Victory Lap

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.

Should we change the word “retirement”?

Posted By Financial Independence Hub | September 12, 2015

By Marion Humphries

Special to the Financial Independence Hub

Let’s start by defining the word retirement. A quick online search reveals that the literal meaning of the word retirement is: to withdraw, retreat; the time at which one withdraws from the workforce.

By definition, the act of retiring has a very passive connotation. No wonder there is apprehension by some to enter into this phase of life. The word Retirement suggests inactivity, slowing down, isolation, loneliness, and withdrawal from society.

Perhaps we can gain a better understanding of why such a negative spin was placed on retirement by briefly examining its history. The concept of retirement was introduced in North America a little over 100 years ago when the industrial revolution was taking place.

It was thought that elderly workers would slow down production. Job opportunities were limited, and older workers were preventing younger workers, with families to support, from much needed employment. Paying elderly workers to stop working seemed like a good idea. Initially, the US government paid the matured workers to step aside and withdraw from the labour force.

Social Security, 1935

Eventually, in the United States, the Social Security Act was introduced in 1935, whereby workers would pay into the program throughout their employment and eventually fund their own retirement.

Business Owners Beware!

Posted By Financial Independence Hub | September 11, 2015

IRC Photo - Low Resolution — Ian Campbell

By Ian R. Campbell, Business Transition Simplified

Special to the Financial Independence Hub

I recently read a headline that said Business Owners Need To Be Very Afraid. The first line or two of the article paraded a litany of things that were unlikely to frighten a business owner’s dog, let alone a business owner.

However, while the article content was uninspiring the article title was “on the money.” The heading I have chosen for this post likewise wouldn’t frighten a business owner’s dog – but only because dogs can’t read.

If you are a business owner or an advisor to business owners here is a list, with brief reasons, of six things you need to keep front of mind and continually update your opinion on.

Government debt

Debt is higher than it has ever been in most developed and developing countries at the municipal, provincial/state and federal levels. Governments at root are no different than individuals, households or companies – unless of course you are an American who thinks the U.S. Federal Government can print new fiat currency forever without consequence.

Eventually, Peter can no longer rob Paul and debt needs to be repaid. How: by levying multiple forms of taxes on those who can pay. Businesses almost certainly will see both direct and indirect taxes at all levels increase in coming years. This is but one factor that will negatively impact business after-tax free cash flows – and in the end it is current and prospective “after-tax free cash flow” that is the most important business value metric.

Industry consolidation

Incorporated? Don’t overlook TFSAs & RRSPs if your time horizon is long enough

Posted By Financial Independence Hub | September 9, 2015

By Benjamin Felix, PWL Capital Inc.

Special to the Financial Independence Hub

When people have corporations it’s common for them to retain all earnings in excess of their living expenses inside of their corporations to avoid paying personal tax.

This seems logical. By leaving the money in the corporation there is more money to invest in the corporate investment account, and we know that about $50,000 of dividends can be taken out of a corporation nearly tax-free, making the idea of leaving everything in the corporation until it’s time to draw a conservative retirement income appear very attractive. This strategy may have also been motivated by the tax advantage that used to exist for taking a dividend-only income.

Shift to mix of salaries & dividends

How to Choose a Retirement Location

Posted By Financial Independence Hub | September 5, 2015

By Billy and Akaisha Kaderli

Special to the Financial Independence Hub

So you and your spouse have decided to retire. At some point in your retirement planning you must ask yourself where you would like to spend your Golden Years. The following questions and insights should place you on the right path for finding just the location that suits your needs.

First things first

The first question you must ask yourselves is whether you want to stay in the home in which you are currently living or would like to move elsewhere. Retirement is a big step and sometimes people feel more secure staying in familiar surroundings because it makes the transition to your new lifestyle smoother.

Others, for financial reasons, a change of pace, health reasons, or for better weather, want to relocate. In this case, the next decision you must make is whether you want to stay in your home country or move overseas.

If you want to stay in your home country you must then decide what sort of climate is most attractive to you. Do you want to experience the four seasons or have a more moderate, year-round climate? Do you like mountains or beaches? What size of city or town do you most enjoy? These questions are important because they will automatically exclude places you won’t need to research. Knowing what you prefer in climate, city size and geographical configuration carries much weight in terms of your happiness quotient.

Another thing to consider is that if you choose a town or small city, are there adequate medical facilities nearby? Larger cities tend to have a full range of medical care. Smaller towns generally have clinics and a variety of doctor’s offices, but perhaps not the equipment needed for complex medical situations.

Narrowing your search

Retirement – Heaven or Hell?

Posted By Michael Drak | August 22, 2015

by Michael Drak

Special to the Financial Independence Hub

Recently, while reading an article relating to the risks of boredom in retirement, I was reminded of a TV show that I had seen more than 40 years ago. I’m always amazed at how something can trigger a memory and we can recall it with such clarity as if we just viewed it yesterday.

The show was a Twilight Zone segment entitled “A Nice Place to Visit.” In it, the main character is Rocky Valentine, a small time thief who is shot during a robbery and passes out. He wakes up and at some point he realizes that he’s in fact dead, but by some mistake he’s in heaven and has been assigned a guardian angel by the name of Mr Pip.

Life for Rocky is great for a while as all his wishes are catered to: there are beautiful women, an expensive penthouse, fancy clothes and all the money he desires. In fact every time he goes to the casino, no matter what game he plays he wins: he can’t lose. But eventually Rocky gets bored of the predictability of his life, the excitement is gone and with that all of the fun.

Finally Rocky pleads with Mr Pip to send him to the other place where he belongs and that he doesn’t deserve to be in heaven. At this point Mr Pip’s says “Whatever gave you the idea that you were in heaven? This is the other place!”

I love the punch line and the lesson here is that Rocky goes crazy because there are no challenges in his life, there is no effort required and there’s nothing to hope for because it all exists as soon as he wants it.

The boredom of endless leisure

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