Monthly Archives: January 2017

The hidden dangers of leaving an inheritance without proper planning

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For many investors, setting aside inheritance money for their heirs and loved ones is a natural part of retirement planning. But doing this successfully is not easy, and fortunes rarely last for long. In fact, long-term studies show that six out of 10 family fortunes get dissipated by the end of a second generation. And nine out of 10 are gone by the end of the third generation.
In fact, there’s a good chance that at least one member of a couple in their 70s will live to age 90 or beyond. So the typical heir could be, say, age 60 before he or she gets a dime.
Moreover, medical expenses soar in later years. That’s especially so now, with today’s faster pace of medical advances, many of which are hugely expensive. It may help to inform your heirs that your retirement planning doesn’t include cutting corners when it comes to keeping yourself alive, mobile and pain-free. Continue Reading…

3 simple techniques for overcoming financial stress in Retirement

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Senior Couple Were Disappointed While Reading Letter On TableBy Leigh Marcos

Special to the Financial Independence Hub

We all look forward to retirement: complete freedom. We can do what we want, when we want, and don’t have to traipse into an office every day to join the rat race that dominates younger people’s lives.

Unfortunately, the transition to not working can come with a different set of pressures, not least the financial stress triggered by your drop in income. Current statistics show that 68% of working-age people in the U.S. don’t participate in an employer-sponsored pension plan, so this is a common anxiety that affects much of today’s retired populace.

Luckily, there are ways to combat financial stress and still relish what should be some of the most enjoyable years of your life. Here are three simple steps to help you do so:

Value yourself, and act like it

All too often, the change of routine involved in retiring after a lifetime of work can cause us to drift into a kind of daily limbo where time starts to lose meaning, and so as a consequence does our everyday life. Combat this lack of direction by actively redefining who you are without your job. What do you stand for? What do you still want to achieve? What do you enjoy doing? How do you spend your time? Take some time to reflect on these questions: brainstorming can help, as can physically writing things down or discussing them with a friend.

Make sure to avoid isolation by getting involved in regular, structured activity that enriches your life and brings you into contact with people who have a positive influence on you. This will help you keep financial worries in perspective and remind you that there are other important and valuable things in life.

Stay healthy

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5 Ways to maximize your returns next Tax Season

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By Caroline Battista, H&R Block

Special to the Financial Independence Hub

It’s probably not the first time you’ve heard the saying ‘a little preparation goes a long way’. And that is especially true when it comes to filing your taxes – I can attest to that after years of counselling clients and ensuring they get what’s theirs each tax season.

Below are five ways to help you ease the burden with some simple end-of-year preparation tax tips that will help you maximize your returns and get ready for the upcoming tax season.

1.) Keep a calendar with key dates

Because timing is everything, keep a calendar with key tax filing dates. The deadline for filing your 2016 personal tax return is May 1, 2017 and June 15, 2017 for the self-employed. You can begin preparing your return once your T4s and other slips arrive. Also, try to keep up with important dates that can increase your chances of receiving a larger refund. For example, by scheduling health-related treatments before the end of the year you can maximize your medical expense deduction. Continue Reading…

Boomer & Echo’s Review of Victory Lap Retirement (+ a giveaway)

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There’s a growing body of evidence that suggests postponing retirement – even by just one year – can lead to a longer, healthier life. The reality is that we’re living longer and saving less. Something has to give. But another year or two spent pushing paper in a cubicle is probably not the holy retirement grail we’ve been searching for.

Related: Growing older in America – The Health and Retirement Study

Indeed, if you’re healthy and can afford to stop working, the idea is to find something else you’re passionate about and do that instead – whether it’s switching to a new career in an unrelated field, writing a book, starting a blog, or simply volunteering at your favourite charity. Call it your work-optional years.

Victory Lap Retirement

Authors Mike Drak and Jonathan Chevreau call it your Victory Lap Retirement. The authors argue that the idea of retirement has to change in the sense that going from 100 percent work mode to 100 percent leisure mode is boring and fraught with risk.

The fact is we might be retired, in the traditional sense, for thirty or forty years – as long, or maybe longer, than we spent during our working lives. That’s too long to spend in an armchair watching Seinfeld reruns.

How do we find purpose and meaning in this third stage of life? More importantly, for some, how do we finance it?

 In Victory Lap Retirement, Drak and Chevreau describe a post-employment lifestyle designed with a unique blend of work and play that allows you to live life to the fullest, on your terms, while you’re young enough to enjoy it.
Financial Independence

 

Continue Reading…

Happy New Year! Time to add $5,500 to TFSAs

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Welcome to 2017. We’ll keep this one brief but a reminder that on the money front, there’s already a positive action you can take, either online now or whenever your financial institution opens its doors this week: make the 2017 contribution to your TFSA, or Tax-free Savings Account. That’s $5,500 per individual, amounting to $11,000 for couples.

Remember, if you don’t have the ready cash you can make transfers-in-kind if you have securities in non-registered investment accounts. (Some tax may have to be paid if this triggers capital gains).

Speaking of taxes, Jamie Golombek has a good column in this weekend’s Financial Post on current tax brackets and other tax data: click on Here are the New Numbers you need to get a jumpstart on your 2017 taxes.

How investing can help you achieve Financial Independence

While today’s blog is necessarily brief, a reminder that Saturday’s guest blog provides a timely summary of how investments performed in 2016, and an overview of how successful investing is a key ingredient  to achieve Financial Independence (aka Findependence). Click on the second link to get to our sister site’s republishing of the Boomer & Echo review of the new book, Victory Lap Retirement.