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.

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…

Weathering the retirement storm

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Retirement crisis concept as a couple of adirondack chairs sinking in the ocean during a thunder storm as a metaphor for financial investment problems for retiring seniors who lost their savings or broken dreams symbol.By Sandy Cardy

Special to the Financial Independence Hub

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…

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!

Continue Reading…

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

Continue Reading…

Retired Money: The Joy of Pension Splitting

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Elderly couple in a meeting with an adviser discussing a document as she watches across the desk in her officeThe third instalment of my new bimonthly Retired Money column at MoneySense.ca has just been published online and focuses on the important topic of pension splitting, or pension income splitting.

You can read the whole piece by clicking on this highlighted headline: How to keep more benefits with pension income splitting.

As the piece observes, pension splitting can be manna from heaven for retired or even semi-retired couples where one is collecting a generous Defined Benefit or other employer pension and the other is not.

Nor is it as complicated a process as it may seem at first blush: you don’t have to actually divide such a pension and send some to each spouse: it all happens at tax-time when for tax purposes you choose what percentage of the pension each spouse should receive. Naturally there are multiple things to consider, such as other income sources, relative tax brackets and so on.

But the bottom line is that in many cases, it should result in thousands of extra after-tax dollars a year in the pockets of the couple as a unit. And that’s how couples should behave, isn’t it?

For more information about pension income splitting, a good place to start is the Canada Revenue Agency’s web site, and in particular this explanation. Note too that it includes a short video.