Reviews

We review books that deal with everything from financial independence topics to politics, and anything in between. We may sometimes stray into films and music if there is a “Findependence” angle.

Beyond Annuities: Innovative Longevity Products for Retirees

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Below we canvas 11 retirement experts and financial planners in Canada and the United States about how they and their clients can use new Longevity insurance products above and beyond traditional life annuities.

These experts were gathered by Featured.com, which has been supplying Findependence Hub with quality content for several years. It recently changed its procedure so editors like myself can request input on particular topics we think will interest our readership. The sources are all on LinkedIn, as you can see by clicking on their profiles below.

Here’s what we asked for this instalment:

 “In addition to Annuities, what is one new Longevity product or fund that you believe in enough to recommend to clients approaching or already in Retirement? Examples in Canada are Purpose Longevity Fund and Guardian’s Longevity Funds. Are there similar new products in the U.S. (or Canada) of which  you are aware?”

Here is what these 11 thought leaders had to say:

LifeX ETF delivers transparent Longevity Income

In addition to traditional annuities, one of the emerging longevity products in the U.S. that I have come to recommend to clients approaching or already in retirement is the LifeX Longevity Income ETF, particularly the LFAI fund.

While it is not a classic insurance product, it is designed to provide predictable monthly distributions over a long horizon, effectively hedging against the risk of outliving one’s assets. The fund invests primarily in U.S. Treasuries and money-market instruments, and its structure is built around the concept of a target cohort’s 100th birthday, which allows for a systematic income stream without relying on a life insurance company guarantee.

For many clients, especially those who purchased assets during low-interest periods or are seeking reliable cash flow without tying up their entire portfolio in an annuity, this product offers a compelling complement to their existing retirement income strategy. What I find particularly valuable is the transparency it provides. Unlike certain annuities, clients can clearly see the underlying investments, understand how distributions are generated, and retain the flexibility to adjust allocations as their personal circumstances or market conditions evolve.

It also fits naturally into a broader retirement strategy where a portion of assets remains growth-oriented, some is allocated to defensive income-generating investments, and a dedicated longevity-income segment addresses the specific risk of living decades beyond retirement.

Of course, it is not without considerations; while the fund aims to provide stable income, it is sensitive to interest-rate changes, inflation, and the assumptions built into its cohort-based design. Clients need to assess the fit carefully, ensuring the time horizon and income targets align with their health, lifestyle, and other holdings. For those who understand these dynamics, however, it offers a sophisticated and innovative approach to longevity planning, bridging the gap between traditional annuities and fully self-managed income portfolios, and giving retirees confidence that they can sustain their lifestyle even as they live longer than expected.

Andrew Izrailo, Senior Corporate and Fiduciary Manager, Astra Trust

BlackRock LifePath Paycheck Fund Offers Flexibility

JP Moses, Tennessee

If you’re getting close to retirement, you might want to check out the BlackRock LifePath Paycheck fund. I’ve been following it. It works like those Canadian longevity funds, designed to give you regular monthly checks. The biggest risk is outliving your savings, and this fund has professionals handle the withdrawals so you don’t run out of money. It seems to offer more flexibility than a traditional annuity, which is worth a look.

JP Moses, President & Director of Content Awesomely, Awesomely

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Vanguard and Fidelity Deliver Stable Retirement Income

Evan Tunis, Florida

The Vanguard Target Retirement Income Fund is not an entirely new “longevity” product in the mold of Canada’s Purpose and Guardian funds, but it fulfills a similar role for retirees. It is intended to deliver a steady flow of income while protecting against the effects of inflation by investing in a diversified blend of stocks, bonds and cash. The Fidelity Strategic Advisers (r) Core Income Fund is also designed to provide income for retirees with a diversified approach. The two funds both provide some level of stability for those who want to keep a lid on risk and market vomit in retirement.

