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.

Reflections From The Early Days Of Spending In Retirement, Part 3 — Taxes! 

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Patricia Gass

By Patricia Gass, CPA

Special to the Financial Independence Hub

This week’s skill-testing question:

What’s The One Expense In Retirement That Most People Get The Least Satisfaction Out Of Spending?

Hint:

fireplaceI love a warm fire on a cold, snowy day. But that same fire, if not properly contained, can do  damage to anything in it’s way. Kind of like taxes.

Perhaps extreme to compare a roaring fire to taxes, but hear me out. Whatever goes into the fireplace (or to the government), you will never see (or spend) again.

Fortunately, much can be done with a little knowledge and planning. It’s useful to think of taxes as yet another, substantial retirement expense that needs to be managed.

Revisit/Understand Your Overall Financial Situation

At least 10 years before retirement, do some critical thinking about your finances.

Where will your retirement income and (cash flow) come from and when? What is the breakdown between “tax-paid” and “tax-deferred” money? Will your retirement cash flow be enough to meet your needs (or too much … a nice problem to have!)? How likely are you to receive an inheritance (or other money) that could push you into a higher tax bracket? Would it make sense to retire early and withdraw some funds sooner at a lower tax rate?

Know (And Plan For) Your Tax Rate Continue Reading…

Let’s give the word Retirement an early Retirement

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Here’s a piece I did recently for Money Magazine, entitled Let’s retire the word Retirement. For the convenience of one-stop shopping and archival purposes, I’ve also reproduced the piece below, with a few changes and links added since it was originally published in the current issue of the magazine.

By Jonathan Chevreau

This magazine, like its sister web site and its competitors, is devoted to the topic of money. That’s an obvious statement but stay with me.

We all need money to live, both in the present and the future. This basic fact has created the entire financial industry, dedicated to the notion of saving for a rainy day so we’ll have enough money both for today’s needs as well as tomorrow’s. And the week after, the year after that and so on, bringing us ultimately to the concept of Retirement.

Retirement is the greatest marketing bonanza ever conceived for the financial industry. If a mutual fund company, bank, insurance firm or ETF maker runs an ad, what is the major concept behind its marketing?

senior couple of old man and woman sitting on the beach watching
How Advertising portrays Retirement

Typically, it features a mature couple frolicking on a beach or golf course, care-free, active, smiling, still in love and doing nothing that resembles work.

I don’t know when work acquired such a bad reputation but I’d venture  to say that in Canada, this phenomenon started to gather steam when London Life popularized its Freedom 55 campaign. Continue Reading…

Life after Employment: what’s your Encore act?

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By Jonathan Chevreau

I’ve been reading several books on Encore Careers, second acts and the like. A few weeks ago, we reviewed Marc Freedman’s The Big Shift. Over a one-week break in Florida, I read Freedman’s earlier book, Encore, subtitled Finding Work That Matters In the Second Half of Life.

Last year, on our sister site, we also reviewed Stephen Pollan’s 2003 book on the same topic:  Second Acts.

All these books start with the premise that the baby boom generation may end up living a lot longer than they may have once imagined, which goes double for their own children and the generations coming after them.

Work that matters

If you believe that living to 100 is a distinct possibility rather than a one-in-a-thousand outlier event, then it follows that financial planning needs to take these extra years into account. Continue Reading…

At age 62, couple celebrating 25 years of Financial Independence

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Billy and Akaisha Kaderli

By Billy and Akaisha Kaderli,

Special to the Financial Independence Hub

At the age of 62, we are beginning our 25th year of financial independence. That is quite a feat!

From the beaches on Nevis, West Indies, to the shores of Phuket, Thailand we have travelled extensively through these decades, and what a ride it’s been!

Young and strong in those early years, we were willing and able to tackle just about anything. Now we tend to be a bit more cautious but we’re not letting up. We still climb into the backs of pickup trucks, ride the chicken buses and soak in volcanic hot pools. The time has passed quickly from when we were the youngest, grayless couple in a group of retirees, to now where we blend in with the retiree crowd.

Still, no one can take away the dance we danced and we are filled with gratitude for all the miles and smiles. Continue Reading…

Weekly wrap: a Financial Independence Index, Death by Golf, Big OAS and more

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silhouette of a man swingingIt seems our labours here at the Financial Independence Hub have not been totally in vain. At the Globe & Mail, Ian McGugan has introduced something he calls The Financial Independence Index, which he says was inspired by Scott Burns’ Financial Freedom Index. McGugan — who was the founding editor of MoneySense magazine — says his index is not about retirement readiness but about financial independence and estimates couples need $4.5 million to be truly findependent (of course he doesn’t use that term, yet). Ian, if you’re reading this, why not shorten it to the “Findex?,” a term coined by certified financial planner Fred Kirby in a little inside joke with me. You can find Fred’s coordinates at the Getting Help section here at the Hub.

Whether it’s Findependence, Retirement or Unretirement, an article in Inc. — Death by Golf — argues Retirement is a bankrupt industrial age idea anyway. The article introduces the term Conation, which it defines as “Committed Movement in a Purposeful Direction.”

At Retirement Redux, Sheryl Smolkin asks the intriguing question whether the government should expand OAS instead of CPP. Or go to the original article here. In the past, proposals to expand the Canada Pension Plan have been referred to as “Big CPP” so I guess we should refer to an expanded OAS program as “Big OAS.”  You heard the term first here at the Hub!

Do you own too many mutual funds? Hard to top the US$1.5 million spread among 35 mutual funds mentioned by Roger Wohlner in his blog at the Chicago Financial Planner. Continue Reading…