Diversifying your portfolio is a cornerstone of smart investing, reducing risk and potentially enhancing returns. While the Canadian market offers diversification by sector, it represents only about 3% of the world’s capital market. 1
This means that Canadian investors are missing out on a staggering 97% of global investment opportunities. However, the hurdles of currency conversion, foreign exchange costs and currency risk often deter Canadian investors from going global. Enter CDRs, a revolutionary tool that bridges this gap.
What exactly are CDRs?
Canadian Depositary Receipts (CDRs) are financial instruments that represent beneficial ownership in shares of foreign companies but are traded in Canadian dollars on Cboe, a Canadian stock exchange. This innovation simplifies global investing for Canadians, eliminating the need to navigate foreign exchanges and manage currency fluctuations.
Comparing CDRs to traditional Stocks and American Depositary Receipts (ADRs)
While traditional stocks directly represent ownership in companies, CDRs offer a streamlined approach to investing in international firms. Unlike ADRs that trade in U.S. dollars, CDRs cater specifically to Canadians, providing similar exposure to global markets without the complexities of trading at foreign exchanges and in foreign currencies.
A quick look at CDR History
The concept of depositary receipts traces back nearly a century, with ADRs emerging in the 1920s. By 2023, major banks listed over 2400 ADRs in the U.S. market. Canada joined the depositary receipt market in 2021 with offerings focused on U.S.-based companies. In 2025, Bank of Montreal (BMO) introduced its own CDR program, expanding access to global giants from Japan, Germany, Switzerland, Denmark, and the Netherlands.
Benefits of CDRs Explained
Global Access: CDRs open doors to international investment opportunities, broadening investment horizons for Canadian investors.
Currency Risk Management: CDRs mitigate the impact of foreign currency fluctuations on returns through a notional currency hedge.
Fractional Shares: With a starting price of around CAD $10, investors can afford fractional exposure to shares of otherwise expensive global companies.
Diversification: CDRs enable effortless geographic diversification, reducing reliance on any single market.
Understanding CDR Features
Currency Efficiency: CDRs allow Canadians to get exposure to global stocks in Canadian dollars, eliminating currency conversion costs.
Currency Hedge: CDRs minimize the impact of currency fluctuations while reflecting the performance of the underlying foreign company.
Fractional Exposure: Affordable entry-point to high-priced stocks as CDRs are generally issued at a price lower than the underlying share effectively providing Canadians with fractional exposure to listed stocks of large global companies.
Dividends: Investors will be entitled to any distributions paid on the underlying shares in Canadian dollars proportional to the number of underlying shares to which they are entitled. Taxes on distributions may be withheld by the CDR underlying company’s local or national tax authority. Whether distributions, such as dividends, are subject to foreign withholding tax in the same manner as if the underlying share were directly held by the investor will vary by jurisdiction Since the dividends are paid in Canadian dollars, investors do not have to subsequently go through the process of any currency conversion.
Market Accessibility: CDRs trade seamlessly on a Canadian exchange, ensuring ease of buying and selling.
How do CDRs work in practice?
Each series of CDRs provides economic exposure corresponding to a number of underlying shares. The specific number of shares that each series of CDRs represents is called the CDR ratio. For example, if the CDR ratio for a particular series is 0.50, this means that such series of CDR represent 0.50, or half, of a company share, so an investor would need to purchase 2 CDRs of the series to obtain the economic exposure corresponding to 1 underlying share. The CDR ratio for each series of CDRs is adjusted daily to provide the notional currency hedge as the foreign currency increases/decreases in value to the Canadian dollar. Continue Reading…
There is a basic principle that most people follow when it comes to their spending decisions. In essence, people generally try to either
(1) Get the most they can for the least amount of money, or
(2) Spend the least amount of money on the things they want (i.e. get the best deal)
In other words, rational utility maximizers try to be as efficient as possible when parting with their hard-earned dollars.