Evan Tunis, President, Florida Healthcare Insurance

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Modern LifeX ETFs balance Freedom and Income

Niclas Schlopsna, Germany

I’ve often been asked about newer longevity products beyond traditional annuities, especially by clients preparing for retirement who want flexibility without giving up stability. What I have observed while working with financially cautious founders and executives is that people want income structures that feel modern, transparent, and liquid, and one option in the U.S. that I genuinely find promising is the Stone Ridge LifeX Longevity Income ETFs. I first came across them while helping a client map out a long term retirement strategy, and what stood out was how these funds provide monthly distributions while still allowing investors to keep full liquidity. I remember reviewing the structure and appreciating how it focuses on Treasuries and a long horizon rather than tying someone into an insurance contract. It felt refreshing. many retirees dislike the idea of locking up money permanently, and this approach allowed them to protect their cash while still receiving consistent income. The experience reminded me of moments with founders who want efficiency without losing control, and pattern is similar

In my opinion, the biggest advantage of these longevity ETFs is the balance between predictability and freedom, since investors receive monthly payouts but can still adjust their strategy if life takes an unexpected turn. The main drawback is that there is no lifetime guarantee, so someone who ends up living much longer than expected might outlive the structure if they rely on it too heavily. I often explain that longevity planning still requires layering different tools rather than expecting one product to solve everything. Another point that came up during discussions with retirees is the sensitivity to interest rate changes, which can affect the value of the ETF itself, and it is important not to overlook that risk. Still, for clients who want something more adaptable than an annuity, this has become a strong option to consider. I also pay attention to emerging pooled longevity concepts, similar to modern tontine ideas, which share risk across participants and create higher payouts for those who live longer. Even though these structures are not mainstream in the U.S. yet, the logic is compelling for retirees who expect longer than average lifespans. Whenever I see innovation like this, I feel the same excitement I do when a founder shows us a new model at spectup because it signals that the industry is shifting toward more transparent, flexible solutions.

Niclas Schlopsna, Managing Partner, spectup

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LifeX ETFs offer flexible, predictable Retirement Income

Sovic Chakrabarti, Vancouver, BC

When I think about longevity-focused options beyond traditional annuities, one U.S. product I genuinely find compelling is the Stone Ridge LifeX Longevity Income ETFs. What draws me to LifeX is that it tries to solve the same problem that Canadian funds like Purpose Longevity and Guardian Longevity address — steady income over an unknown lifespan — but without locking someone into an irreversible insurance contract.

Instead of handing over capital permanently, retirees stay invested and receive structured monthly distributions, which feels more flexible and respectful of changing needs. I’ve always liked the idea of having income that mimics an annuity while still keeping the door open if health, family, or market circumstances shift.

I’ve come to see LifeX as especially appealing for clients who want predictable cash flow but aren’t comfortable giving up control of their assets. Because the funds are built largely on U.S. Treasuries, the income stream feels relatively stable, and the target-date structure helps align payouts with the later stages of retirement, when longevity risk becomes more real. The liquidity alone makes it feel like a meaningful evolution in retirement planning: it’s easier to sleep at night knowing the money isn’t trapped.

Of course, I’m also realistic about its limitations. There’s no lifetime guarantee the way a true annuity offers, and the income still depends on market and interest-rate dynamics. It’s not a perfect replacement for insurance-based products. But as a complement — or even a middle ground between full guarantees and full market exposure — it’s one of the few newer U.S. longevity products I’d feel confident putting on the table for someone approaching or entering retirement.

Sovic Chakrabarti, Director, Icy Tales

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Retired Money: Experts opine on various tweaks to Bengen’s famous 4% Rule

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William Bengen, creator of the famed “4% Rule.”

My latest MoneySense Retired Money column is titled The 4% rule, revisited: A more flexible approach to retirement income. Click on the hyperlink for full column.

It goes into more detail on William Bengen’s updated book about the 4% Rule, which was one of three recently published financial books we reviewed in the last Retired Money column.

For that column I had originally planned to focus exclusively on that book, A Richer Retirement, Supercharging the 4% Rule to Spend More and Enjoy More. However, I decided to review two other books at the same time; meanwhile I ended up on a related project on my own site, which involved asking more than a dozen financial advisors on both sides of the border what they think of the 4% Rule and the tweaks Bengen covers in his follow-up book. You can see all responses in this blog that appeared earlier this month on Findependence Hub, but at over 5,000 words  it was a tad long for the space normally assigned to the Retired Money column.

 For the MoneySense version, I focused on the most insightful comments and added a few thoughts of my own. The survey was conducted via Linked In and Featured.com, which has long supplied good content for my site.

Broader diversification spawns a 4.7% Rule

Trusts and estates expert Andrew Izrailo, Senior Corporate and Fiduciary Manager for Astra Trust, says Bengen’s original idea was to provide a sustainable income stream for at least 30 years without depleting your savings. In his new book, Bengen “revisits this concept using updated data and broader asset allocations,” summarizes Izrailo, “He now argues the safe withdrawal rate could rise to around 4.7%, supported by stronger market performance and portfolio diversification beyond the original stock-bond mix.”

