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Stingy News: Retirement

The hardest problem in finance
06/11/17 Retirement
"Challenging as those may appear, none compare to what Nobel laureate William Sharpe, 82, calls 'decumulation,' or the use of savings in retirement. It is, he says, 'the nastiest, hardest problem in finance.'"

Safe vs. optimal
06/11/17 Retirement
"In one case in the article we identify a 7 percent withdrawal rate as 'optimal.' That is not a 'safe' withdrawal rate. With the market assumptions in the article, the 7 percent withdrawal rate has a 57 percent chance of failure over a thirty-year retirement. Though it is not safe, it does maximize the overall expected lifetime satisfaction for a fairly flexible retired couple who has a secured income base of $20,000 from Social Security."

Retirement without trepidation
05/28/17 Retirement
"The widespread contentment among Canada's seniors suggests that many of us are approaching retirement with needless trepidation" [$]

Hope triumphing over experience
05/07/17 Retirement
"The return forecasts of US public pension plans offer another example of hope triumphing over experience. The average pension plan expects to generate 7.6 percent per year, even though the average plan only realized a 5.7 percent return per year from 2001-2015. The low levels of returns over this period reduced the funding status for many plans from 99 percent in 2001 to 74 percent in 2015. However, the plans with the largest shortfalls still tend to have the highest expected future returns and the lowest willingness to reduce those expectations."

Work longer to retire earlier
04/16/17 Retirement
"In our experience, many continue to put up with the grind of Intel (or any other employer) simply because they are married to hitting a target portfolio number, when in reality they could step away from the routine, and take a pay cut no doubt, but still earn enough income that allows them financial freedom sooner than they may have envisioned - and this may have the dual benefit of allowing them to pursue an area of work they've been putting off for years but are passionate about getting involved in."

Get serious about retirement ages
03/19/17 Retirement
"The Liberal government has declined to listen to the advice of its own economic advisory council on retirement age. Perhaps the Liberals might be more willing to listen to one of its ideological soul mates, someone who shares its views on the use of deficits to boost economic growth. Someone like Christine Lagarde, the managing director of the IMF."

Rich or free
02/26/17 Retirement
"The best combination is to probably be rich and free. But even that lifestyle is not much better than that of a regular income earning person who is living a purposeful lifestyle. Appreciate what you have right now. Being rich is not an amazing panacea. Being free with the consistent ability to help other people is."

The retirement spending smile
02/05/17 Retirement
"The following exhibit provides Blanchett's spending smile for a retiree that begins retirement with expenditures of $100,000. On average, this household can expect to experience declining real expenditures through age eighty-four, when real spending reaches a trough of $74,146. This reflects a nearly 26% drop in real expenditures. After this point, average real expenditures increase, though they do not necessarily exceed their initial retirement levels until retirees reach their mid-nineties."

More wishful thinking than rule
01/22/17 Stingy Investing Retirement
"As a result, those who follow the 4% rule - or even a more conservative 3% rule - might be gambling with retirement ruin. At a minimum they should be prepared to tighten their belts should the markets turn against them."

The global 4 per cent
01/15/17 Retirement
"With a 50/50 asset allocation, the 4% rule did not survive in any country, though it came very close in the U.S. (3.94%) and Canada (3.96%). Even allowing for a 10% failure rate, 4% made the cut only in Canada, the U.S., New Zealand, and Denmark."

The pension warning bell
01/01/17 Retirement
"By the time Calpers gets that assumed rate of return down to 7 percent, as its CFO recommends, the fund may very well be thinking about lowering expectations even further."

Retirement - golf
12/17/16 Retirement
"In all my years of working with clients, I can only think of two people who wanted to retire in the traditional sense. Even then, both stayed deeply committed to doing volunteer work, more or less full time, throughout their retirement. So, I have worked with precisely zero individuals who went from full-time work to full-time leisure at 65."

Semi-retirement is more fun
10/29/16 Retirement
"I have described elsewhere that my vision of Semi-Retirement is to find a balance that's neither too busy and stressful nor too leisurely and boring: or as the subtitle of the book has it, Work while you play, Play while you work."

The trouble with 4 per cent
10/16/16 Stingy Investing Retirement
"while simple asset allocations proved to be strong relative performers, the study found the 4-per-cent rule wanting when tested in international markets. Even worse, it did not include the corrosive impact of taxes, fees and other frictions investors face." [$]

The looming pension crisis
10/16/16 Retirement
"Guaranteeing pension returns - either before or after retirement, or both - is clearly a popular policy for both savers and sponsors. But the details are daunting, and the risks only grow as the scope of guarantees expands and more people take up the plans, testing the generosity of sponsors - and the taxpayers who back them."

