As we move into 2026, financial markets continue to navigate a period of transition rather than resolution. Inflation has moderated from prior peaks, interest rates appear closer to their long-term range, and economic growth remains uneven across regions and sectors. Against this backdrop, many investors are placing renewed value on capital preservation, income reliability, and risk management - areas where Segregated Funds and GICs play an important role.

Interest Rates & Fixed Income

After several years of rising rates, central banks have signalled a more cautious approach. While future rate changes remain data-dependent, current conditions have created opportunities for investors seeking predictable income and reduced volatility.

• GICs continue to offer competitive yields relative to historical norms, making them attractive for near-term income needs and capital preservation.

• Laddered GIC strategies can help manage reinvestment risk while maintaining liquidity over time.

• For many retirees, GICs remain a cornerstone for funding known expenses and reducing reliance on market timing.

Equity Markets & Volatility

Equity markets have shown resilience, but volatility remains elevated due to:

• Geopolitical uncertainty;

• Slower global growth expectations; and

• Shifts in corporate earnings and valuations

For investors who prefer exposure to market growth but wish to limit downside risk, Segregated Funds continue to offer a balanced solution.

The Role of Segregated Funds

Segregated funds are particularly well-suited to today’s environment because they combine investment participation with built-in risk controls:

• Principal protection guarantees at maturity and on death (subject to contract terms)

• Estate planning advantages, including named beneficiaries and potential probate bypass

• Professional portfolio management, often with defensive or income-focused mandates

• Optional features such as income guarantees or volatility-managed strategies, depending on the contract

In periods of uncertainty, these features can help investors remain invested through market cycles without being forced to sell assets at unfavourable times.

Planning Perspective

Current market conditions reinforce an important principle:

Investment success is less about predicting markets and more about aligning investments with your personal goals, time horizon, and tolerance for risk.

For many clients, this means:

• Using GICs for stability and short- to medium-term income needs

• Using segregated funds to maintain disciplined exposure to growth while managing downside risk

• Reviewing allocations periodically to ensure they continue to reflect changing needs, particularly in retirement

   

As always, market commentary should be considered in the context of your overall financial plan. Your MWFS Account Manager can help assess whether your current mix of Segregated Funds and GICs remains appropriate given today’s environment and your longer-term objectives.

The Canada Revenue Agency (CRA) EFILE service for the 2026 tax-filing season will open on February 23, 2026.

Between January and March, you will begin receiving your tax slips and supporting documents, which may include T3, T5, T4A, RRSP contribution receipts, and investment income summaries. These documents are issued by various financial institutions and plan providers, and they often arrive at different times throughout the early months of the year.

What this means for you:

• It  is normal to receive tax slips over several weeks

• Filing too early may result in missing information or later adjustments

• Waiting until all expected slips have been received can help ensure accuracy

We recommend keeping all tax documents together as they arrive and allowing sufficient time for a complete review before filing. If you have questions about your investment-related tax slips or require copies of documents issued through our office, please contact your MWFS Account Manager.

Q: My spouse and I are retired. We have no debt, our home is paid off, and our investments provide comfortable income. Is there anything else we should be considering as we age?

A: It sounds like you have done many things right. Diversified income sources, prudent investing, and life insurance planning are all important foundations.

One area that is often underestimated, however, is planning for the financial impact of later-life events, including both declining health and income taxes that may arise at death.

From a health perspective, extended care, whether in-home support or residential care, can be costly and may arise unexpectedly. While no one enjoys planning for these possibilities, being proactive can provide significant peace of mind. Practical steps may include:

• Maintaining a dedicated “health contingency” reserve

• Reviewing how accessible your assets are if funds are needed quickly

• Establishing credit options in advance, such as a line of credit or home equity line of credit

The best time to arrange these tools is before they are needed, as financial institutions are generally more receptive when health and finances are stable.

Another important and often overlooked consideration is income tax at death. Certain assets may trigger significant tax liabilities in the final tax return, including:

• Registered plans (RRSPs and RRIFs), which are generally fully taxable as income upon death unless transferred to a qualifying spouse or dependent

• Non-registered investments, where accrued capital gains may become taxable at death

• Cottages, rental properties, or investment real estate, which can create substantial capital gains if values have appreciated over time

Without proper planning, these taxes are typically due within months and may require the liquidation of investments or other assets at an inopportune time.

Advance planning strategies, such as beneficiary designations, asset location planning, staged withdrawals, or life insurance used for tax liquidity, can help reduce  the burden on surviving spouses and beneficiaries and preserve more of your estate.