Dr. Garth

Nurse Jiggles in her elf suit is something to behold. No wonder the waiting room is jolly. Even a tad steamy. The pink latex really makes a statement.

Well, this is appropriate. Our first patient is a doc.

“I’m a longtime reader of your blog (I’ve written in before) and I owe much of my investment strategy to your thoughts on asset mix and the like,” says Derek, ignoring the chaos. “Now more than ever I also appreciate your political insights.

“That thought aside I have a question for your consideration. I’m a doctor in Ontario. The OMA has just announced that they have negotiated an option for incorporated physicians to join HOOPP, a large defined benefit pension plan. To me, this seems like a great idea: it addresses longevity risk, and I don’t have to hope that interest rates favour buying a deferred annuity when I turn 65. However you seem to always urge readers to divest from their pensions and take a lump sum buyout. What gives? If I join the plan, will I be hooped?”

This is indeed an interesting development, since a ton of medical professionals have made serious mistakes when it comes to retirement planning. Gone are the days when incorporated docs could squirrel away money in a corp, share proceeds with family members, pay minimal tax and sip on lightly-taxed investment income when retired.

Now only a spouse (not a kid)  can be paid, and only if he/she is a verified employee. Investment income within a corporation is seriously taxed. Doctors taking income as dividends end up paying the same rate as salary (when personal and corp taxes are added) and yet earn no RRSP room. Governments have decided those with medical professional corporations should, on balance, be fleeced the same as high-earning taxpayers who collect only salary.

The result has been, in many cases, doctors retiring without corporate pensions, lacking registered retirement savings and with a pile of money fully exposed to the top marginal rate. Being part of a DB pension plan could be a welcome, stress-free alterative – something that’s been available only to docs who were employees, not indies. And HOOP is a good outfit.

When retirement comes, Derek, you can stay in the plan and collect the monthly benefit, fully taxed. Or you might be able to opt out, invest the wad thereby reducing the tax while adding risk. In any case, joining is a worthy option, Abd, no, never buy an annuity.

Okay, now here’s Ted, a 67-year-old boy toy with a mortgage and relationship dilemma.

“My 5 yr variable mortgage times out later this month and has $195K left on it,” he says. “How should I renew? I have a LOC with $50K on it and both related to cost of building a house decade ago – NOT lifestyle costs.”

Sheesh, Ted. Not judging. But tell us about the romance thing.

“I might sell the house in a bit and relocate to BC because of the new love in my life (seniors dating isn’t for sissies), plus I want to reduce costs as retirement looms. I have $550K in RRSP, $32K in TFSA and $28K in margin. I collect CPP, no pension. I’m still working but about to leave bunnypatch for a winter of snowboarding & spooning in BC.”

On the mortgage, if there’s a hefty chance you’ll be selling and getting sexed up in the near future, don’t lock into a long, fixed rate loan than could be more costly to exit. VRMs (variable rate) are usually easier to leave, with the standard penalty being three months of interest. The LOC likely has a ridiculously-high rate and can be paid off at any time without cost (so do it).

Does she have a house in BC? Hope so. You’ll need the proceeds from yours, plus the half-mill in RRSP to finance the many years of spooning to come. BC is a costly gig. Marry her.

“You saved my finances a few years ago,” says Aman, as Jiggles elfs him into the clinic exam room. “Back then you talked about low interest rates and the coming inflation. So when VRM was juicier, I opted for fixed and locked at 1.79% for 5 years. I should how gone for 10 but alas.”

“I hope that you will discuss this on your blog. Are we at risk of interest rates going down and then inflation soaring. Probably, but then should folks lock up at high fixed rates? I am confused.”

Aren’t we all? Months ago it looked like rates would steadily tick lower in 2026, but now all has changed. Economies in Canada and the US are weaker. Employment levels are declining. AI is sucking off jobs. Trump is Trump. Tariffs are a threat and debt is romping.

Most economists see our central bank holding rates steady all year. A few are calling for an increase later in 2026. Inflation in Canada is under control, but risk is tilting towards prices that fall rather than increase. Real estate is a good example. Rents are another. Disinflation could be with us if America stumbles, jobs leave and our economy feels the impact. Overall, Aman, things are murky.

Just be happy you scored an historically-low rate for the past five years. Renew now at 4%, and be grateful. This is better than a pandemic.

About the picture: “We just returned from a 3 week Southeast Asia tour and came across these little treasures in a small village outside of Hanoi Vietnam.” write Sally and Dave, from Mill Bay. “Thought you may find use one day in your blog.  We have been avid reader since the beginning and read your blog daily while away.  Thanks for your continued common sense and sound advice.”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.