Income Today, Legacy Tomorrow: Investment Picks for Canadian Retirees

When you retire and your regular paycheque stops, a new challenge appears:

How do you create steady monthly income without giving up the long-term growth your estate depends on?

The good news: you don’t have to choose.
With a balanced mix of stable income, diversified investments, and a realistic withdrawal strategy, Canadian retirees can enjoy life today while still building a meaningful legacy.

At Armchair Financial, our philosophy is simple:
Retirement planning should be easy, clear, and sustainable.

Let’s walk through what that looks like in practice.

1. Start With Your Guaranteed Income Base

Before tapping into your investment accounts, map out the reliable income sources you’re already entitled to:

✔ CPP (Canada Pension Plan)

Inflation-protected income for life, based on your work history.

✔ OAS (Old Age Security)

A steady base for most Canadians, unaffected by market ups and downs.

✔ Employer Pensions

Whether you have a defined benefit plan (predictable monthly income) or defined contribution plan (investment-based), pensions often cover a large portion of essential expenses.

Once you know your guaranteed retirement income floor, your investment strategy becomes much clearer — and far less stressful.

2. A Real-World Sustainable Retirement Income Portfolio

Here’s a simplified version of the model Armchair personally uses — I find it provides me with more than enough income now (supplementing my OAS, CPP and workplace pension), while also providing growth along the way:

Personal Portfolio Example

Why this works

  • ZGRO → global growth engine powering long-term compounding

  • XDIV → high-quality dividend growers

  • ZLB + ZLU → smoother performance through volatility

  • XDU → dependable U.S. dividend exposure

A globally diversified mix that pays income, stays simple and sustainable over time. Can't argue with that!

3. An AI-Suggested Portfolio (Very Simple + Very Low Cost)

I asked AI to create its own suggested model as an alternative to mine. Here is is, built entirely from low-cost TSX-listed ETFs.

AI Suggested Portfolio

  • 40% — VBAL (Balanced, globally diversified)

  • 20% — VEQT (All-equity global growth)

  • 15% — XDIV (Canadian Dividend Growth)

  • 15% — ZLB (Low Volatility Canada)

  • 10% — ZAG (Canadian Bonds)

Why it works

  • VBAL does most of the rebalancing for you

  • VEQT boosts long-term growth

  • XDIV + ZLB add quality and stability

  • ZAG provides a reliable bond buffer

Another good “set it and relax” portfolio that covers income, growth, and risk management.

4. Side-by-Side Portfolio Comparison - Archair's vs. AI's 


Feature

Personal PortfolioAI Suggested Portfolio
# of ETFs     5          5
Main Growth Engine     ZGRO (80%)          VBAL + VEQT
Dividend Exposure     XDIV, XDU          XDIV
Low Volatility Buffers     ZLB, ZLU          ZLB
Bond Exposure     Inside ZGRO          ZAG + VBAL
Rebalancing     Mostly automatic          Mostly automatic
Complexity     Moderate          Very simple
Focus     Growth + quality + low vol          Simplicity + income + diversification

5. Complementary Income Sources

If you want to add a bit more complexity...which I do NOT necessarily recommend, feel free. Here are some ways that retirees round out their retirement income plans: 

REITs

Reliable, rental-style monthly income.

Bond ETFs

Predictable cash flow that helps cushion volatility.

Covered-Call ETFs

Higher income, but lower long-term growth. Best used sparingly.

Global ETFs

Prevent overexposure to the Canadian market.

6. The Withdrawal Strategy: The Missing Half of Retirement Planning

A great portfolio is only half the equation.
How you withdraw from it matters just as much.

Test your plan with free tools

Tools like MayRetire.com let you plug in:

  • CPP + OAS

  • Pensions

  • Portfolio balances

  • Spending targets

  • Withdrawal rates

A simple way to “preview” your retirement before making big decisions.

Why VPW often beats the 4% rule

The classic 4% rule is simple, but rigid.

VPW (Variable Percentage Withdrawal) adjusts annually based on your age and portfolio value, helping you:

  • Take more in strong years

  • Take less during downturns

  • Reduce the risk of running out

  • Coordinate seamlessly with CPP, OAS, and pensions

And it only needs updating once a year. Fantastic!

7. Principles for Retirees Who Want Both Income and Legacy

  • Diversify broadly—by geography and asset class

  • Keep fees low

  • Maintain growth exposure well into retirement

  • Avoid chasing ultra-high yields

  • Review your estate plan regularly

  • Use CPP, OAS, and pensions as your stability base

When your portfolio supports both present income and future growth, you create the freedom to enjoy today and leave something meaningful tomorrow.

Now simplify your portfolio, and get your plan in place. You'll love the peace of mind that having a solid plan provides, and you'll be ahead of 90% of your friends and family! 

Full disclosure: this post was written collaboratively with AI, with my input, ideas and editing. Leave me a comment below and let me know what you think!

Armchair

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