Retirement glidepath
10/02/16 Academia Retirement
"After considering declining-equity, rising-equity, and static glidepaths, the comprehensive international evidence from 19 countries and the world market over 110 years considered here ultimately suggests that both an all-equity portfolio and a 60-40 stock-bond allocation are simple and very effective strategies for retirees to implement."

Putting it all on red
09/18/16 Retirement
"Imagine two kinds of investment funds, both of which have the same aim: to provide pensions for their employees. You might think that they would invest in a similar way. But when it comes to American pension funds, you would be wrong. It turns out that public funds have a rather different, and more aggressive, approach to risk from private ones (and indeed from their counterparts in other countries)."

Plenty of stocks
09/11/16 Retirement
"The prudent course for any retiree is to plan on a longer-than-normal life. Retirees typically liquidate only a small portion of their assets every year. Accordingly, the mere act of retiring should not prompt any change in your exposure to the financial asset - common stock - that is almost certain to produce the highest returns over the long run."

Saving, investing and parting thoughts
09/04/16 Retirement
"Each crash was followed by a strong recovery and each recession by renewed economic growth. The lesson is that better things usually lie ahead."

CPP changes
08/28/16 Retirement
"the CPP enhancement seems to do so little to ensure that future generations have an appropriate level of retirement income"

Most retirement accounts never run dry
08/28/16 Retirement
"Consequently, while most retirees accumulate a portfolio with the plans to spend it in retirement, when faced with the ever-open-ended potential of living many more years they may feel compelled to keep extra assets available, and never actually deplete the retirement portfolio, even in their later years. This isn't a sign of inefficient portfolio spending or a consumption gap, but merely a prudent response to an uncertain future."

Re-evaluation of pension returns
08/28/16 Retirement
"In an April 2016 report, McKinsey & Co. forecast that under a slow growth scenario, U.S. stocks will return 4 percent over the next 20 years while government bonds won't make any money. Ten-year returns for Connecticut's teachers' and state employees' pensions is 5.25 percent and 5.14 percent, respectively, far short of the annual gains it currently expects."

The reality of retirement
08/21/16 Books Retirement
"Lyndsay Green, sociologist and author of 'Ready To Retire? What You and Your Spouse Need to Know About the Reality of Retirement,' spoke with men over the age of 60 and their spouses, to learn about the anxieties and unexpected pleasures of retirement. Green joins The Agenda in the Summer to explore the worry and anticipation many feel toward the end of their careers." [video]

New retiree withdrawal rate
08/14/16 Retirement
"Inglis' recommendation: Simply divide your age by 20 (for couples, use the younger spouse's age). So, for example, someone who is 70 could safely spend 3.5% (70 / 20 = 3.5) of their savings, while someone who is 80 could withdraw 4% (80 / 20 = 4) and someone 65 could withdraw 3.25%."

Am I saving enough for retirement?
07/31/16 Retirement
"For me, the bottom line is that even though I was aware - on an intellectual level - that returns over the past few years had been lower, I was unprepared for how much lower they appear to have been."

Should you work in retirement?
07/31/16 Retirement
"Even a low-paying gig can make a dramatic difference"

CPP Memo
06/25/16 Government Retirement
"It has come to our attention that you are not saving sufficiently for your retirement. This does not surprise us. We haven't saved sufficiently for our retirement either. Some of us have made enough money in the housing market to be relatively comfortable, and a good number of us have workplace pensions. Low-income Baby Boomers will be protected by Old Age Security, Guaranteed Income Supplement and the Canada Pension Plan. But middle-income Baby Boomers without workplace pensions - people making $60,000 or $80,000 a year - are facing a big drop of their standard of living upon retirement."

Life of Riley Index
06/25/16 Retirement
"The S&P 500 now yields about 2.09 percent, and the five-year Treasury note now yields about 1.16 percent. Together in a 50/50 portfolio, you get a yield of 1.63 percent. That's down from last years. 1.75 percent."

Inflation and the 4% rule
06/19/16 Stingy Investing Retirement
"Simply taking 4% out of a portfolio annually, and not adjusting for inflation, can boost a portfolio's longevity and the payments it produces during bull markets. But it comes with the risk that the payments will shrink during down periods."

John Oliver: retirement plans
06/19/16 Funds Fun Brokers Retirement
"Saving for retirement means navigating a potential minefield of high fees and bad advice." [video]

Fortunes you can't control
06/11/16 Retirement
"March 30, 2000 and September 30, 2007 would have been two of history's worst times to retire. Inflation would have beaten those who withdrew 4 percent per year from a balanced index fund. But there are silver linings. For starters, the race was pretty close. In both cases, the table still had plenty of money left."

