Most of your investing life you and your adviser (if you have one) are focused on wealth accumulation. But, we tend to forget, eventually the whole idea of this long process of delayed gratification is to actually spend this money! That’s decumulation as opposed to wealth accumulation. This stage may also involve downsizing from larger homes to smaller ones or condos, moving to the country or otherwise simplifying your life and jettisoning possessions that may tie you down.
While taking a break from the sun and surf, relaxing in my hotel room in a tiny beach town on Mexico’s rugged Pacific Coast, my cell phone rang.
“Howdy, Beautiful!” my friend of four decades shouted from snow country, thousands of miles away. “Been watchin’ your website for years and I read all your stories. Love ‘em. But I thought you were retired!”
How many times over the twenty-plus years since we left the conventional work force have we heard that challenge? Our responses have ranged from surprised silence to justification of our volunteer work, to just laughing out loud.
We run a popular website, photograph our travels and share our lifestyle adventures with people like you. Some think that by doing this, we have somehow become unfit to call ourselves “retired.”
Once findependent, you’re free to choose how to spend your time
Today I would like to pose this question to you: “Once you leave the mainstream labor-for-paycheck world and become financially independent, aren’t you free to choose what you do with your time? When is something considered work, and when are you pursuing a passion?” Continue Reading…
Billly and Akaisha Kaderli, RetireEarlyLifestyle.com
By Billy and Akaisha Kaderli
Special to the Financial Independence Hub
All your ducks are in a row. You have saved and carefully invested for years, and the personal discipline is about to pay off.
So why is there apprehension in the bottom of your belly? Let’s be honest. There is risk involved, and the future no longer seems certain or familiar.
“What if I forgot about something?,” you think, and start going over every plan you have made.
No one likes to admit straight out that they are afraid of retirement. Why, that sounds silly! But changing your life from one of being focused on work duties, raising a family, paying bills, and receiving that dependable paycheck every week to one of the virtually unknown has its own set of stresses. You’re being dishonest if you say it’s not a big leap mentally, emotionally, or financially.
Sometimes you have to take a leap of faith
Lack of confidence often underlies questions disguised as logistics on how to retire. Sometimes, one must simply take the leap of faith, making a companion of the ever-present question “What if?”
If you have spent your whole life building security and providing that same security the best you could for your family, then stepping into the unknown world of retirement is like jumping off a cliff. Even if you’re as prepared as you think you are.
Sure, we can distract ourselves with dreams of endless golf, or margaritas on an exotic beach somewhere, but when it’s quiet, we find ourselves looking over our shoulders, wondering whether some forgotten component is lurking just out of sight.
“What if I run out of money?.” you whisper to yourself.
Perhaps your personal fear mongering nemesis is health care in retirement, your portfolio balance or even something as simple as boredom. There can be great comfort gained from all of one’s time being planned out months in advance.
To expect retirement to be free of hitches or snags is unreasonable. There are no guarantees in life. None of us knows what the future will bring, and this is true whether you’re working or retired.
In our experience, how to contend with the fear factor in all its guises is an important point worth addressing. Fear keeps us on the defensive, often preventing us from taking positive action or noticing opportunities and the support that surrounds us. Let it be said that if you are afraid, it is more difficult on all fronts to have a successful retirement.
“What if … ?”
The “What If” syndrome is all-pervasive. It attaches itself to every aspect of your life. However, living life through the eyes of fear only amplifies that uncertainty. If you wait for that perfect time to do something, you may discover that it never arrives. Looking back over your life, you might see all of the missed opportunities for great adventures and memory-making that you set aside in your pursuit of that ever-elusive feeling of security.
So what do you do? Fear never leaves us, but the fortifying of our confidence helps us to cope. Find ways to transfer your talents and abilities to your new life. If you must, make a list of your strongest traits. Enumerate your interests and the ways you can best satisfy them.
Check out the phone book, the local library, or your weekly event newspaper for groups to join, ongoing education classes being given, or chances to volunteer somewhere that lets you offer your expertise in something. Exercise. Stay connected to society. Try something new. Following these suggestions will bring strength to your new life, expand your mind, and build up your spirit. From here, you will gain much-needed self-assurance, making it easier to surmount any obstacles you may encounter in your retirement.
Imagine celebrating at your retirement party without a clue as to how much you can expect to receive in pension income. It sounds incredible, but many people who will end their career in a few years are in just that situation.
When you work for an employer you receive your salary, but once retired your income can come from multiple sources. You need to know how much you will receive from these sources.
Since CPP is one of the cornerstones of retirement income, this is where I will begin.
A brief history of the CPP
The Canada Pension Plan (CPP) is a national public plan that covers people in all provinces except Quebec. It was created in 1966 by the government under Lester B. Pearson. Quebec wanted its pension monies to be under their control and so became the only province with its own program.
When CPP was created the contribution rate was 1.8% of pensionable earnings, to be shared by employers and employees; self-employed persons were on the hook for the full amount. The first deductions were so minuscule that they were unsustainable to fund the retirement costs of the baby boom generation that was just beginning their working years. Also, life expectancies were starting to increase substantially. Continue Reading…
Because the Financial Independence Hub was moved Monday to a new server to accommodate ever-rising volumes of web traffic, we took the liberty of posting the normal Monday “Hub” blog at sister site FindependenceDay.com. The guest blog below is on optimizing CPP benefits: the same subject as my Financial Post column that ran online Monday under the headline: Optimizing Your CPP is no trivial exercise. Now let’s get it from the horse’s mouth: Doug Dahmer. — Jonathan Chevreau
By Doug Dahmer, Emeritus Retirement Income Specialists
Special to the Financial Independence Hub
Canadians are an easy going and trusting people. Every year thousands of people, across the country, carelessly start their CPP payments and in the process forego hundreds of thousands of dollars in payments to which they are entitled.
I call this “The Great Canadian Pass Up.”
To ensure you fully appreciate the value of making the right decision, before you elect to a start your Canada Pension, Emeritus Retirement Income Specialists has created a powerful tool called the CPP Optimizer. Give it a try at: www.cppoptimizer.com.
Most people seriously underestimate their lifetime CPP income entitlement:
Your CPP benefits are a big deal. For a couple, where both spouses have regularly contributed to the CPP plan, the lifetime CPP income they can anticipate will likely exceed $700,000. Consequently it represents an important strategic contributor to the creation of a sustainable retirement income. Therefore, decisions about this benefit need to be taken seriously.
Reliance upon “conventional wisdom” can be very costly
The Great Recession of 2008 had many consequences, but in the world of pensions, it truly highlighted the chasm separating private-sector from public-sector retirement plans.
The “Great Divide” boils down to this: civil servants have back-stopped, defined benefit pension plans that will provide a comfortable level of pension benefits in retirement, whereas the tax payers responsible to fund such great plans are largely relegated to RRSPs with much lower contribution limits and a limited ability to weather financially volatile markets.
For most, this state of affairs is immutable and lamentable. For those who have made pensions their passion or profession, there are solutions. The difficulty is to make them accessible to the majority, who happens to be the marketplace. What are some of these solutions that put the private and public sectors on an even keel?
Posted By 
