driving prices upwards or vice versa. In the end, the price is right, and that’s what must be prioritized in a decision – not a model ranking, a research report, or a story about the company in the financial media. For Mirador, the quantitative facts and the technical analysis guide us towards better portfolio management decisions that provide high income and stability of capital. Call me at 403-718-0125 or visit our website at miradorwealth.com if you’d like to learn more.

Many dividend growth portfolio portfolios do not focus on what matters the most. With dividend growth investing, company data matters the most. For dividend growth investing, certain specific company reported data are the facts of companies’ results that have historically led to strong support of the existing dividend and likely growth in the future dividends. So, how do you know what data factors to focus on for the best dividend growth model? A popular website promotes a “triangle” of the trend of 3 factors that seem intuitively logical, but it is not clear if the 3 factors are correlated to dividend sustainability or growth. And I can’t ascertain the significance or view of any triangle, hmmmmm doesn’t sound research-based or reliable for dividend growth. Mirador has completed numerous single variable tests (SVT) to determine the actual historical company factors that have led to dividend sustainability and growth. From the SVT results, we create multivariable models that combine the most important single variables for dividends. Then, we add other variables that the SVT shows are important for stability, capital security, and appreciation. These variables help to avoid a sort of value-trap whereby a dividend is really good, mainly because the stock has been so awful. These multivariable models are tested extensively to discover the best weighting for each variable. Then, we monitor the changes in factor importance over time using functions on the Bloomberg Professional Terminal, and we adjust the factor weightings to optimize the security selection results. This fact-based, systematic, statistical, and scientific process eliminates biases and conflicts that often occur in more traditional security selection processes. The results speak for themselves – the Mirador Income and Stability fund has had a distribution of 7% or greater in 4 of the past 5 years; it has been set at 7.5% for 2025. And the results are timeless – this is the goal of future-proofing your income investing portfolio. If you would like to learn more about factor-based quantitative and technical investing, call me at 403-718-0125 or visit our website at miradorwealth.com

Dividend growth does not always work well throughout the complete investment, economic, and market cycles. In some parts of the cycle, companies that don’t typically have significant dividends, such as oils, base metals, gold, and forestry companies, tend to outperform. So, if you want to have consistent income, capital protection, and modest gains throughout the market cycle, you need to have more than just dividend growth in your income investing portfolio. Mirador adds fixed income investing and covered call writing to diversify your income sources rather than depending on only dividend growth This income style diversification improves the consistency of your income and capital value throughout the multi-year market cycle. Fixed income will often outperform when stocks are out of favour. Call writing can give the portfolio exposure to and income from sectors that are not typically known for healthy dividends and dividend growth. At Mirador we actively change the allocation between the three income styles based on the relative price strength, relative yield analysis, and volatility comparisons of the 3 programs. Call me at 403-718-0125 or visit our website at miradorwealth.com if you would like to learn more about different styles of income investing and how to apply them in different parts of the investment, economic and market cycles.

Most dividend growth portfolios are considered buy-and-hold or set it and leave it type portfolios. Easy-peazy lemon squeezy, as my daughters used to say. They are low maintenance, low effort, and low work. Simple and straightforward …… perfect for the laziest investment advisors who make too much money doing nothing. Maybe they check it out every December or January and tweak them to make everyone happy that something has been done. This does not often work if you want good cash flow now and better cash flow in the future, while avoiding discomforting instability in the value of your hard-earned capital. To future-proof your income portfolio, it needs to have active optimization of the holdings regularly throughout the year. A successful dividend growth program needs frequent adjustments to ensure your capital produces the best income now and in the future. It takes a keen eye, plenty of close monitoring, considerable number crunching, and a lot of hands-on experience. Mirador is the only investment firm actively managing portfolios for income and stability now and throughout the future of your investment lifecycle. We are the only full-service investment firm using quantitative and technical models to maximize income and stability. It’s worth repeating, we do our own research and analysis with no outside influences. Investing for income and stability is the only thing we do at Mirador. That’s why we are good at it – our intense focus on that single objective makes us the best. It’s long hours, expensive data, labor-intensive modelling, hours of high-level institutional trading, and it’s stressful. But it’s worth it. It pays well for our clients, and I live for the challenge it presents daily. Call me at 403-718-1025 or visit our website; miradorwealth.com for more information about income investing done better.

Learn strategic tax and cash flow planning tips for your pre-retirement and retirement years to minimize taxes and maximize your retirement income.

Mirador’s Income and Stability Fund offers a 7.5% yield with lower volatility and drawdowns — helping you grow your wealth while staying comfortable through market ups and downs.

Mirador’s Income and Stability programs are multi-style portfolios designed to provide exceptional income while maintaining comfortable stability in the capital value of your portfolio. One of the most important styles of income investing in our Income and Stability programs is called dividend growth investing. This style identifies companies with financial data that has often led to the company increasing their dividends or at least having a low likelihood of reducing their dividend. Dividend Roots Mirador’s dividend growth roots date back to the early 2000s when we designed our first system using the CPMS (Computerized Portfolio Management System) single-variable back test service along with their multi-variable back testing capabilities. Since then, we have continued the system using the Bloomberg Professional Terminal and advanced Excel databases and APIs. During these two decades of dividend growth investing experience, we have continually improved and optimized our dividend growth systems and processes. But The Influencers Say I have spent considerable time on various websites and social media platforms researching what others are saying about dividend growth. Unfortunately, there seems to be a large number of writers and influencers with: Limited experience Inadequate investment education No “skin-in-the-game”; it’s pretty easy to write and pretend to inform people, but it’s a completely other level when you are investing tens of millions of dollars of yours and other people’s money using your own systems and methods like we have been doing at Mirador for almost 35 years. Decades of hands-on experience brings one a whole new level of education. Can you wait that long? Many investors are like Mirador’s retired and pre-retirement clients – they need excellent income now without taking excessive risks that could impact the capital value of their portfolios. Yet so many dividend growth portfolios or funds I have seen have low current yields, with only hopes of dividend growth that will turn that mediocre yield into a better yield. A large growth rate applied to a miniscule initial dividend can take a long time to become decent income. Will it happen in time? 100 % growth of almost nothing remains almost nothing! Why wait? Will you really be well served by an investment with a 2% current yield just because it has a juicy history or hope of a 5% dividend growth? This investment would take over 27 years for its yield to be the same as the 2025 distribution yield of Mirador’s Canadian Income and Stability Fund. Lots could happen in those 27 years to derail the company and its dividend. The clients we serve cannot wait, they want to have their capital working for them now and paying them income now. Growth + Balance For this reason, Mirador’s dividend growth programs balance the goal of excellent income now, with growing income in the future from potential increases in dividends. The growth of yield, along with modest but good capital appreciation, helps our clients live well in most any likely inflation environment. The Proof is in the Yield The 2025 yield for Mirador’s Canadian Income and Stability Fund was set at 7.5% at the beginning of the year. That’s 5.5% above the current inflation rate and 4.2% above the Canadian 10-year bond yield. Plus, the Mirador Income and Stability fund’s distribution is mostly dividends and capital gains, so it is highly tax effective in non-registered accounts. To get the same after-tax income as the Mirador Income and Stability fund from a bond or GIC would require an interest yield of approximately 10%. Call me at 403-718-1025 or visit our website; miradorwealth.com for more information about dividend growth investing done better.

There are age old statements that often create considerable debate that generally go like this… “Its not about the Money” “There is more to it than Money”