Many unhappy returns
11/21/15 Retirement
"Elroy Dimson, a professor at both the Cambridge and London Business Schools, is the co-author of a study of investment returns, covering 23 countries and more than a century of data. He thinks the likely future long-term real return on a balanced portfolio of equities and bonds will be 2-2.5%. AQR, a fund-management group, has come up with a remarkably similar figure, 2.4%, by assuming annual growth in dividends and profits of 1.5% for a portfolio priced at current valuations and split 60-40 between equities and bonds. It applied the same formula to valuations over the past century, and found that the current projected return is lower than at any time in the past"

Retirement planning
11/08/15 Retirement
"The work I've done shows that with a zero capital-market return in real [inflation-adjusted] terms, you need to save close to 30% of your income."

The power of one
11/01/15 Retirement
"If you're single, you know that retirement planning is tougher for you than it is for couples. You have no one to rely on but yourself, and you can't share expenses or split income. As a result, you can't just take the cost of retirement for couples and divide it by two. Situations vary, but a single person will need to spend roughly 70% as much as a couple to enjoy an equivalent lifestyle in retirement."

TFSAs and OAS
09/20/15 Government Retirement
"One of the most intriguing facets of last week's leaders. debate was the determination with which all candidates steered clear of two issues that directly affect your personal bottom line. Anyone listening to the debate would have no clue that ordinary folks feel at all attached to their tax-free savings accounts (TFSAs) or Old Age Security (OAS)."

How has the 4% rule held up
08/16/15 Retirement
"The 4% rule has been much maligned lately, as recent market woes of the past 15 years - from the tech crash of 2000 to the global financial crisis of 2008 - have pressured both market returns and the portfolios of retirees. Yet a deeper look reveals that if a 2008 or even a 2000 retiree had been following the 4% rule since retirement, their portfolios would be no worse off than any of the other "terrible" historical market scenarios that created the 4% rule from retirement years like 1929, 1937, and 1966."

False assumptions by Ontario pension planners
06/06/15 Government Retirement
"I believe that Canadians are reasonably well prepared for retirement. Most save more than the 5 percent household saving rate. Most can retire comfortably on less than the traditional 70 percent replacement target. The greatest challenges come early in their adult lives when the burdens of acquiring a home and supporting young children strain the family budget. After that, things get easier."

New math for retirees
05/09/15 Retirement
"The big question now - difficult even for an aerospace engineer to answer - is whether a new worst case is beginning to play out, given the painfully low interest rate environment, which yields little for safer bond investments, where retirees often hold a big portion of their money."

The paradox of success
04/25/15 Behaviour Retirement
"The paradox of success is this: The mental wiring that enables a person to claw to the tippy-top of Corporate America or sports or entertainment or any other field that offers vast wealth is the same mental wiring that most of the time leads people not to retire before they have to - no matter what the diminishing marginal utility of money would suggest."

The Financial Freedom Index
02/20/15 Retirement
"My adjustments suggest that a median Canadian family in 2015 has about $74,000 in annual after-tax income. I figure to generate that same income in a portfolio split evenly between Canadian stocks and Canadian five-year government bonds, you would need just under $4.5-million." [For those who want to party like Bertie Wooster.]

Achievable retirement planning
02/20/15 Retirement
"Despite widespread warnings to the contrary, veteran financial planner and investment advisor Jonathan Pond believes no matter what your age or circumstances you can take steps to get your financial house in order and achieve a comfortable retirement." [video]

When to retire
01/18/15 Retirement
"If you reach your mid-60s and feel you may not be able to afford the retirement you want, a simple solution can have a surprisingly large impact: keep working for another three years."

Can't stay retired
12/06/14 Retirement
"The AARP research found that 55 percent of retirees are employed voluntarily, including the 25 percent who reported working because they wanted to be physically or mentally active."

The best of Retire Rich
11/15/14 Retirement
"Videos that will change your financial future"

We're unduly discouraged about retirement
11/08/14 Retirement
"Pension expert Malcolm Hamilton explains why Canadians needn't worry so much."

Managing money for retirement
10/11/14 Retirement
"There are not enough resources to give all of the Baby Boomers a lush retirement, without unduly harming younger age cohorts, and this is true over most of the developed world, not just the US."