For American investors, Izrailo still begins with 4% as a baseline because “it remains simple and conservative. Then I evaluate three major factors before adjusting: market volatility, portfolio performance, and expected longevity.” For Canadian retirees, “I tend to start lower, around 3.5%, due to differences in taxation, mandatory RRIF withdrawal rules, and the impact of currency and inflation differences compared to U.S. portfolios.”

Toronto-based wealth advisor Matthew Ardrey, of TriDelta Financial was not part of the original Featured roundup but agreed with the general view that while a helpful starting point, the 4 Rule is only a guideline. “When I meet with a client, I don’t rely on the 4% rule at all,” said Ardrey, who has worked with clients for more than 25 years “I’ve learned that rules of thumb — like the 4% rule — pale in comparison to the clarity and confidence that come from a well-crafted” and personalized financial plan.  Such a plan should reflect each person’s unique circumstances, priorities, and goals, allowing them to build the right decumulation strategy for their situation.

No one size fits all

Almost all the experts caution against taking a one-size-fits-all approach to the 4% Rule or its variants. Over 20 years with her own clients financial advisor and educator Winnie Sun, Executive Producer of ModernMom, starts with 4% as the baseline, then adjusts it based on actual client spending patterns and market conditions … The biggest mistake I see isn’t about the percentage itself: it’s that people forget about tax efficiency in withdrawal sequencing.”

Oakville, Ont.-based insurance broker James Inwood says the 4% rule is “a decent guideline, but it’s not some magic number you can set and forget. I’ve watched people get into trouble because they didn’t account for medical bills, which are a real wild card here in Canada. I always tell people to build in a cash buffer and check in on that withdrawal rate every couple of years instead of just locking it in permanently.” Continue Reading…

Book Review: The Wealthy Barber (2025 fully revised edition)

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Special to Financial Independence Hub

 

Many aspects of personal finance have changed in the 36 years since The Wealthy Barber classic book first appeared.

To update it, author David Chilton had to not only do an extensive rewrite, but he had to come up with new advice.  He did a great job of making The Wealthy Barber 2025 update fully relevant to Canadians today.

Chilton takes important topics that are usually dry and hard to understand and brings them alive in an entertaining story format. But this book is much more than just a fun take on personal finances; the advice is excellent.  Chilton gives insights you won’t find elsewhere.  The book is like a course on personal finance requiring no previous knowledge, and even discussions of insurance and wills are funny and compelling enough to be page-turners.

The bulk of the book is a set of financial lessons mainly aimed at Canadians between 20 and 45.  The early chapters introduce the characters, make it clear that the lessons require no prior expertise, and that the lessons really will help with seemingly impossible problems like the high cost of housing.  These early chapters do a good job of convincing readers that they really can improve their financial lives.

Between the jokes and identifying with the characters, readers will find themselves enjoying lessons that would normally be boring.  Chilton uses dialogue to emphasize important points, to voice objections to his advice, and to clarify common misunderstandings.

I often find things I disagree with in books, but that really isn’t the case here.  Chilton had to make some tough decisions about which details to include and which to leave out, and most readers could come up with a topic or nuance they wish was covered.  One topic I think could have made the cut is that some investors think they don’t pay investment fees.  I’ve heard people recommend their advisor because he doesn’t charge any fees.  All advisors get paid out of their clients’ money in one way or another, no matter what anyone says to the contrary.

I won’t try to summarize the lessons because the result wouldn’t be useful.  Without Chilton’s explanations of the whys behind his advice, too much would be lost.  Instead, I’ll comment on several areas.

Artificial Intelligence (AI)

Chilton didn’t really discuss AI except to make a good joke that I won’t spoil.  He was asked the question “What happens if AI takes away most of our jobs and the economic system collapses?”  There are some bad things AI could do such as cyber war, monitoring all of our actions, preventing us from doing “unapproved” things, and limiting our movements.  However, I don’t see negatives in AI doing jobs for us.  If AI together with machines will eventually grow our food, make clothes and other goods, and build houses, why will we need money?  Until we get to that point, we’ll still need money and people to do jobs.

