For a while now I’ve dithered over when to sell my portfolio of dividend stocks and implement my two-fund ETF solution. The tanking stock market didn’t help – particularly with oil and gas stocks plummeting and a few of my holdings underwater. Behaviourally, I badly wanted to wait until oil prices recovered so I didn’t have to sell those stocks at a loss.
But last Thursday I finally took the plunge and sold 24 dividend stocks, worth roughly $100,000, and immediately replaced them with two ETFs from Vanguard. I’m not going to lie; it was hard to sell my babies:
Finally did it. Sold all of my dividend stocks. Feels like a part of me died today.
As mentioned in the MoneySense version of the blog, one of the readers highlighted — Oakville-based David Davidson — also sent along a photograph of himself, which we’re running here (on the left).
What this all comes down to, and as I commented on Twitter after the original MoneySense blog was posted, is that “Retirement planning would be so much easier if we just knew the exact date of our death!”
Of course, few of us know that so there’s always going to be a tradeoff between planning for a long life that never materializes; and under-saving and living in the present, only to find yourself running out of money before you run out of life. Personally, I’d rather err on the side of the first possibility but as you can see below, some readers (including David shown above), make the case for the second possibility, or a balance between either extreme. Some on Twitter are in the same camp, including Ryan (@simplemoolah):
“LOL. Since we don’t — Don’t blow it all today. Live in the present & enjoy every moment but also plan for your future.”
When a person suffers an illness or injury, it may take some time to know how long it will last, and how long it will keep the person from earning an income.
Hopefully, the disability will last a short time. However, in many instances, the disability can last for a long period of time, perhaps for life. The consequences facing an individual will tend to vary with the length of time a person is disabled.
The consequences will also extend beyond financial concerns. While every everyone is different, and will react differently to events in life, there are some commonalties that tend to occur among people who experience a disability.
Recently I have been doing retirement assessments for several new customers. What amazed me as I spoke with them was how resigned to defeat the clients were. It was like they knew in their guts that they had started saving too little and too late to attain the retirement they wanted.
One answered my question on when do you want to retire by saying “around 120 is the only way I could.”
After the initial meetings I reflected on other circumstances from planning for customers in 2014 and noticed some commonalties.
Age range: 45-55
They own homes with attractive Fair Market Values
Had fairly decent equity positions in homes
Most would carry a mortgage into retirement
All had projected incomes at retirement far less than their desired outcome
Many Canadians, including these clients, have grown up with the belief that home ownership is an important goal. The home represents a significant part of their net worth.
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From the latest issue of MoneySense comes this list of 7 things you don’t know about Tax Free Savings Accounts. Note to any American readers: Canada’s TFSA is similar to Roth IRAs.