Budget-friendly entertainment ideas
10/04/14 Thrift Retirement
"Yes, retirement can be expensive if you insist on multiple residences, luxury vehicles and frequent exotic locations. On the other hand, you can get by on a lot less and as the old saying has it, the best things in life are free."

Dreaming of a cheap tropical retirement?
09/19/14 World Retirement
"Moving to a low-cost, tropical paradise, where $30,000 a year can put a couple into the upper middle class, is fast becoming the dream du jour for fifty-somethings who find themselves short on retirement funds."

How much can you safely withdraw?
06/14/14 Stingy Investing Retirement
"Following the 4-per-cent rule is sure to lead to a happy retirement. That's how much an investor can extract from a balanced portfolio when they retire without having to worry about running out of cash before running out of time. At least, that's the theory."

The new game of retirement chicken
04/27/14 Retirement
"One consequence of ending mandatory retirement is that long-service older workers in their late 60s or 70s are often now entitled to sizeable packages if they're laid off. That often creates a situation where older workers who might otherwise retire voluntarily with no compensation are now waiting to get laid off with a tidy settlement."

The Glidepath Illusion
03/02/14 Markets Funds Arnott Retirement
"Rob Arnott explains why target-date funds fail to either maximize wealth or minimize uncertainty about future income."

Retiring on your own terms
02/01/14 Zweig Retirement
"To be assured of having enough money to fund a comfortable retirement, you should save a total of 22 times the annual income you want to earn when you retire. That is higher than many previous estimates, but it offers near-certainty of hitting your target."

Different strategies find common ground
11/17/13 Hallett Retirement
"Two recent but different research papers on the mechanics of withdrawal strategies find some common ground against the conventional wisdom while sharing some aspects of the popular "bucket" strategy, in which assets are segmented by certain categories."

Canadians can afford retirement
09/05/13 Retirement
"A recent study from Statistics Canada on 'The Adequacy of Household Savings' explicitly takes wealth into consideration. It found that two-thirds of Canadians exceed optimal savings for retirement; for the rest, the 'undersaving is small' at less than $30,000 on average and concentrated among low income earners, who already get substantial pension supplements from government. These arguments are validated by the OECD Report on pensions that found that Canada has one of the lowest rates of elder poverty in the world."

Extreme saving
06/01/13 Thrift Retirement
"Today, the 31-year-old father of three saves more than 70% of his net income with the goal of retiring in a few years."

The hidden DB in DC plans
05/12/13 Retirement
"The greatest attraction of a DB pension plan is the appearance of certainty in the levels of retirement income it promises to its members, which contrasts with the uncertainty of retirement income levels that a DC pension plan can provide to its members. Readers may be interested to discover, though, that their DC pension plan (or other retirement savings plan such as a group RRSP or deferred profit sharing plan) may have a minimum level of DB hidden within it; in fact, it.s highly likely to be the case for any Canadian DC arrangement."

Meet the man who retired at 30
04/27/13 Retirement
"But I didn't start saving and investing particularly early, I just maintained this desire not to waste anything. So I got through my engineering degree debt-free - by working a lot and not owning a car - and worked pretty hard early on to move up a bit in the career, relocating from Canada to the United States, attracted by the higher salaries and lower cost of living. Then my future wife and I moved in together and DIY-renovated a junky house into a nice one, kept old cars while our friends drove fancy ones, biked to work instead of driving, cooked at home and went out to restaurants less, and it all just added up to saving more than half of what we earned. We invested this surplus as we went, never inflating our already-luxurious lives, and eventually the passive income from stock dividends and a rental house was more than enough to pay for our needs"

The retirement gamble
04/27/13 Retirement
"Retirement is big business in America, but is the system costing workers and retirees more than what they're getting in return?"

Retirement is cheaper than you think
03/17/13 Retirement
"The Statistics Canada Survey of Household Spending for 2010 found senior couples on average spent a combined $53,100 a year (including money paid to income tax). From looking at that figure as well as talking to seniors and their advisers, I estimate that a retirement lifestyle that you might call middle class or a bit better costs about $40,000 to $70,000 per couple (also including income tax payments)."

Small towns can offer big savings
02/03/13 Retirement
"Studies have shown that a majority of Canadians have thought about where they want to retire but only a small portion would actually leave the country. Some appear to be moving to smaller communities, according to 2011 census data which shows the population of people 65 and over growing in small towns."

How spending declines with age
06/12/12 Retirement
"Most of us already have a hunch that consumption declines with advanced age. If you had a middle-class upbringing, you might have had a grandmother who regularly gave cash gifts to her grandchildren every so often because she no longer spent the money on herself. She probably hadn't bought a car nor had she travelled anywhere for years. Once people cross over into their 80s, they just seem to be less inclined to spend their money. But we can't rely on anecdotal evidence for something as important as this. Fortunately, some hard data exist."

