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Email this9:15 pm
November 4, 2014
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My spouse and I are shopping around for the best GIC rates for coming due TFSA's, RRSP's. We put them for 18 month terms thinking rates would be higher by now but it seems that it was the wrong move.
It is a significant amount, $63,000 TFSA's and $275,000 RRSP's. Tomorrow they come due and basically we shopped around and 3.05% from Oaken Financial will be getting $63,000 in TFSA's and $85,000 in RRSP's, $85,000 in RRSP's for Comtech Credit Union.
The remaining $105,000 in RRSP's will be split equally, $52,500 for ICICI Bank of Canada, State Bank of India Canada which are paying a little less at 3.00%.
It is a hassle to transfer all this money between financial institutions to stay within CDIC, DICO limits but it is worth in in the long run having adequate protection.
9:27 pm
November 4, 2014
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We sold about 7 months ago a rental property which netted $125,000 and are going to have to invest that too because it is a term deposits earning only 1.65%, 1.85%.
Our adviser is trying to show us how to put 50% in dividend paying ETF's that are around 3.9% dividend yields right now and 50% in 2 bond ETF's that are currently paying out 3.70%.
We are not sure and it just seems that if we can get 3.00% or 3.05%, is it really worth it to get another potentially $16,000 to $18,000 in extra money in 5 years with more risk.
This is what our adviser is telling us 5.50%+ returns over the next 5 years are easily achievable with dividends, interest and capital gains.
9:53 pm
November 4, 2014
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We are not really wanting to do this as I am now 55 and on C.P.P. disability getting $1,212 a month for the last 6 months. This will pay until I am 65 years old. I worked for this one company for 29 years and got injured and can't work now.
My father got injured as well in his early 60's and regretted not saving more so he told me when we got married to make it a priority.
I also will get a disability benefit through work but it is a 3 year payment plan and that is it. This pays on November-30 of each year. It is through Manulife Insurance.
It is $15,000 in year 1, $16,000 in year 2 and $17,000 in year 3. My spouse was laid off in 2008 and got a severance package of $65,000 after working 24 years there.
This was put in her RRSP as she had enough contribution room and is now worth $80,000. It is in 5 year GIC's at 2.85%, 2.92%, 3.00% just put in 2013.
She is now 61 and is retiring at the end of 2014 and will be getting her C.P.P.of $725.33 per month. She worked 33 years. Her employer was a private company and paid out her pension in a lump sum of $120,000 in 2009 as they closed down the pension plan.
It is in a LIRA worth now $149,000 in a monthly income fund. We want to turn it into a secure monthly long term income stream so he showed us some 30 year annuities which are currently paying $699 to $727 a month.
We just paid off our mortgage in 2010 which is good thing and we have no debts, good thing too.
10:37 pm
November 4, 2014
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I forgot to mention that we both have a small life insurance policy of $50,000 each through BMO which expires in 20 years. We just got this in 2014 a few months ago.
We also have $10,000 in an Oaken Financial savings account and $10,000 in a 1 year, 90 days cashable GIC.
12:18 am
October 21, 2013
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Greg, are you looking for second opinions or advice? or something else? or are you just sort of introducing yourself? (not clear to me)
12:39 am
November 4, 2014
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Loonie, I am open to suggestions but we are leaning towards taking it conservative with fixed interest rates and long term fixed income paid monthly.
We did not get impacted by the market downturn in 2008-2009 and so we just want to sleep at night in whatever type of retirement we are in but obviously not by our choice, disability and job losses.
1:23 am
November 4, 2014
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Loonie, just a little more background on our finances. We currently need about $1,750 a month for all our expenses, property taxes, gasoline, car and home insurance, car maintenance and repairs, food, clothing, electricity, heating, water bills, monthly life insurance premiums, entertainment, misc. etc.
This does not include home repairs and maintenance over the years which will come from other resources and cashflow. This does not include annual income taxes either.
We are in a low tax rate once figuring personal amounts of $23,200 of include not applicable to income taxes and our RRSP's, TFSA's are tax free and tax sheltered. I would say $3,500 a year will be our income tax bill on our C.P.P, pensions and fixed annuity income, non-registered interest income.
The first 3 years of my $48,000 private insurance disability income will cost total income taxes of anywhere from $8,000 to $12,000 over the next 3 years depending if I put more money into annual allowed RRSP contributions or not.
According to our calculations with all the financial details I stated above, our C.P.P pensions are $1,937 a month so this covers our total monthly expenses.