Strangely, many investors abandon this principle when it comes to their portfolios. With investing, what you get is return (hopefully more than less), and what you pay (other than fees) is risk. People often focus on return without any regard for the amount of risk they are taking. Alternately, many make the mistake of reducing risk at any cost, regardless of the magnitude of potential returns they leave on the table.
The foundation of successful investing necessitates achieving an optimal balance between return and risk. Different types of assets (volatile speculative stocks, stable dividend paying stocks, bonds, etc.) have very different risk and return characteristics. Relatedly, a portfolio’s level of exposure to different asset classes is the primary determinant of its risk and return profile, including how efficient the balance is between the two.
Offense, Defense, & Bobby Knight
Robert Montgomery “Bobby” Knight was an American men’s college basketball coach. Nicknamed “the General,”h e won 902 NCAA Division I men’s basketball games, a record at the time of his retirement. He is quoted as saying:
“As coaches we talk about two things: offense and defense. There is a third phase we neglect, which is more important. It’s conversion from offense to defense and defense to offense.”
Nobody can escape the fact that you can’t have your cake and eat it too. You can’t increase potential returns without taking greater risk. Similarly, you can’t reduce the possibility of losses without reducing the potential for returns.
Picking up Pennies in Front of a Steamroller vs. Shooting Fish in a Barrel
Notwithstanding this unfortunate tradeoff, there are times when investors should focus heavily on return on capital (i.e. being more aggressive), times when they should be more concerned with return of capital (i.e. being more defensive), and all points in between.
Sometimes, there is significantly more downside than upside from taking risk. Although it is still possible to reap decent returns in such environments, the odds aren’t in your favour. Reaching further out on the risk curve in such regimes is akin to picking up pennies in front of a steamroller: the potential rewards are small relative to the possible consequences. At the other end of the spectrum, there are environments in which the probability of gains dwarfs the probability of losses. Although there is a relatively small chance that you could lose money in such circumstances, the wind is clearly at your back. At these junctures, dialing up your risk exposure is akin to shooting fish in a barrel – the likelihood of success is high while the risk of an adverse event is small.
John F. Kennedy & the Chameleonic Nature of Markets
Former President John F. Kennedy asserted that “The one unchangeable certainty is that nothing is certain or unchangeable.” With regard to markets, the risk and return profiles of different asset classes are not stagnant. Rather, they change over time depending on a variety of factors, including interest rates, economic growth, inflation, valuations, etc.
Given this dynamic, it follows that determining your optimal asset mix is not a “one and done” treatise, but rather a dynamic process that takes into account changing conditions. Yesterday’s optimal portfolio may not look like today’s, which in turn may be significantly different than the one of the future.
It’s not just the risk vs. return profile of any given asset class that should inform its weight with portfolios, but also how it compares with those for other asset classes. As such, investors should use changing risk/return profiles among asset classes to “tilt” their portfolios, increasing the weights of certain types of investments while decreasing others.
In “normal” times, the expected return from stocks exceeds the yields offered by cash and high-grade bonds by roughly 3% per annum. However, this difference can expand or contract depending on economic conditions and relative valuations among asset classes.
In the decade plus era following the global financial crisis, not only did rates remain at historically low levels, but the prospective returns on equities were abnormally high given the positive impact that low rates have on spending, earnings growth, and multiples. Against this backdrop, the prospective returns from stocks far exceeded yields on safe harbour investments. Under these conditions, it is no surprise that investors who had outsized exposure to stocks vs. bonds were handsomely rewarded.
Expected Return on Stocks vs. Yield on High Grade Bonds: Post GFC Era
As things currently stand, the picture is markedly different. Following the most significant rate-hiking cycle in decades, bonds are once again “back in the game.” Moreover, lofty equity market valuations (at least in the U.S.) suggest that the S&P 500 Index will deliver below-average returns over the next several years. Continue Reading…
In his 2024 re-election campaign, U.S. President Donald Trump vowed to pursue an aggressive trade policy that aimed to reduce or altogether eliminate what he viewed as unacceptable deficits between adversaries and allies alike. Following his January inauguration, President Trump has put Canada and Mexico into his crosshairs. Tariffs continue to be one of his favourite tools, if his rhetoric is any indication.