Earnings Assumptions and Century Bonds
09/26/10 Retirement
"So in an environment like this, where interest rates are low, and surpluses could not be built up in the past, pension funds are hurting. The truth is, they are worse off than their stated deficits imply. For economic and political reasons, the likely outcome resembles the riddle of how one eats an elephant: one bite at a time.So we will see investment earnings assumptions and discount rates fall slowly, far too slowly to be the economic truth, but slowly recognizing funding gaps as corporations eat the loss one bite at a time, as they can afford to."

War between the sexes
08/25/10 Government Retirement
"On average, 65-year old men today will receive only 43.6% of the net benefits that women receive, and young men today can expect a net tax burden over their lifetimes that will be 3.4 times greater than for women."

The cost of retiring at 66
06/27/10 Government Retirement
"The state pension age looks set to rise to 66 in just six years' time, and may be extended far further -possibly to 70. Unions have condemned these "work till you drop" plans - but they shouldn't come as any surprise."

Optimal withdrawal rates
03/25/10 Retirement
"Our main practical conclusion is that counseling retirees to set initial spending at constant 4% of their nest egg is consistent with lifecycle theory only under a limited set of mortality-risk aversion and time preference parameters. We show exactly how the optimal behavior in the face of personal longevity risk is a plan that adjusts consumption downward in proportion to survival probabilities - adjusted for pension income and risk aversion - as opposed to blindly withdrawing the same inflation-adjusted income for life."

Low savings are the problem
02/16/10 Retirement
"The average contribution to a RRSP was $5,412 but the median contribution was only $2,780. The contributions used up just 6.0% of total contribution room available. The data suggests that the vast majority of Canadians have accumulated vast amounts of RRSP contribution room. Only a tiny fraction of Canadians have used up all their contribution room and would benefit from any boost in RRSP limits."

RRSPs and the GIS don't mix well
11/29/09 Government Retirement
"Canadian seniors with low incomes receive a Guaranteed Income Supplement (GIS) from the government. Within a certain income range, each additional dollar of income reduces the GIS payments by 50 cents. This amounts to a 50% tax on this income. Combining this with the regular income taxes, the effective tax rate on RRSP withdrawals can be over 70%."

The looming retirement crisis
09/18/09 Retirement
"Wilful neglect leading to inevitable disaster is quietly cascading across Canada's entire retirement savings system. Many haven't made sufficient provision, and a bailout seems neither feasible nor likely."

Retirees need only 60% of working income
09/23/08 Retirement
"The Russell finding is closer to the 50 or 60% replacement ratio that actuary Malcolm Hamilton has often cited, and for similar reasons: "Certain living expenses tend to drop significantly during retirement as most retirees are mortgage-free and no longer incur employment costs such as daily transportation," says Irshaad Ahmad, president and managing director for Russell Canada"

Spending safely
07/10/08 Markets Retirement
"If you're getting ready to retire, you may already be familiar with "the 4% solution." For more than a decade, financial advisers have warned retirees that draining over 4% of their nest eggs in their inaugural retirement year could ultimately lead to financial ruin. The 4% mantra started with Bill Bengen, 60, a soft- spoken investment adviser in El Cajon, Calif., who has written a series of landmark research papers since 1994 on safe withdrawal rates. What most people don't realize, though, is that Bengen no longer recommends the 4% rate."

Your post-subprime portfolio
07/10/08 Funds Indexing Retirement
"Saving for retirement has never been easy, but the past year has made a complicated task all but overwhelming. The ongoing collapse of the credit markets, sparked initially by problems in subprime mortgages, has challenged some of investors' most cherished and reliable investment beliefs and strategies. Auction-rate securities sold as "cash equivalents" ended up sticking investors with huge losses, supposedly low-risk bond funds blew up, and for those who thought they'd pay for retirement by selling the house.well, need we say more?"

Study finds pension-plan returns top 401(k)s
06/21/08 Retirement
"Pension-plan returns outperformed 401(k) retirement accounts from 2003 to 2006, the most recent bull market, according to a study. Pension plans beat 401(k) plans by 1.7 percent in 2003, 2 percent in 2004, 1.1 percent in 2005 and 1.6 percent in 2006, said the survey released today by Watson Wyatt Worldwide, a global consulting company based in Arlington, Virginia. Looking at a broader period, 1995 to 2006, pensions outperformed 401(k)s by 14 percent, the study said."