Our investments RRSP's, TFSA's are not per say bringing in income annually but over 5 years, this is another $86,556 in total compound interest accumulated or $17,311 interest per year.
As for the LIRA, this will bring about another $727 a month in fixed annuity income for the next 30 years for us and paid to any beneficiaries if there is any remaining balance in a one time payment.
We were thinking about leaving it in for maybe another 3, 4 or 5 years to let it grow more but we are leaning toward taking the monthly check.
We will have a monthly surplus more then likely so we could always put that in our TFSA's in some more 3.00 to 3.05% GIC's so we can protect against income taxes.
I am going to receive $48,000 over 3 years for my disability so this will act as a good income boost filling the gap until my spouse gets her additional $600 a month in OAS.
1:38 am
November 4, 2014
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More important details about my C.P.P. disability which is currently $1,212 a month. In 10 years when I will get my retirement C.P.P. and OAS, I will be getting more combined than the $1,212 per month.
A good estimate with C.P.I annual increases and what my eligible amounts are, it is about $1,800 a month, $1,114 C.P.P, $686 OAS. This extra $588 a month will help with the higher cost of living a decade from now.
Also, hopefully we don't need to touch our RRSP's, TFSA's, non-registered investments and at 3.00% GIC rates, it will grow by another $100,000 from when I am 60 to 65 years old plus giving us another $5,600 a year in annual interest income by the time I am 65 and my spouse is 71 years old.
5:52 am
October 21, 2013
Online
I see.
There is a lot of detail here, and it is hard to absorb it all in paragraph format.
However...
It sounds like you believe you will have enough money for your retirement without taking risks beyond GICs. Certainly all the advice I have ever read that is reliable suggests that one should not take any more risk than necessary.
On the other hand, there are a few things that you might want to consider.
1. EVERYTHING involves risk. You need to take seriously the risks associated with being invested solely in GICs. The primary risks would be (a) inflation; (b) Canadian currency devaluation relative to costs, which is sort of a bigger version of inflation, possibly brought on by global financial melt-down etc. It is difficult to plan for such eventualities, but they are there. Some think that diversification along global lines is the answer, e.g. through equities which are either denominated in currencies such as US$ or which get their income from other parts of the world. I think this is probably true in principle, but I too find it difficult to take on the risks posed by these alternatives.
2. I think you should consider laddering your GICs. You said you regretted your previous decision to go for 18 month GICs, because rates did not go up as expected at end of term. Similarly, if you lock everything into 5yrs now, rates might go up in the interim and you may regret your lack of flexibility at that time. I suggest you line up all your GICs in a list, with their terms and due dates, and see how they pan out, then adjust them as you reinvest. According to the laddering principles, the goal is to have everything in longer-term investments, but to have them staggered so that, if you have them up to 5 years, then 20% comes due every year and can then be rolled over for another 5 years. This way, you normally get the best rates, averaged out. It sort of buffers any drastic changes. In order to get started with this, you will probably need to accept some shorter terms for the first few years, but most of that will coincide with your higher income from disability insurance, so the timing is lucky.
3. I don't know if you have children or other beneficiaries for whom it is really important for you to leave something. This might affect the annuity that you are thinking of getting. However, odds are that, even without the annuity, there will be something left for beneficiaries. I think you should use the annuity to protect yourselves. I also think you're a bit young to be buying an annuity. The best advice I have read suggests getting it later. Gordon Pape, for instance, suggests getting it at age 75-80, although of course this only works if you live that long! - but the reason for this suggestion is to minimize the tax impact of the high mandatory withdrawals from RIFs that come into play the older you get. The tax due on an annuity which comes from non-registered funds is generally very low. If you can manage for a while longer without an annuity, it might be to your advantage. If it were me, I would get a life annuity that covered both partners, which lasts until the last one dies, but you will obviously get a better return the longer you wait. It seems to me that what you don't want is to discover that you outlived your annuity, because an income cut at that stage could really hurt.
4. I think the ETF strategy being recommended to you is only advisable for the portion of your money that you don't expect to actually need for another 20 years or so. If you can figure out what that is, it may make sense. If markets tank in the short term, which they could certainly do, it will take you ages to get it back up to a decent level. Even dividend-producers can pull back on dividends, as happened in the last downturn with a number of companies including blue chips. If your advisor thinks his strategy is going to give such great returns, ask him to put it in writing as a promise. Of course he won't do that because it is by no means guaranteed, but talk is cheap. Many commentators, including one in particular that I listen to, because I had occasion to meet him once in a non-investment context and was very impressed with his ability to think clearly and deeply, think that the markets are too high right now and that we are in for a correction, but you can always find a variety of opinions! Some think our entire monetary system is going to collapse, in which case investing in money will not seem to have been a very good idea.