A tariff is a tax that is imposed by a country on the goods imported from another country. It is typically collected by a country’s customs authority. Some economists have argued that this results in a larger burden being paid by consumers, as companies will pass on tariff costs to the consumer.
In this piece, we will look at how ongoing trade tensions could impact world economies and markets. After that, we will zero in on ETFs that can potentially provide protection against the current bout of volatility.
Trade policy volatility and Canada
Last month, we looked at the impact the new GOP administration could have on the industrials space. That piece explored the trade policy volatility that existed in the first Trump administration.
Baker, Bloom & Davis
US Categorical Economic Policy Uncertainty Index – Trade Policy
Source: Baker, Bloom & Davis. Bloomberg, Harvest ETFs, as of January 21, 2025.
On Monday, February 3, 2025, U.S. and global markets suffered sharp pullbacks in the morning hours. However, markets recovered after the Trump administration announced that tariffs on Mexico and Canada would be delayed for 30 days.
Canada finds itself at a crossroads as it contends with unprecedented pressure from a long-time ally, political uncertainty on the domestic front, and muted and decelerating economic data. The Bank of Canada must weigh these pressures as it determines how much it can slash interest rates to bolster economic activity..
That aside, Canada is home to many great companies with oligopolistic qualities. We detailed their strengths in a piece in October 2024. The Harvest Canadian Equity Leaders Income ETF (HLIF:TSX) invests in 30 of Canada’s most powerful and largest companies for their traits and growth potential. It overlays an active covered call strategy, which seeks to generate high monthly cash distributions.
Combat trade volatility with defence and diversification
Defensive sectors contain businesses that are stable, possess key barriers to entry, and are relatively immune to economic fluctuations.
Healthcare falls in this defensive category and is unique in its diversity. It includes companies that manufacture medical devices and equipment, as well as those that are involved in the making of diagnostic tools and lab equipment, companies involved in the ownership of doctors’ networks, as well as facilities and companies in the Managed Care segment.
The Harvest Healthcare Leaders Income ETF (HHL:TSX) is an equally weighted portfolio of 20 large-cap global healthcare companies. HHL aims to generate an attractive monthly distribution through an active covered call writing strategy. This ETF has paid out over $500 million in total monthly distributions to unit holders since its inception.
Utilities is a space that is often targeted by investors who are looking to shore up a defensive position in their portfolios. Companies in the utilities space possess enormous scale, significant barriers to entry, and dominance in their respective markets. The Harvest Equal Weight Global Utilities ETF (HUTL:TSX) offers access to a globally diversified portfolio of utilities equities. That global diversification offers benefits like reducing interest rate and natural disaster risk with exposure to different countries and regions. Continue Reading…
The following is an edited transcript of the podcast Two Way Traffic hosted by financial advisor Darren Coleman with his two guests: tax lawyer Trevor Parry and Kim Moody of Moodys Private Client which provides law, and cross-border tax and accounting services. Trevor Parry once told Stephen Harper that Canada has more auditors than infantry. Not to be outdone, Kim Moody says in the eyes of the Canada Revenue Agency a cocaine dealer can deduct expenses in this country, but not an Air bnb operator.
Click below for full link (interview conducted early January):
I’m joined today by Kim Moody of Moodys Private Client in Calgary, Alberta, and tax lawyer Trevor Perry, who is based in Ancaster. They are two of Canada’s most prolific tax fighters. We’re going to discuss where are we right now in terms of tax policy and what should Canadian investors be thinking about. Also, we have a new government in the United States.