Pay yourself first

One of the book’s characters says “Save first, spend the rest, good.  Spend first, save the rest, bad.”  This core piece of advice survived from the original book, but there are some caveats now.  For example, some diligent savers “offset the growing value of their assets on their net-worth statements with matching, or near matching, debts on the liability side.  From excessive car loans to large credit-card balances to massive lines of credit, many [live] beyond their means to a scary level.”

Watching other people, I’m convinced that it’s important to set aside savings from your pay first and then spend later, but my wife and I are weirdos who never needed to do this.  Our natural tendency to spend little usually left plenty of savings at the end of each pay period.  We’re the type who had to learn to spend more as our income and savings grew.

Index investing

I thought the passage explaining why we should just buy all stocks instead of trying to pick the best ones was well done.  It included “No, we can’t just buy the winners.  No, there is no way for us to consistently pick them ahead of time.  No, the people we hire to do it for us aren’t any good at it either.”

Like most experts who are trying to help their audiences, Chilton is a fan of all-in-one asset allocation ETFs.  “Not only does the fund buy the individual stocks for you, it does so across the world,” and “These funds also do all the rebalancing for you.”  These funds handle everything so there is no need to monitor your progress.  In fact, to avoid making emotional decisions, you’re best to “pay almost no attention” to the daily or weekly changes in the value of your savings.

“One of the most important factors, if not the most important, as you choose what type of investments to make, is the associated time frame.  How long are you able to set the money aside?  How long until you need it?”  Stocks in the form of all-in-one ETFs are for the long term.  For something like a house down payment, “unless I thought my purchase was at least five to seven years away,” I wouldn’t invest it aggressively.

Starting early

I’m a fan of advising people to start the saving habit early.  Chilton gives an example to motivate this advice where saving $1000 per month for 8 years is more valuable than saving $1000 per month for the subsequent 24 years.  Continue Reading…

3 books I just read that Retirees DIYing their pensions need to read

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Amazon.ca

My latest MoneySense Retired Money column looks at a must-read new book on Retirement as well as two related books on DIY stock-investing. You can read the full column by clicking on the highlighted headline: Who you gonna trust: Barry Ritholtz or Jim Cramer?

The must read and main focus of the MoneySense column is William Bengen’s A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More. If that sounds familiar it should: Bengen’s original book on the 4% Rule is considered the bible of retirement, with his famous “SAFEMAX” guideline of 4% a year being an annual amount of withdrawals that should be “safe” for retirees to continue for a full 30 years, even after inflation. The original book,  titled Conserving Client Portfolios During Retirement, was first published in 2006.

Never mind that even Bengen considers 4.7% be a more universal SAFEMAX. The original book was aimed at financial advisors and professionals while the new one ostensibly is aimed at retail investors and retirees. I say ostensibly because I was a little disappointed with it and found the plethora of complicated charts and tables a bit much for lay investors. Still, there’s a lot of common sense there: Inflation is big long-term threat to retirees as are bear markets. Withdrawing too much from portfolios can be disastrous if you are unfortunate enough to retire just as a bear market hits and/or inflation starts to bite.

On the other hand, sticking with the old 4% rule or even the smaller amounts of 3% or even 2% advocated by some cautious souls, could result in you withdrawing less than you really need to enjoy retirement, although the tax department and any heirs might commend your caution and frugality.

How to make money in any market

Amazon.ca

While it’s rare for me to buy new hardcover books because I receive so many “free” review copies of financial books, I actually did buy A Richer Retirement as soon as it was available on Amazon. Plus, unusually, I also bought two other brand new books on the related topic of investing and stock-picking.

One was Jim Cramer’s How to make money in any market, by the sometimes revered but often maligned host of  CNBC shows Mad Money and Squawk on the Street. It’s fashionable for some financial journalists who believe in efficient markets and indexing to diss Cramer but I am not in that crowd. In fact, Cramer recommends that newcomers to investing put the first US$10,000 into an S&P500 index fund or ETF.

However, for seasoned investors and even retirees, Cramer suggests putting half a portfolio in index funds and the other half in individual stocks. Where we part company is his recommendation that the bucket of stocks be restricted to just five names, which would mean 10% in each. For my money, that’s way too concentrated and risky, even though he often brags about how he is often accosted by Nvidia Millionaires who tell him they bought that stock as soon as he announced on air that he had renamed his dog Nvidia.

How NOT to invest

Amazon.ca

Finally, regulars to this site may already have read Michael Wiener’s review of Barry Ritholtz’s How NOT to invest, which appeared here in this blog a few weeks after appearing on his Michael James on Money blog.

