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Category Archive for: ‘Retirement Planning’

Retirement Income and Low Interest Rates

Pig And Percent

Low interest rates are hurting retirees trying to generate sufficient income from their savings to cover their living expenses. But a recent study revealed another concern for those who are currently working and still a decade or more away from retirement. Obviously, for retirees who are depending a large part on their investment income, low rates have an immediate impact …

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Tips and Traps About Income-Splitting for Seniors

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Retirees can split income between the higher and lower income earning spouses. Some income splitting can be done on the individual’s tax return but to take the best advantage of it, some advanced planning is needed. Not all types of income can be split so it’s good to know about some tips and traps about income-splitting for seniors. A basic …

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Beware the Retirement Risk Zone!

retirement risk zone

The biggest fear for many Canadians in or near retirement is outliving their savings. This is followed by the fear of their purchasing power being eroded by inflation, and prolonged illness or disability. All are complex issues that makes investment decisions frustratingly difficult for anyone envisioning retirement. Having to make these decisions with limited time on their side sums up …

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When To Apply for CPP?

Digital Retirement Plan

I’m often asked when to apply for CPP as there is a lot of confusion as to the best time.  If you’ve contributed to CPP you should expect to receive the benefits.  But as CPP benefits have financial-planning implications, even wealthy individuals who have contributed to the program throughout their working lives need to understand what these are.  So one …

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The Math Behind A Successful Retirement

Whats Your Plan

One of the perks of holding various industry-related memberships is the luxury of gaining access to proprietary interviews with influencers.  A recent interview with one such industry expert emphasized some sobering points about the math behind a successful retirement, and prompted some spontaneous research into the viability of guaranteed retirement income, otherwise known as an annuity. Spoiler Alert There’s a …

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Baby Boomers See Half A Million Retirement Shortfall

Maze1

Canada’s baby boomers are starting to realize they don’t have enough saved for retirement  to maintain a comfortable lifestyle. A recent study that found that the average baby boomer anticipates the need for at least $658,000 to feel financially secure.  Unfortunately, the average savings of a pre-retiree is typically $228,000.  That’s a BIG shortfall! Almost 50% percent of boomers today …

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Boomer’s #1 Concern Facing Retirement

Save

  We’re living longer than ever, and the prospect of decades spent in old age is keeping some baby boomers up at night, prompting those approaching retirement to rank health concerns over finances.  Thus, Boomer’s #1 concern facing retirement. According to a recent poll, 70 percent of Canadians aged 50 to 59 considered declining health as the top concern for …

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Saving and Planning for Retirement

Retirement Plan

When working with clients, we’ve found that families paying off school debts etc. are very real reasons Canadians have difficulty saving and planning for retirement.  A recent survey found that nearly 80% of households admitted not saving enough to fund their retirement. While financial advisors can offer solutions to help people prepare for the retirement they want, they can’t force …

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How Much Money You Will Need To Retire

Lady With Pig

The 2013 Summer edition of MoneySense magazine offers a chart on how much money you will need to retire. Naturally, this information differs according to perspectives and goals but at the end of the day, these kind of charts are a good benchmark for planning a comfortable retirement. We decided to replicate the MoneySense data to illustrate the needs associated …

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Turn Your Retirement Dreams into Reality!

Couple On Beach1

Don’t simply retire from something; have something to retire to. That’s a profound statement by Harry Emerson Fosdick, who was regarded by Martin Luther King Jr as the greatest preacher of the last century.   With so many boomers retired or nearing retirement, his statement is especially relevant today. Having a successful retirement is much more than having enough money.  It’s …

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Income Opportunities For Seniors

Hand In Hand1

  (This article was originally published in the Stettler Weekender, January 2012) With savings accounts and GIC rates near historic lows, it’s no wonder seniors who have GICs maturing are in a quandary now as to how to create adequate retirement income. Considering that both the US Federal Reserve and the Bank of Canada’s most recent postings indicated that there …

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Are You Living on Income or Cash Flow?

Retirement This Way

  Ask any retiree what they want from their investments, and they’re likely to give the same answer; income.  That makes sense if you’re relying on your portfolio to meet monthly expenses, but in most cases, what retirees really want is cash flow.  I’m not trying to split hairs here, but if investors don’t understand the difference between income and …

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Filling the Retirement Income Gap

Success

Most people would prefer to retire sooner than later, but uncertainties have made ‘later’ more of a reality today than with previous generations.  The number of people who expect to be still working full time at age 66 is now equal to those who expect to retire at that age.  The primary reason is to maintain their standard of living.  …

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Is Retirement Planning a Waste of Time?

Financial Plan1

Peter Drake, the vice-president of retirement & economic research for Fidelity Investments has found that only a fraction of people planning for or living in retirement have written retirement income plans.  The reason he gives is that proper retirement planning is an arduous and time-consuming process. He also gave a couple of other reasons worth mentioning. One is that this …

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The Cost of Retirement

Next Exit

  Financial Advisor magazine has a helpful look at planning for the cost of retirement, acknowledging the many moving parts to consider. Making educated assumptions is an important part of retirement planning and probably isn’t the best way to apply “SWAG budgeting*” (Sophisticated Wild-A$$ Guessing) principles. Planning for the future demands an in-depth reality check in these areas: Naturally, these …

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RRSPs Aren’t For Everyone

RRSPs aren't for everyone

As a follow-up to our previous post about Preet Banjeree asking whether seniors were better off investing in RRSPs or TFSAs, Senior Finance Editor, Ashleigh Patterson from Money Minute, debunks 3 myths about RRSPs, suggesting that RRSPs aren’t for everyone (click on the image below to watch the video). The takeaway from this video can be summarized via the following: …

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Seniors May Be Better Off Investing in TFSAs Than RRSPs

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  Preet Banerjee, Host of Million Dollar Neighbourhood and Globe & Mail columnist, briefly explains in black and white why seniors may be better off investing in TFSAs than RRSPs.  

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RRSP Tip #3: Preparing For A Comfortable Retirement

Ideally, maximizing your savings pool is a lifelong task, despite the fact that many Canadians are financially short-sighted. Statistics Canada reported in 2005 that $27.6B (yes, Billion) was invested in RRSPs, representing only 9% of the available contribution room.  Surveys from the TD, BMO, and RBC banks confirm that young people and retirees have regrets about preparing for a comfortable …

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RRSP Tip #2: Spousal RRSPs

Spousal RRSPs are a good opportunity to take advantage of Canada’s graduated income tax system for equalizing retirement income between two people who strategize to retire in a lower tax bracket, thus minimizing their future tax burden. It’s one of the few ways to hedge against future changes in pension-splitting rules and for circumventing other rules in play that prevent …

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RRSP Tip #1: RRSP Contributions

rrsp contributions

This post isn’t as much a “tip” as a brief primer on earned income. RRSP contributions are based in part on earned income so it’s important to know which revenue types qualify (especially as it relates to your earned income in the previous year). Here’s the rundown of what constitutes “earned income”: According to CRA, the following investment income also …

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