The magazine argues that while the tech boom may get bumpy, “it will not end in a repeat of the dot com crash.” Certainly, the past week was mostly positive for growth stocks like the four that make up the so-called “FANG” acronym: Facebook, Amazon, Netflix and Google. Amazon turning a profit: who knew?
True, none of the FANG stocks pay dividends but the older tech giants that do, like Apple, IBM and Microsoft, experienced haircuts this week.
Recently, Globe & Mail personal finance columnist Rob Carrick wrote an article entitled ‘It’s time to get real about retirement planning.” In it he stated that people should not count on working past retirement age because many will not be able to do so due to health issues. Everyone that knows me is aware that I’m a big promoter of continuing to work at something you love, for as long as you can, so this article really caught my attention and got me to do some serious thinking. The following are the conclusions that I came up with:
Always try to put the odds in your favour
Want to increase the odds of extending your work life past the normal retirement age? You need to adopt a healthy lifestyle as early as possible. Most of us know what to do but for whatever reason fail to do it. You need to keep active, work out on a regular basis, eat the right foods, and stay engaged. Odds are you will live enjoy a longer and happier life than your smoking neighbour whose retirement is based on watching tv and drinking lots of beer to help kill the boredom.
The financial services industry would have you believe that individual investors don’t want to pay upfront for investment advice – in fact, the industry claims that investors prefer to pay for financial advice through fees that are part of their mutual funds.
But we all know mutual funds in Canada cost too much and the relationship between investors and financial advisors is mostly transactional in nature. Embedded commissions and trailer fees might make sense for investors who are just starting out, but over the long term this conflict of interest will be expensive and lead to poorer outcomes for investors.
An unconventional pairing
With the relatively new arrival of fee-only financial planners – advisors who don’t sell products but offer unbiased and objective financial advice for a set fee – and the emergence of robo-advisors – online investment management services – there is an opportunity for Canadians to access a better form of financial advice that costs less than the traditional bank advisor-mutual fund model.
That’s right, pairing a fee-only financial advisor with a robo-advisor (or DIY, if that’s your thing) can actually save you money and lead to better investor outcomes.
On Tuesday, Challenge Factory held a briefing via teleconference to update Canadian organizations interested in demographics, aging and longevity on the recent 2015 White House Conference on Aging, held on July 13th. For the Hub, Challenge Factory president Lisa Taylor adapted her remarks for the guest blog that follows. – JC
Lisa Taylor, Challenge Factory
By Lisa Taylor,
Challenge Factory
Special to the Financial Independence Hub
I first met Nora Super, CEO of the 2015 White House Conference on Aging last November when I was a speaker at a large symposium in Arizona focused on the aging workforce. It was my distinct honour to speak with the conference team in the weeks before the event and to participate as the only Canadian host of watch parties.
In 1961, Present Kennedy had the foresight to convene the first ever White House Conference on Aging – and he ensured that at least once a decade Congress was obligated to hold the event as a way to ensure the complexities and opportunities longevity offer were considered from a social, economic, environmental and legal perspective. “Science,” Kennedy is quoted “has added years to our life. Our task is now to add life to those years.”
50th anniversary of Medicare & Medicaid
This year’s conference happened in the year that marks the 50th anniversary of Medicare, Medicaid, and the Older Americans Act, as well as the 80th anniversary of Social Security. Organizers stated “The White House Conference on Aging is an opportunity to recognize the importance of these programs, highlight new actions to support Americans as we age and focus on the powerful role that technology can play in the lives of older Americans in the decade ahead.” Continue Reading…
As the Globe & Mail and Financial Post both reported Tuesday, a new study by the Fraser Institute finds that an expansion of the Canada Pension Plan (CPP) may not raise incomes of retirees because people will save less on their own.
The report, which is to be released today, found that private savings fell as CPP contribution levels rose between 1986 and 2008. CPP contribution rates were 3.6% of earnings in 1986 (half from employers, half from employees) and rose to the current combined level of 9.9% by 2003.
Impact varies with income and age
The study found the impact of higher CPP contribution rates varies with income and age. So for households with annual income under $34,140, a one percentage-point increase in contribution rate resulted in a 1.56-percentage-point fall in private savings. But middle-income households earning up to $59,920 cut their savings by 0.72 percentage points: less than the full amount of the CPP increase. And high-income earners making over $59,920 were found to have almost no change in their saving rates as CPP rates rose.
The report’s co-author, Charles Lamman told the Globe that relatively few Canadians are under saving for retirement: mostly the elderly, widows and singles, and those without a work history that makes them eligible fort the CPP. So for those people, a CPP expansion would not be helpful.
The Financial Post version of the story can be found here. The Post also ran a piece by the report’s authors on its FP Comment page: Shifting Retirement Savings. You can also view a video commentary on the report on the Fraser Institute’s website, here.
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Good cover story in the current issue of the Economist on the technology boom and the Nasdaq composite index surpassing its previous all-time high early in the year 2000.
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