Defined benefit vs. 401(k) plans
06/21/08 Retirement
"This most recent comparison finds that between 1995 and 2006, DB plans outperformed DC plans by an average of 1 percent per year. Earlier studies also found that, over time, DB plans attained higher returns than did 401(k) plans."

How long will you live?
06/10/08 Retirement
"The hardest question in retirement planning is the first one: How long do you expect to live? I'm afraid recent developments are making that question even harder to answer. But it's unavoidable, so what's the smart way to think about it now?"

Wealthy? Here's some good news
05/27/08 Retirement
"When wealthy Canadians look at how much money they'll need to save up for retirement, they can be in for a shock. The latest report from the mutual fund industry recommends that you replace 80% of your working income when you retire. That means if you make more than $100,000, you'll need to save up two or three million bucks. Luckily, says actuary Malcolm Hamilton, if you're wealthy, you don't need anything close to an 80% replacement ratio to maintain your standard of living." [The table at the bottom of the page is the interesting part of this mini-article.]

Are you saying no to free money from your employer?
02/17/07 Retirement
"About that money your employer has ready to add to your retirement savings. You're not wasting it, are you? Lots of Canadians are. Some aren't participating in group registered retirement savings plans and thus missing out on matching employer contributions. Others are neglecting the money they and their bosses are putting into defined-benefit pension plans and thus hurting their returns. Pensions are complex, so we tend to ignore them and hope for the best. But for many people, pensions and group RRSPs will be as important to them after they leave the work force as the individual RRSPs everyone focuses on at this time of year. The cost of ignorance: Tens of thousands of dollars you might otherwise have had available when you retire."

Destitute at 80
02/12/07 Retirement
"A number of advocates and studies provide for 5% withdrawal rates: "I only want $50,000 from my million dollars" and have it last for 30 years. The calculated success rate for that rate of withdrawal is 73%. Pretty good odds...except when we consider the impact of valuation."

Procrastination will cost you
11/26/06 Retirement
"I'm inspired to write about something as basic as starting your retirement savings sooner rather than later. You see, I was reminded once again that each generation has to be educated on the fundamental truth that time is your biggest ally when it comes to financial security. Make sure your kids understand this."

A 'layer cake' plan for your retirement
09/10/06 Retirement
"The "conservative" client wants to leave a legacy and assumes a longer than 30-year lifespan, reducing her withdrawal rate to 4 percent. The "aggressive" client assumes a shorter than 30-year lifespan, a performance-based withdrawal approach, and other factors that boost his withdrawal rate to 7.6 percent."

Bing's secrets to a happy retirement
07/02/06 Retirement
"The truth is, those who intend to have a happy retirement must deliver the goods on the human aspects of the issue as they do on the fiduciary ones. Unfortunately this takes the kind of cogitation that you, as a reader of this magazine, are no longer set up to do very well. You've been in business so long that your mind is accustomed to a fine blend of wishful thinking and can-do attitudinizing on subjective subjects. "It's gonna be great!" you tell yourself. "Wake up at noon every day like I did when I was a teenager! Have a bagel! Play 36 holes! Couple of drinks at the 19th green! Wake up and do it again the next day! That's what I call living!" Right. Have you thought about what 25 years of that will be like?"

Life is less expensive for older couples
06/07/06 Retirement
"Imagine two couples. They live side by side in virtually identical houses. The Youngs have two children in their early teens. The Olds have lived there forever and are retired. Now guess the income the Olds would need to have the same standard of living as the Youngs"

The spending question
05/21/06 Retirement
"What will you really shell out in retirement? Maybe not as much as financial planning calculators tell you."

Stave off old-age poverty
04/23/06 Retirement
"Although few elderly Americans are officially poor, 75% live on less than $26,777 yearly. Even a tiny amount stashed in investments and savings make a difference in old age."

Final paycheck gets ever farther away
04/16/06 Retirement
"It's getting harder to quit. By some measures, Americans are richer than ever before. Yet it is proving increasingly difficult to amass enough money to retire in comfort. What's the problem? We face a fistful of them -- including these seven."

The best of the Internet calculators
02/25/06 Retirement
"There's a problem you should be aware of with some of those handy calculators available on the Internet to help ensure you're saving enough for retirement. They're kind of useless on the whole, especially the ones offered by companies selling financial products."

Divorce can scramble nest eggs
02/19/06 Retirement
"Once the emotional wounds from a divorce start healing, newly single people begin to grapple with the other big aspect of the damage -- the financial trauma. Nothing underscores the new reality as much as RRSP season."

