Monthly Archives: June 2016

Wealthsimple & profile me on Findependence & Victory Lap

growconf-7e3020f3Making the rounds of social media this afternoon is a profile of Yours Truly created by Toronto-based robo adviser Wealthsimple.

It can be found at its Grow blog, titled One of Canada’s Favourite Money Gurus Tells Us How He Retired at 60 Without Ever Being Rich. We hope to run the piece in its entirety here at the Hub but in the meantime, social media waits for no one.

It was based on an interview conducted a few weeks ago and readers may find the prose as eclectic as the artists’ rendition of myself. But as one reader noted on Facebook, there’s plenty of personal finance “wisdom” in there (if I do say so myself): no surprise since it refers in part to last summer’s 7 Eternal Truths of Personal Finance that ran in the Financial Post, and which are revisited in the book I’m releasing this summer. Written with Mike Drak, it’s called Victory Lap Retirement. Link is to Mike’s new site, where you can preorder the book. We’ll resume running Mike’s Victory Lap blogs here at the Hub in a week or two.

The Wealthsimple profile also refers obliquely to the new book. Q&A with me on benefits of Findependence

Also today, published a Q&A with me that also talks about Findependence and Victory Lap Retirement. Click on Jonathan Chevreau on the Benefits of Financial Independence. It does a pretty good job of summarizing what Mike and I describe in the book: the years of “slaving and saving” needed to get to the Findependence Finish Line (aka Findependence Day), and then the post-corporate Victory Lap phase that ensues.

MoneySense blog on Bonds

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Retirement income planning for you and your spouse

patmckeoughBy Pat McKeough,

Special to the Financial Independence Hub

There are a few retirement income planning steps you and your spouse can take to lower your taxes.
These steps work especially well if your spouse makes a lower income than you do.

There are lots of ways to shift investment capital and income to the lower-income spouse. This lets you lower your overall tax bill right now. It also ensures that each spouse gets roughly the same amount of income in retirement. That will cut taxes later, as well.

We’ve discussed other retirement income planning techniques like paying your spouse’s bills, setting up a spousal RRSP and swapping assets for cash or shares. Here are more ideas:

Reinvesting attributed income

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Motley Fool: CPP expansion too late for Boomers but a win for their children

motley-fool-logoMy take on this week’s expansion of the Canada Pension Plan just went up at the Motley Fool Canada site: click on the highlighted headline, CPP Expansion too late for Boomers but a Win for their Children.

The blog (which is free to access) goes into more detail but in a nutshell, what it means is that once fully implemented, those who choose to collect CPP benefits at the traditional retirement age of 65 will receive as much as $17,478 a year, compared to $13,110 right now. That assumes someone who has is maxed out on the earnings ceiling (known as the Year’s Maximum Pensionable Earnings or YMPE) on which CPP benefits are calculated:  currently $54,900 a year. The many Canadians who earn less than that will receive correspondingly less.

A key feature is that by 2025 this earnings ceiling will rise to $82,700, which means that those earning that kind of money will pay higher premiums but ultimately receive more benefits in retirement. Obviously, those who make less than that will pay lower premiums and receive lower benefits.

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Will an expanded CPP speed your Findependence Day?

cpp_image2Lots of media coverage this week about the (relatively) modest expansion of the Canada Pension Plan. As I noted in the print edition of Wednesday’s Financial Post (and online), this isn’t going to help almost-retired baby boomers in any material fashion but it’s certainly a welcome development for the generations that follow, including the Boomers’ own kids.

I note that quite independently, the Globe & Mail’s Rob Carrick was equally in favour of the changes: We can’t afford NOT to make these changes.

(Added Thursday: My take on this for Motley Fool Canada can be found by clicking on this highlighted headline: CPP Expansion Too Late for Boomers but a Win for their Children.)

As I speculated in the headline of sister site, you could argue that a slightly sweeter CPP package of benefits should at least marginally speed up the arrival of the Millennials’ collective Findependence Day. However, I also noted that — as in my own case — there is still an incentive to delay the receipt of CPP benefits. In a way, Boomers who don’t take “early” CPP at 60 and opt to wait until closer to 70 are choosing to almost double their ultimate benefits.

There’s still an incentive to delay receipt of benefits

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Vanguard unveils four single-factor actively managed ETFs

MM30087LOGOVanguard Investments Canada Inc. has launched four new actively managed ETFs that began trading on the TSX on June 22. In a press release, the company said they are the first actively managed Exchange Traded Funds it provides in Canada.

In the U.S., and despite its strong image as a provider of low-cost “passive” index-tracking strategies, The Vanguard Group Inc. has had a long track record with actively managed strategies and, with almost US$1 trillion in global actively managed assets, is one of the world’s largest active managers.

The new “active” products are managed by Vanguard’s Quantitative Equity Group (QEG), which has existed since 1991. Each of the new ETFs will have a management fee of 0.35%. (Final MER may be slightly higher after fees and expenses).

The four new ETFs are:

Vanguard Global Minimum Volatility ETF, ticker VVO.

Vanguard Global Value Factor ETF, ticker VVL.

Vanguard Global Momentum Factor ETF, ticker VMO.

Vanguard Global Liquidity Factor ETF, ticker VLQ.

For more on the development, see this link on the company’s website.