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.

Is CPP expansion based on myths or facts?

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Keith Ambachtsheer Head_Shoulders2_Jan 2016
Keith Ambachtsheer, photo courtesy KPA Advisory Services

By Keith Ambachtsheer

Special to the Financial Independence Hub

“The case for CPP expansion is weak and built on flawed arguments not supported by the facts.” — The Fraser Institute

Five Myths about the CPP

There must be something in the Vancouver air. Reacting to the recent Federal-Provincial agreement to expand the Canada Pension Plan (CPP), our friends at the Fraser Institute have launched another CPP-bashing barrage. It appeared in a June 20 Vancouver Province article under the title “Case for expanding the CPP based on myths – not facts.”

The article explains that there are five CPP myths masquerading as facts. If people only understood that these five things were myths rather than facts  … the plan to expand the CPP would surely be quickly be aborted.

Here are the five purported myths:

  1. Canadians are not saving enough for retirement
  2. Higher CPP contributions will increase overall retirement savings
  3. The CPP is a low-cost pension plan
  4. The CPP produces excellent returns for individual contributors
  5. Expanding the CPP will help financially vulnerable seniors

However, when the five myths are placed in their proper factual context, it is the Fraser Institute’s arguments that turn out to be flawed.

The Two ‘Savings’ Myths

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Happy (Financial) Independence Day!

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Depositphotos_8101987_s-2015To all our American readers, the Findependence Hub wishes a happy  Independence Day, or  as we like to say around here, Findependence Day.

Bloggers are fond of building posts around the July 4th celebration, and several are using the phrase Financial Independence Day. For instance, a year ago Forbes.com published a blog titled Financial Independence Day for Millennials.

In fact, on June 21st, 2016, Richard Eisenberg of Next Avenue and Forbes.com did just that, re-running a similar piece entitled How to Declare Your Financial Independence. And he did make an explicit reference to Findependence Day, more on which below.

This weekend’s Motley Fool Money podcast, as it was a year ago, is titled Declare Your Financial Independence. It features interviews with authors and radio personalities Dave Ramsey and Clark Howard. Continue Reading…

How the Age of Longevity will change your life and mine

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100 Plus by Sonia Arrison (SingularityHub.com)

One of dozens of books I read for a  talk I gave on how Longevity Changes Everything is entitled 100 Plus: How the Coming Age of Longevity will Change Everything, from Careers and Relationships to Family and Faith.

The author, Sonia Arrison, challenges the reader to at least open one’s mind to the possibility of human beings reaching the age of 150, which of course is a good 30 years longer than the age reached by modern centenarians, although still much less than the biblical Methusalah, Noah et al.

Certainly, as I was reading at the same time Moshe Milevsky’s new second edition of Pensionize Your Nest Egg, I was conscious of the financial implications of breakthroughs in human longevity. Milevsky’s preferred form of “Longevity Insurance” is life annuities and new hybrid variations of Variable Annuities that provide both stock market exposure and some guarantees and mortality credits provided by insurance companies.

Financial implications of Longevity

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Victory Lap Retirement: A Retirement book about NOT (fully) retiring

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Victory_Lap_Retirement_Front_Cover The fun now begins because Jonathan and I finally get to enjoy the fruits of our labours. The book Victory Lap Retirement has been written, the website and blog has come to life and our first pre-orders are starting to trickle in.

But there is much work to be done to accomplish our goal of building the VLR tribe and helping as many people as possible start their own version of a VLR lifestyle. Great things take time but the results are well worth it once you get there!

Everyone needs a reason to get out of bed in the morning

During your primary career, when you worked for money to ensure security for your family, you had a good reason to get out of bed each morning. But in VLR now that you have achieved Financial Independence (FI) and left your primary career you will need to find another good reason and we believe that some combination of work/leisure will satisfy that need for you. If it is work for pay even better!

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Will an expanded CPP speed your Findependence Day?

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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 FindependenceDay.com, 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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