Why don’t we begin with a little bit of kind of where are we right now? We just had the fall economic statement that was not delivered by your Finance Minister. But they came in at more than 50% higher than the fiscal guardrail that they set for themselves. So this is an astonishing amount of capital that they’ve spent, and not even remotely close to where they said they were going to be. Even $40 billion was a big number. So now that it’s 60 and there’s really no one to stand there and take accountability for it, and we had the Finance Minister resign just hours before she delivered that statement. So I’d want to focus on where does that leave taxpayers right now because there are a number of items. I’ll focus on the capital gains inclusion rate change as probably the most significant one. Where are we now? Is that going to go through? Not going to go through? What should investors be doing? What should taxpayers be doing with the state of change that we have in Ottawa?
Kim Moody
To your question on capital gains, where are we today? This is certainly one of the most unusual times in my career where we had proposed tax legislation that looks like it’s not going to get through. Trevor and I have been around a long time, and seen lots of tax legislation not get through. If I was a betting man, I’d say probably about 98% certainty that it’s not going to go through. And I’ve written about that in my Financial Post articles. So Trevor, do you know of any other, you know, broad based piece of legislation?
Trevor Perry
There was a lot of tumult when income trusts were attacked and all that kind of stuff. But the panic that was engineered this year to create some kind of revenue event because of forced selling, and it’s going to die because they prorogued Parliament. No, I’ve never seen anything like this before, and it’s just part and parcel of the worst in the history of this country, the worst tax policy from day one going on.
Darren Coleman
It’s really a quandary for investors and taxpayers, because the general rule has been, if I’m correct, that even though the legislation may not be enacted, one has to act as if it was going to pass, right? But as you guys have said, it’s very likely this will not pass. Should people, as they go into the tax year, be assuming that the new capital gains inclusion rate applies and act accordingly? Or should they act as if no, a betting man says it’s not going to happen, so I should just keep the old rates. What should you do?
Kim Moody
The CRA has a long-standing policy of encouraging taxpayers to act on proposed legislation. I think there’s a good reason for that, and I support them on that because 98% if not higher of tax legislation and proposed tax legislation gets passed even with retroactive applicability, which is very common in tax law. There were some recent statements attributed to the CRA saying they’re going to continue to administer the capital gains stuff on the basis that it’s law, even if an election is called. This stuff is not going to get passed if an election is called, and therefore you’re going to continue to administer it. Well, I can tell you, in my client base, I’m giving the exact opposite advice because I think there is a 98% chance this thing is not going through. So if you want to amend your tax returns for the two-thirds inclusion rate, go right ahead, but you’re going to do it without my blessing because I think it’s wrong, and you’re going to fight to get that money back. It’ll take a long time. So that that’s my approach.
Darren Coleman
How easy is it to fight to get your money back? Is that pretty standard? Like, no, don’t worry, they’ll refund it within five business days, or is it a big argument?
Kim Moody
No, it’s not usually a fight, per se, although there’s always exceptions to that, but it’s a matter of timing. You know when you amend your tax return? Number one, Have you filed your tax return? If so, then do you have the ability to amend it? Which, in most cases, you do, and then how long is it going to take for them to process it? Those are usually the pillars, and it’s that last one that takes a long time,
Trevor Perry
It’s part and parcel of a tax administration system that needs a complete overhaul. Given that they know everything you’re doing already we need some basic respect for the taxpayer, which is something we don’t have. I remember telling our last Prime Minister that there were more auditors in Canada than Canada has infantry. That’s the nature of the beast right now.
Kim Moody
And that’s increased by a lot. I think 29,000 CRA employees. So I think it’s almost 60,000 if I’m not mistaken.
Trevor Perry
And we have about 12,000 infantry, of which we cannot deploy them all at the same time.
Darren Coleman
Let’s go back over that greatest hits of outstanding tax policy that we’ve seen over the last year. Kim, you actually wrote about that in the Financial Post recently (late January). We’ve had the flipping tax. We’ve had the changes to AMT. We’ve had the unused, underused housing tax. We just had the move the date of which you can make a charitable contribution, because we had the postal strike.