5. Don't forget to keep a healthy chunk of money in cash. You never know what might come up. I have read suggestions of 100,000. You can keep it in a savings account at Achieva CU (2%) or the cashable 1yr GIC at Oaken (2%, cashable after 90 days) or the 1yr at Hubert which pays 2.35 overall but you should only cash it at 3 month intervals. You could divide your cash amongst these as you see fit in order to maintain liquidity. Achieva and Hubert are covered by Manitoba Deposit Insurance Corp, which is parallel to DICO.
The literature on how to actually get an income stream going from your retirement funds is not as strong as one might think. So far, in my reading, I have found the following books helpful, which you can probably get from your public library:
Master your retirement: how to fulfill your dreams with peace of mind. 2nd ed. by Nelson, Doug, 1967-. Winnipeg: Knowledge Bureau, 2011.
New rules of retirement: what your financial advisor isn't telling you. by MacKenzie, Warren, 1946-, and Hawkins, Ken. Toronto: Collins, 2008.
Your retirement income blueprint: a six-step plan to design and build a secure retirement. by Diamond, Daryl, 1953-. Mississauga: Wiley, 2011.
Pensionize your nest egg: how to use product allocation to create a guaranteed income for life. by Milevsky, Moshe Arye, 1967-; and Macqueen, Alexandra Carol, 1967-. Toronto: Wiley, 2010.
The Real Retirement: Why You Could Be Better Off Than You Think, and How to Make That Happen. By Fred Vettese and Bill Morneau. John Wiley & Sons, 2012.
I have read all of these except Milevsky's, and would recommend each of them for different reasons. If you are only going to read one, I would start with the one by Diamond. Also, take a look at http://www.moneysense.ca/retir.....-your-rrsp
These are difficult decisions, with huge consequences. Take your time.
9:59 am
November 4, 2014
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Loonie, thank you for some of your suggestions but we have been laddering GIC's in 1 year, 18 months and 2 year terms since 2002 and GIC rates were at 4.50%, 5.00%, 5.25% but they keep dropping. Loonie, I am no expert but all world economies are slowing down and even if GIC rates go up to say 3.50%, 4.00%, this would probably take 2.5 to 3.5 years and our GIC's are almost matured so there would not be much of a benefit.
We had full time good paying jobs paying $23 and $27 an hour but now that my spouse is older at 61 and I am disabled and can't work, we can't take anymore risks with low interest rates and her LIRA with her monthly income fund which is not CDIC, DICO insured.
We have $20,000 in savings accounts, casahble GIC's and another $40,000 after taxes that will come from my Manulife disability payments which will be paid in November 2014, 2015, 2016. This is our short term money.
The financial details I stated above are simple to implement and we will know what we will be getting over the next 5 years and maybe longer. We are simple people and we can't lose our principal.
We sold our rental property because it was alot of headaches and we were not making that great of a return, about net 2.4% a year and prices will go up but so will property taxes, utilities, repairs and maintenance costs, insurance, H.S.T., closing costs when sold down the road etc. It was not worth it anymore and sold it.
When you start to get older and don't have a steady paycheck, principal protection and income protection is very important. Inflation is not going to be a major concern for us because we currently need a modest $21,000 a year.
We are thinking of getting rid of one of our older cars soon and this will save us about $260 a month in car insurance, repairs, maintenance, registration fees etc. This will almost pay our annual income tax bill.
The more stuff you own, the more inflation will impact us and everyone else. In about 4 years, we will have $65,000 in annual income from all sources and $60,000 in cash reserves, cashable GIC's.
All our income needs to pay all our expenses, taxes etc. will be about $20,000 in 4 years. Our income will be 3.25 times our annual income needs and C.P.P., OAS pensions, are at least C.P.I. inflation indexed annually.
Our adviser tells us that we should have at the minimum 2 times of annual income versus our annual income needs to pay expenses, taxes etc.
Also, we should have at least 1 year of income needs or spending in a safe, boring cash reserve like savings accounts, cashable GIC's, term deposits etc.
We will have in the next 3 weeks $32,000 in safe bank, credit union, fairly liquid cash reserves, savings etc. which is about 21 months or 1.75 years of spending, income needs. This will build up gradually to $40,000 by the end of August-2014. This will mean almost 27 months of income needs set aside.