The depressing truth
02/18/06 Retirement
"Ask a wage slave what he'd like to accomplish. Chances are the response will be something like "I'd start every day at the gym and work out for two hours until I was as buff as Brad Pitt. Then I'd practice the piano for three hours. I'd become fluent in Mandarin so that I could be prepared to understand the largest transformation of our time. I'd really learn how to handle a polo pony. I'd learn to fly a helicopter. I'd finish the screenplay that I've been writing and direct a production of it in HDTV."..."

The myth of the $1 million retirement
02/16/06 Retirement
"Ignore the experts who say you'll need a vast sum to ever quit working. How much you need to retire is really entirely up to you."

3 rules for a happy retirement
02/05/06 Retirement
"Research reveals it's how you manage your time and money that counts, not just how much you've got."

Caveat investor
01/14/06 Retirement
"Studies show that many people overestimate their knowledge of everything from inflation to risk diversification and compound interest. One survey in Australia found that 37% of people who owned investments did not know that they could fluctuate in value. In America 31% did not know that the finance charge on a credit-card statement is what they pay to use credit."

Retirees: look out below
01/09/06 Retirement
"The number of private pension plans fell by 75% over the past two decades to 31,000 and now cover a mere 20% of workers. In 2004 alone, 11% of surviving plans were frozen to new contributions, according to Barclays Global Investors. All told, less than half of U.S. workers are now offered any pension plan at all"

Healthy planning
12/04/05 Retirement
"Though the standard age for retirement is 65, only 64% of people age 55 to 64 are employed. The other 36%, not yet eligible for Medicare, either have to be married to someone with employer health insurance or have to scramble to find coverage. The scrambling is occasioned by two things. One is that, even for healthy people, medical insurance is fearsomely expensive. Employers have seen their costs climb 63% over the last four years, says personnel consultant Towers Perrin, and will spend an average of $14,500 next year on insurance for a family of four. The other is that individuals trying to buy insurance on their own confront a difficult marketplace whose providers don't particularly want their business, especially if they have a preexisting medical problem."

In the future, you'll need less money
07/19/05 Retirement
"Has your financial planner told you to save more? He may be dead wrong. He isn't alone. Most of the models used for retirement planning may also be wrong for the same reason. How can this be? Easy. The models and their supporting software are based on an assumption that isn't supported by real data about our spending and how it changes as we age."

S&L redux
06/22/05 Retirement
"Not so in America, where people are speaking openly of a taxpayer bail-out to rival the rescue of America's savings-and-loan (S&L) sector in the late 1980s. The pensions insured with the PBGC showed a shortfall of almost $354 billion at the end of the last fiscal year, compared with $279 billion a year earlier. If the deficits of less underfunded plans are rolled in, the total shortfall is more than $450 billion."

Reality retirement planning
06/08/05 Retirement
"Traditional retirement planning assumes that a household's expenditures will increase a certain amount each year throughout retirement. Yet data from the U.S. Bureau of Labor's Consumer Expenditure Survey show that household expenditures actually decline as retirees age. Consequently, under traditional retirement planning, consumers tend to oversave for retirement, underspend in their early years of retirement, or postpone retirement."

Confusion dogs foreign content change
02/27/05 Retirement
"This week's budget eliminated the 30-per-cent foreign content limit for registered retirement savings plans and pensions, effective immediately. However, a federal finance department official said yesterday that the budget must be passed in the House of Commons for its provisions to become law."

A tale of three options for your RRSP dollars
02/27/05 Retirement
"Let's suppose you have $7,500 after taxes available to invest each year. I want to compare three options for that money: 1) Contributing that amount to your registered retirement savings plan if you have the contribution room; 2) Investing that money in an open (non-registered) account; or 3) Using that money to cover the interest cost on an interest-only loan to invest outside an RRSP."

Eliminating foreign limit? It's about time
02/27/05 Retirement
"Finance Minister Ralph Goodale did investors a favour in yesterday's budget by ending the 30-per-cent limit on foreign assets for pension plans and RRSPs. What's less obvious, but more important, is that he placed the economy on a stronger footing by removing a crutch that served to help to prop up uncompetitive companies."

When not to buy an RRSP
02/11/05 Retirement
"about 80% of the time, the RRSP makes sense. So what happens the other 20% of the time? When does it not make sense to buy RRSPs?"

Making RRSP withdrawals is seldom a good idea
02/11/05 Retirement
"There seems to be some confusion about one of the top commandments in financial planning, which is to have an emergency fund containing ready cash. This money is supposed to sit in a money market fund or high-interest savings account. It's not supposed to come from your registered retirement savings plan."

