Once you achieve Financial Independence, you may choose to leave salaried employment but with decades of vibrant life ahead, it’s too soon to do nothing. The new stage of life between traditional employment and Full Retirement we call Victory Lap, or Victory Lap Retirement (also the title of a new book to be published in August 2016. You can pre-order now at VictoryLapRetirement.com). You may choose to start a business, go back to school or launch an Encore Act or Legacy Career. Perhaps you become a free agent, consultant, freelance writer or to change careers and re-enter the corporate world or government.
We mentioned this was coming in the FP early in June but it’s now official: the first batch of WisdomTree ETFs are now available in Canada.
While WisdomTree Canada opened its office earlier this year, the first six products started trading on the Toronto Stock Exchange Thursday (July 14).
The US parent company is best known for its dividend-weighted ETFs and currency-hedged equity strategies. The initial lineup is focused on the U.S., European and broad international equities. The Head of WisdomTree Canada is Raj Lala, pictured below.
Here’s what he said in a press release today:
Raj Lala
“By combining the best elements of active and passive investing, WisdomTree’s Smart Beta ETFs give Canadians the opportunity to participate in effective, risk-managed investments. We look forward to growing our business in Canada through a commitment to anticipating and addressing key investor needs.”
We all know that in the year you turn 71 you will have until December 31 to convert your RRSP into a RRIF or an annuity. Which do you choose?
First, let’s recap the basics.
RRIF option
The year after you set up your RRIF you will have to start withdrawing a mandatory minimum amount. At age 71 the minimum is 5.28% of your balance on January 1. That percentage increases as you get older. Of course, you can withdraw more than the minimum and there is no maximum withdrawal amount for a regular RRIF. For this comparison we’ll use the minimum amount.
You will continue to decide where to invest your RRIF assets and your investments will continue to grow on a tax-sheltered basis, but the amount you withdraw is taxed at your marginal tax rate.
On your death, the remaining assets are generally transferred to the surviving spouse, tax free, or goes to your estate and is taxed.
Annuity option
An annuity is a specialized financial product provided by an insurance company. In exchange for a lump sum investment from your RRSP you receive regular retirement income for the rest of your life.
Once you choose to purchase an annuity there is no access to your capital. You basically are giving it up for a guaranteed income that never decreases. It creates a personal pension plan for those without pension plans.
To 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…
Retirement is not just a destination; a time in the future. It’s also a journey; one that requires planning and nurturing along the way — not unlike your health.
While I’m not going to pretend saving money is easy, joining the ranks of those who have comfortable retirement savings may be a more realistic goal than you think. Achieving your savings goals requires a steady income, a commitment to saving, short-term sacrifices, and a smart investment strategy.
The climate
A 2013 study by the BMO Wealth Institute shows that Canadians – especially baby boomers — are falling short of their retirement income goals. Some 46 per cent of people asked expressed doubts about their ability to retire comfortably. (Source)
In the US, the outlook is equally bleak, according to the National Institute on Retirement Security (NIRS) report: The Retirement Savings Crisis: Is it Worse Than We Think? “The average working household has virtually no retirement savings. When all households are included— not just households with retirement accounts—the median retirement account balance is $3,000 for all working-age households and $12,000 for near-retirement households.” (Source) Continue Reading…
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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We mentioned this was coming in the FP early in June but it’s now official: the first batch of WisdomTree ETFs are now available in Canada.
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