As I stated above, we have no debts so this is helping us alot with our cashflow every month.
11:16 am
September 5, 2013
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Greg Franklin said
My spouse and I are shopping around for the best GIC rates for coming due TFSA's, RRSP's. We put them for 18 month terms thinking rates would be higher by now but it seems that it was the wrong move.
It is a significant amount, $63,000 TFSA's and $275,000 RRSP's. Tomorrow they come due and basically we shopped around and 3.05% from Oaken Financial will be getting $63,000 in TFSA's and $85,000 in RRSP's, $85,000 in RRSP's for Comtech Credit Union.
The remaining $105,000 in RRSP's will be split equally, $52,500 for ICICI Bank of Canada, State Bank of India Canada which are paying a little less at 3.00%.
It is a hassle to transfer all this money between financial institutions to stay within CDIC, DICO limits but it is worth in in the long run having adequate protection.
Just want to let you know I put some money into COMTECH Credit Union a few days ago. Although their 5 years GIC is advertised as 3.05%, but it is compounded semi-annually. They provided me a very good service in person, and after two days account opening, I received some thank-you gift (two tiny jams) from courier
I loved it.
Check up here http://www.comtechcu.com/
11:28 am
November 4, 2014
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BrimelyChen, so their interest rate is compounded semi-annually. This is good to know. We have an appointment this afternoon at 1:45 P.M so we will ask them about this.
The difference is $111.51 more interest over 5 years. It is not a huge amount but every little bit helps. It is something extra that we did not expect to get. A little bonus for sure.
The thank you-gift sounds good too. I am glad you had a great experience and customer service and we are looking forward to our appointment this afternoon.
We might even consider putting some other money with them since it just makes more sense after this new info from you BrimelyChen. Thanks for sharing.
11:33 am
September 5, 2013
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Greg Franklin said
We sold about 7 months ago a rental property which netted $125,000 and are going to have to invest that too because it is a term deposits earning only 1.65%, 1.85%.
Our adviser is trying to show us how to put 50% in dividend paying ETF's that are around 3.9% dividend yields right now and 50% in 2 bond ETF's that are currently paying out 3.70%.
We are not sure and it just seems that if we can get 3.00% or 3.05%, is it really worth it to get another potentially $16,000 to $18,000 in extra money in 5 years with more risk.
This is what our adviser is telling us 5.50%+ returns over the next 5 years are easily achievable with dividends, interest and capital gains.
I kept asking the question like yours many years ago. Nobody can predict the interest rate. But if you don't need the money in 5 years, then it is always better to maximize the interest return from day one (3.05% vs 2.5%).
The trick is for the fixed income owner, stable return is the upmost important than taking the risk. Two thing impact your return: time and rate => compound return.
If you choose 2.5 instead of 3.05, then you lose the rate return from day one. As the time goes, the impact will be significant. (Of course someone will say the interest rate will be higher in next two years, but I am not sure. We only make the decision based on existing conditions. Nobody knows how the future is.)
My advice to 20 years old son when he save money in TFSA is to go for max duration for calculated risks. He bought 8% yield with 40 years BCE stripe bonds.
For you and me, we cannot get this because we cannot have another 40 years to wait.
The lesson I learned is NEVER TIME THE MARKET.
The rule is easy. SAVE and COMPOUND in highest rate at the time.
11:57 am
November 4, 2014
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Brimelychen, wise words indeed. Your son is getting 8.00%, 40 year compound interest on strip bonds also knows by us from our adviser, zero coupon bonds. This would have to be at least 11 to 12 years ago when bond rates were much higher.
Our adviser was showing us some zero coupon bonds from provincial and Canada in 2000 and 2001 that were 17 years to 23 year terms in the 6.16% to 6.56%. We could of invested $35,000 in RRSP's at that time and it would of made sense as we were in our 40's.
They would of matured when were in our 60's just in time for regular retirement age and be worth $140,000 to $150,000. We stayed with GIC's and highly regret it now.
We remember back then 5 year GIC's were paying 6.25% to 6.60% so it did not look like it made sense.
We only have a son who was 26 years old at the time and in 2009 and he started saving every month into his RRSP and TFSA. He managed to save $11,200. Our same adviser which is his adviser told him to buy 2 provincial zero coupon bonds at 5.15% maturing maturing in December-1-2039.
