I had an extra goal that I wanted to achieve when deciding which stocks to purchase in order to add dividends to our non-registered account. As previously mentioned, we withdraw some or all of the dividends that we receive each month to use as income to pay our monthly bills. Up until 2017, the dividends that we were paid in the first and third months of each quarter (e.g. January/March) far exceeded the ones we received in the second month (e.g. February). While we made more than enough dividends in the first and third months to cover our average monthly expenses, the second month always fell short, thus requiring some planning to save up extra money for those months. In 2017, we finally had additional funds to invest and so I was able to tackle this issue. While making the payout of the three months equal is not reasonably achievable, I wanted to get to the point where the second month could at least cover a normal month's expenses. I therefore focused on purchasing stock that I was interested in anyways, but which happened to pay in the second month, or at least monthly.
I had several reasons for choosing to move stock in-kind as opposed to selling in the RRIF, making a cash withdrawal and re-purchasing the same stock in the non-registered account. I saved the two $9.99 transaction fees for the sale and purchase, but that was inconsequential. More importantly, it was an easy process, taking a simple phone call to my discount broker Scotia iTrade to make the in-kind transfer happen. If I had sold stock and then purchased, I would have to wait 5 days for each of the transactions for the trades to settle and could have missed out on a dividend payout in the interim. And there was always the chance that after selling a stock, the price might soar and I would lose money trying to buy it back. With the in-kind transfer, I controlled the price that was used for the transfer, being able to pick between the low and the high price that the stock reached that day, up to the point that I requested the transfer. I chose the low price, so that I could transfer out more stock while still maintaining close to the minimum RRIF withdrawal. The only thing I would do differently next year is to wait until later in the day to make the transfer, since it would give me a longer period of time from which to choose a price. I also found out that I could transfer more than one stock as part of my RRIF withdrawal, but the stocks had to be Canadian. I could not transfer a US stock from my RRIF into my US non-registered account.
We had one more unplanned investment opportunity in our non-registered account which arose towards the end of 2017. In 2016, HNZ Group (HNZ.A) cut their dividend payout and as a result, the value of our stock plummeted and we lost the income generated by those dividends. We thought about selling the stock, but since we had lost over 50% the value of this holding, we were not going to be able to buy much with the proceeds anyways. So rather than lock down the loss, we decided to hold onto the stock for a while to see if it rebounded. Towards the end of 2017, we were notified that the president of HNZ Group was offering to buy up all of his company's stock at a much higher price than had reached for over a year. Because of this forced sale, we recouped about 85% of our original value. Now we had a new chunk of money to invest in dividend paying stocks, as well as a small loss that we could carry forward to a future tax year to offset a future capital gain. With the inheritance investment, the RRIF transfers and the investment from the HNZ sale, I am happy to report that our second month dividend payout now is large enough to sustain itself for a normal expense month, without the need to borrow funds from a previous month. Mission accomplished.
All in all, we continue to be in good position and ahead in terms of our retirement plan. In 2018, I will turn 55 and will be eligible to collapse my Locked in Retirement Account (LIRA) and turn it into a Locked-in Income Fund (LIF). Given that my birthday is at the end of the year, I will probably wait until the beginning of 2019 to do so, rather than add a new income stream so late in the year. This will probably become a topic of discussion for next year's Year In Review blog.
From a social aspect, we are still busy as ever, with no plans to slow down. We still have not had the time to tackle many of the hobbies and activities on the original to-do list that we made when we first retired. In 2017, we continued to be lucky in securing another home swap that allowed us to vacation abroad economically, this time spending 3 weeks in the spring in Belgium, including a 9 day home swap in Antwerp. We did so much on this trip that it took me the rest of the year to blog about it. We also took some shorter trips to New York City, Ottawa, Stratford and Cleveland that I have not written about yet, but pledge to complete before starting our 2018 vacations. In addition to the interest courses that we take at Innis College as part of the Later Life Learning group, we have also discovered some excellent courses at Hot Docs including ones on Film Noir, Art Deco and the History of Design Styles. Rich has picked up a few new hobbies including meeting with a group who share his interest in vintage watches. In order to keep our minds sharp, we have taken to completing one or more crossword puzzles each day, taken from the free Metro paper, the Globe and Mail or the New York Times newspapers. We look forward to continue pursuing our many interests through 2018, and maybe we can even check off a few more new items from our original list.
2016 Year End Review
2015 Year End Review
2014 Year End Review
2013 Year End Review
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