To be sure, those who are fond of disparaging Jim Cramer might quip that should have been the title of his own book, seeing as there are actually ETFs out there that try to profit by shorting Cramer’s picks. As of this writing, my copy has arrived but I have not yet finished reading it, as it’s a bit longer than the other two.

But based on the book blurbs and Michael’s review, I have no doubt it will be worth reading, whether for younger investors or seasoned ones and/or retirees.

Finally, while I only just received my review copy, I note that David Chilton is publishing a new edition of his classic financial novel, The Wealthy Barber, which any young person just starting to invest should acquire.  I look forward to revisiting it.

 

 

 

How NOT to invest (Book Review)

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Amazon.ca

Special to Financial Independence Hub

 

Before reading Barry Ritholtz’s book How Not to Invest, I wondered if the “Not” in the title was a sign it would be filled with gimmicky ways of giving investment advice.

It isn’t.  Investing well is simple enough, but the world tries to push us towards many types of poor choices that lose us money.  The best advice is a list of the many things to avoid when investing.  This book gives readers the benefit of Ritholtz’s extensive experience with staying on the simple path to investing success.

The book is organized into four parts: Bad Ideas, Bad Numbers, Bad Behavior, and Good Advice.

Bad Ideas

Part of what makes it so easy to push investors toward bad ideas is that we believe secret ways to create wealth exist when, in fact, they don’t exist.  “We don’t like to admit it, but nobody knows anything about the future — not just you and me, but the so-called experts too.”

I’ve had the experience of getting people to agree that the future is unknown, and then they immediately ask what I think will happen with interest rates.  It’s hard to get people to really believe the future is unknown.  Ritholtz does an excellent job of going through some high-profile examples of the futility of forecasters.  Instead of searching for the right seer, he suggests having a “financial plan that is not dependent upon correctly guessing what will happen in the future.”  “Don’t predict what will happen, but rather, assess the range of possible outcomes — what could happen.”

So much of the information we see about investing is just noise.  Ian Cassel said “The maturation of every investor starts with absorbing almost everything and ends with filtering almost everything.”

It is freeing to admit we don’t know what will happen and to plan for a range of possible outcomes.  What too many people do is “Make predictions, then marry those forecasts.”  If they’re wrong, “This usually leads to catastrophic results.”

Bad Numbers

This part of the book starts with a good section on economic innumeracy that discusses denominator blindness, survivorship bias, mathematical models, and the fact that we respond better to anecdotes than data.

Part of what makes this book a pleasure to read is Ritholtz’s optimism.  Paul Volker once said “The only useful thing banks have invented in 20 years is the ATM,” but the author lists 20 useful financial innovations, including index funds, ETFs, low costs, fast trade clearing, and cash-sending apps.  The challenge for investors is to benefit from these innovations rather than lose money with them.

The author sees bull and bear markets as secular periods characterized by either high price-to-earnings (P/E) ratios or low P/E ratios.  I’m not sure how he thinks investors should use this information.  In my case, I use P/E levels to make modest formulaic adjustments to both my asset allocation and my expectations for future stock returns.

Sometimes people overestimate how much the news of the day will affect markets.  Some industries were devastated by Covid-19.  However, it turns out that these industries represent a small fraction of overall markets.  If in “mid-2020, the 30 most economically damaged industry categories were delisted, it would have shaved off just a few percentage points from the S&P 500.”

There is a winner-take-all tendency in many areas, including stocks.  “Just 1.3% of the public companies listed in the United States account for all the market gains during the last three decades.”  We can “find the best-performing stocks by buying them all” in an index fund.

“Simplicity beats complexity every time.  A portfolio of passive low-cost indexes should make up the core of your holdings.  If you want to do something more complicated, you need a compelling reason.”

Bad Behavior

“Bad behavior leads to bad investing outcomes.”  Ritholtz categorizes bad behaviour into ten areas, and he illustrates some of them in an amazing story about a billionaire family called the Belfers.  They lost money with Enron, Madoff, and then FTX!  “Has there ever been a greater, more unholy trifecta than this?”  Even billionaires make some terrible choices.

“If only we made better decisions, we would all be so much better off.”  If we could eliminate all investing mistakes for everyone, we might be better off on average, but there is a zero-sum aspect to investing mistakes.  Your loss is someone else’s gain.  The main overall benefit of eliminating all investing mistakes is that those employed exploiting such mistakes would move on to do something useful for society. Continue Reading…