Working retirement
04/29/03 Retirement
"New research shows many of tomorrow's retirees will be returning to work."

U.S. pension agency is sinking
01/27/03 Retirement
"The U.S. federal agency that insures the pensions of about 44 million Americans has been pounded by a succession of big corporate bankruptcies and has burned through its entire $8 billion surplus in one year."

How would you benefit from boost to the RRSP limit?
01/23/03 Retirement
"If your income is below $75,000 a year, then it means little to you that the federal government is looking at raising the contribution limit for registered retirement savings plans."

RRSPs at a glance
01/22/03 Retirement
Lots of quick points on RRSPs

Is international diversification good?
01/20/03 Retirement
"The results of the simulations of fixed monthly withdrawals and inflation-adjusted monthly withdrawals suggest that retirees who prefer portfolios of at least 50 percent equities benefit modestly from including EAFE stocks as 25 percent of the market value of their portfolios in spite of the inferior performance of the EAFE Index in the 1990s. It is clear from our analysis and from previous literature that international diversification has not been a panacea that can be relied on to offset U.S. bear markets. Nevertheless, the low correlation of EAFE returns with those of U.S. stocks, and EAFE's occasional superior returns, imply merit in international diversification for longer payout periods."

Pension managers ask Ottawa to end limit
01/10/03 Retirement
"Canada's pension managers are calling for the federal government to scrap the 30-per-cent foreign content limit on retirement savings plans in its new budget, saying the move would benefit ordinary Canadians and would not hurt the dollar or the stock market. The Association of Canadian Pension Management and the Pension Investment Association of Canada say a new study indicates that eliminating the limit would be equivalent to giving Canadians a tax cut worth between $1.5-billion and $3-billion a year."

RSPs losing favour: survey
01/07/03 Retirement
"Investors seem shell-shocked, Prof. Milevsky said, after opening one monthly statement after another showing that their retirement savings are shrinking. In the 1990s, people became accustomed to market downturns that seemed to reverse course by the time they received their next statement, he said. Prof. Milevsky was most surprised to see people rein in -- based on the short-term performance of the market -- their expectations for the amount they will need to live comfortably after retirement."

Portfolio risk in dollar cost averaging
12/29/02 Retirement
"In fact, volatility - or risk - is the enemy of any wealth accumulation program. And investors who take excessive risks, in pursuit of illusory gains, may only wind up broke in the long run. Forget that comfortable retirement."

Markets hurt DP plans
11/22/02 Retirement
"Dismal stock markets have left some companies with future funding shortfalls in their defined-benefit pension plans, but experts say that, in the vast majority of cases, employee pensions are secure."

On the edge of a credibility gap
09/30/02 Retirement
"Three years of falling equity prices have finally taken their toll on the US pensions industry. According to UBS Warburg, the Swiss banking giant, companies in the S&P 500 index are now in cumulative deficit on their pension funds for the first time since 1993. This means that S&P 500 companies will report aggregate pension costs - rather than income - for 2002: a swing that will adversely affect earnings by an average $0.95 per share."

Up against the pension headwind
07/23/02 Retirement
"As corporate earnings attempt to recover in 2002, they face a huge locked-in obstacle from lower pension returns -- no matter how well the market performs."

A new personal finance
07/01/02 Retirement
"Outlined in a recent working paper, "Life-Cycle Finance in Theory and in Practice," Bodie proposes that our common measure of personal welfare -- wealth -- is inadequate. Instead, he suggests we measure personal welfare by our lifetime access to goods, services and leisure."

Simple math of wealth creation
06/24/02 Retirement
"The Less You Spend, The More You Have. Write it on the front of your wallet, your cheque book, your conscience. That, and the corollary of The More You Spend, The Less You Have, are elemental economic observations, and ones that we all begin to make for ourselves at an early age."

Retirement: Ready or not, hear it comes!
05/15/02 Retirement
"Will you have enough? Study after study shows that Americans aren't saving enough for retirement."

Primer for Canadian Do-It-Yourself Investors
01/04/02 Retirement
"The purpose of this web document is to serve as a primer for Canadian do-it-yourself (DIY) investors who wish to manage their own investment portfolio. It is aimed particularly at individuals who will be using their investment portfolio as the main source of retirement income."

Retirees caught short by stocks return to work
10/01/01 Retirement
The real meaning of risk hits home as some retirees are forced back to work due to the evaporation of their stock portfolios.

The retirement calculator from hell, part III
09/16/01 Retirement
As the recent tragedy has shown, overly confident retirement planning is, regrettably, a fools errand.

The Stingy News Weekly

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