It is a good thing my son bought them because they will be worth $50,000 at maturity. Brimelychen, those same 2 zero coupon bonds although now 25 year maturities instead of almost 30 years are paying much less at a 3.721% net rate. A big difference now.
12:12 pm
September 5, 2013
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Well said. 6% rate is in the distant past.
The problem is our central banks robbing our savers to subsidize the corporates. In fact, the govt is the biggest debtor now. They don't have any way out, except to depress the interest rate, and debase our purchasing power.
The central bank governor even suggested our children to work as unpaid interns (Slave?)
1:38 pm
October 21, 2013
Online
I don't think I was able to clearly explain laddering and its advantages.
It's not just about the rates you will get over the next 5 years.
It is about arranging your GICs so that they will all be invested in 5 year terms, and 20% of them will come due every year. This sets you up in the best possible way for the rest of your life. It gives you the best protection in terms of changes of interest rates in the future, which, as we all know, are unpredictable. It averages out your rates. Historically, 5yr rates have been the best rates 92% of the time, according to a study done by Manulife (Seven strategies to guarantee your investments: the Federation of Canadian Independent Deposit Brokers guide for the conservative investor. by Yih, Jim. Edmonton: FundFilter F.I.R.M., 2004, pages 68 and following).
If, on the other hand, you are making most of your investments right now, they are all going to come due at about the same time, 5 years from now, and you will be at the mercy of whatever is happening with interest rates at that time. For all we know, they could be taking a dip at that time, or might be spiking, but it is a risk. You are better off to re-invest 20% of your money annually.
I think that over the longer term this would be your best strategy, and it is the one advocated by every authority that I have consulted. Perhaps you should ask your advisor's opinion.
You have already experienced the downside of failure to average out your fixed income investments - twice - once with the 18 month investments, and earlier when you failed to invest in long strip bonds. While very long bonds no longer make sense for you at this stage of life, the concept of laddering your investments remains sound for you. I really think you should learn more about this strategy before you make your final decisions. There are lots of sources on this. I can recommend In your best interest: the ultimate guide to the Canadian bond market. 3rd. ed. by Cunningham, W. H. Toronto: Dundurn Press, 2012, which should be available in your library and has the advantage of being a Canadian book so that you know everything will apply. You can ignore what he says about corporate bonds, but please pay attention to the sections about laddering.
There is no one way to invest your money that is completely risk free. None at all. The goal is to minimize the risks. You have decided to invest solely in GICs, so you need to average out the risk within that category. If you don't believe me, ask your advisor and do some more reading.
9:04 pm
November 4, 2014
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Loonie, we have been laddering GIC's over since 1996 with this same adviser and rates have gone from 8.25% to now 3.05% at best. I am taking about GIC's and savings bonds. It has been almost 20 years of less interest earning years for savers and government bond investors
I agree with Brimelychen that interest rates for savers, bond investors will be low for many years because of many factors such as too much debt in world and borrowers of all types way out number more than usual savers, bond investors that need income.
There are more experts than ever before but I have not seen one truthfully tell that interest rates would fall and will stay low.
My spouse and I can't afford to have our money be earning 1.50% to 2.00% in savings losing at least $200 a week for years to come. We need principal protection and income protection. This is our goals and we wish we did this years ago.
9:10 pm
November 4, 2014
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Brimleychen, that was a ridiculous comment about people should work for free. Maybe he is hinting that he wants to drop interest rates to almost 0% and give cheap, 2.00% mortgages which after inflation and taxes is free money for lenders.
11:14 pm
November 4, 2014
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Since I can't correct my prior second post above at 9:04 P.M, November-6-2014 because there is no edit button displayed, I meant to say I am talking about GIC's and savings bonds. This is in context of the steep, relentless falling rates from 8.25% to 3.05% at best. Sorry for any misunderstanding.
11:49 pm
October 21, 2013
Online
I think you have already made up your mind, but I am puzzled by your situation and trying to figure out best course of action anyway.
As I understand it, this is more or less your situation:
Cash: $20,000 at Oaken.
Available for re-investment:
$63,000 – TFSA husband and wife
$275,000 – RRSPs, husband and wife?
$125,000 – husband and wife, from sale of property, currently in low-interest term deposits, maturity dates not stated, non-registered.
$149,000 – wife's LIRA (for annuity? = ~$727/mo. = ~$8,700/yr.) currently in income mutual fund, taxable
Income for the next 4 year period:
CPP Disability $1212/mo = $14,500yr. x 10 yrs. (adjusted for inflation?)
CPP wife = $722/mo. = $8,700/yr, adjusted annually for inflation
Annuity or income from $149,000 = ~$8,600/yr., unclear if inflation clause included.
$15,000 – 2014 (disability pension) taxable
$16,000 – 2015 (disability pension) taxable
$17,000 – 2016 (disability pension) taxable
2017 and following – disability pension will be replaced by wife’s OAS, currently about $6,500/yr, indexed quarterly to inflation.
Total 2014 = $46,800. Total 2017 = $38,300.
Already invested:
$80,0000 wife's RRSP in 5yr GICs, matures in 2018, @ 2.85%, 2.92%, and 3.00%, institutions not named.
Expenses:
$1750/mo. = $21,000/yr.
Income tax = $3,500/yr., to be paid by saving of reducing to one car.
Capital expenses for house etc., amount not stated.
You stated that you are not concerned about inflation because your expenses are so low and your income is going to be significantly higher. So I am not clear why you think that laddering would put you at a disadvantage.
You state that you don't want to be earning only 1.5 to 2.0% "for years to come", but nobody has suggested that.
Your existing ladder consists of
$80,000 in 5yr GICS maturing in 2018; and
$463,000, which you plan to invest in 5yr GICs maturing in 2019.
You do not seem to have any other significant investments which will be available for reinvestment in 2015, 2016, or 2017. If you had these 3 maturities covered, you would have a complete ladder.
I suggest you complete your ladder by putting approximately $90,000 into 1, 2, and 3 year GICs. The exact amount will depend on CDIC/DICO etc limits and the term of your investment. When they mature, roll them ALL over into 5 year GICs at best-available rates, and continue doing this indefinitely unless changes in the economy suggest another course of action. I agree that rates will likely remain depressed for a long time, but there will still be ups and downs. If you have approximately 20% of your money maturing annually, you can average out this risk, making for a more stable income. If rates in 2019 are lower than they were in all the years preceding, then you will be wishing you had laddered your investments - and I am genuinely concerned that this could happen.
You could still put the remainder of your money into 5 year GICs at approx. 3%, maturing in 2019. This would give you a total of about $193,000 invested in 5 year GICs maturing in 2018 and 2019 at rates around 3%.
I suggest the following, all of which are well above the 1.5 to 2.0 range which concerns you. This assumes your existing GICs maturing in 2018 are not in the same institutions, but you didn't tell us where they were.
1 year - Peoples Trust at 2.4% RRSP or TFSA. CDIC-insured.
2 year - Oaken at 2.6% RRSP or TFSA. CDIC-insured. (available to Dec 19).
3 year - Oaken at 2.65% RRSP or TFSA. CDIC-insured. (available to Dec 19).
You might also consider putting all of your TFSA money into daily savings at Peoples, which has held consistently at 3.0% since they first started offering them several years ago. This would be in place of part of the 1-year GIC.
What this would look like is:
$90,000 - Peoples Trust at 2.4% for 1 year (or TFSA portion in savings at 3%), then reinvest in 2015 for 5 years at best available rate.
$90,000 - Oaken at 2.6% for 2 years, then reinvest in 2016 for 5 years at best available 5yr rate.
$90,000 - Oaken at 2.65% for 3 years, then reinvest in 2017 for 5 years at best available 5yr rate.
$80,0000 RRSP in 5yr GICs, institution not named, matures in 2018, @ 2.85%, 2.92%, and 3.00%, reinvest in 2018 at best available 5yr rate.
$113,000 - ComTech, at 3.05% for 5 yrs (divided between the 2 of you), then reinvest in 2019, at best available 5yr rate.
I doubt you will do as I have suggested, as you don't seem to like the laddering idea, but I have not run into any credible advisor who does not think it's a good idea for GICs. Assuming a 5 year rate of 3%, available now, you would lose up to $2280 over the 3 years, depending on whether the Peoples Trust TFSA is used. But you would not be exposed to the possibility that in 2019 and every 5 years thereafter you might face some of the lowest rates seen in 5 years. You would also protect yourself against reconsidering every 5 years what you are going to do, because it would be more automatic. This is an advantage as we get older and may be less capable of working it all out. Over the longer term, this is your safer bet, and there is some very long term research to prove in the books I have mentioned. It also gives you the opportunity to reconsider, annually, whether your strategy requires any changes, as you can at least access some of your money to redirect it if needed.
However, as I said, I don't think you will do this. It was an interesting challenge for me to work it all out, so I am pleased with that.
Please write your comments in the forum.