Kim Moody
Kim Moody
Trevor knows I’m certainly no fan of the capital gains one, which I had ranked number one in the article as the worst policy. But number two is the prohibition of deductions on certain short-term rental owners. So if you happen to be an evil owner and operator of an Airbnb that operates in a jurisdiction that prohibits that, you’re denied all your expense deductions. A complete prohibition of deductions. So let’s pretend Trevor is a cocaine dealer. He’s out selling snow, but I’m just a lowly Airbnb operator. So Trevor makes 10 grand selling snow. But he’s got a bunch of people running around for him. He’s got burner cell phones. He’s got cost of his inventory, etc. So he makes net 2000 bucks, and he comes to me and says, Hey, Kim, I know I’m doing something illegal here. I’m selling drugs, but I don’t want to be a criminal twice. I want to make sure I file my tax returns because I don’t want to be a tax evader. So can you file my tax returns for me? So we go ahead and I file the tax returns. Do you think I’m claiming his deductions? His $8,000 of deductions? Sure, yeah. And there’s nothing in the Income Tax Act that prohibits that. But now I file the tax returns from my evil Airbnb operation that I’m operating illegally in a jurisdiction because I need to pay some bills, and I have the same $8,000 of expenses. Nope, I can’t deduct those, so I’m paying tax on $10,000. Now from a public-policy perspective, what does that say to the average Canadian? It tells me that the drug dealer in this fictional world, Trevor, is better off and should be treated better from a tax perspective, than me, the lowly Airbnb. That’s ridiculous policy. It’s dangerous policy, and it’s something that needs to go immediately.
Trevor Perry
For me as a lawyer and as a political junkie, I think our 1982 constitutional exercise needs to be reopened. Until we enshrine property rights in the Constitution, I believe, as a fundamental conservative that we do have property rights. Tax policy is horrible. But in terms of tax practice, having done lots of work for professional athletes, CRA running at baseball players and …
Darren Coleman
… The John Tavares situation.
Trevor Perry
If Tavares loses that you’re going to start seeing Canadian teams fold up and move again. It’s just absolutely stupid. And again, it goes to the whole issue of, why are we taxing people into oblivion at $245,000?
Darren Coleman
Darren Coleman
We did a podcast episode with Kevin Nightingale and Shlomi Levy talking about that. They don’t represent Mr. Tavares, so it was safe for them to comment. Listeners can go back and hear that podcast. We’ve also had some Toronto Blue Jays baseball players who had similar predicaments. They look like they’ve been resolved positively for the players. But those are not exactly the same situation as Mr. Tavares, so we’ll have to see what unfolds here. And as a big sports fan yourself, I know that one’s pretty close to your heart.
Darren Coleman
So now that we got into hockey, let me lure back our American listeners for a minute. Let’s pivot into what’s happening with our American cousins. They are going to go into a very interesting 2025. They have a new president. So the difference, I think, is going to be very significant between how the U.S. is going to adopt tax policy, and it’s a little concerning, I think, for many people that Canada doesn’t, apparently seem to have a functioning government at the moment. So what do you guys think Mr. Trump might do in his first year in terms of tax policy? What should investors be getting ready for?
Trevor Perry
I think you’re going to see them make the tax changes he brought in in his first term permanent. I think you’re going to get that lower corporate tax rate, which is going to cause great tumult in this country and in other countries, but particularly Canada. I think there’s going to be pressure here to have some kind of sensible corporate tax rate, the estate tax change. There won’t be any changes to estate taxation in the US for the foreseeable future. So there will be again, more reasons for, as Ross Perot called it, that great sucking sound of Canadian capital, both real and human, to leave the country.
Darren Coleman
But are they actually doing it? So gentlemen, have you actually seen evidence in your own practices of Canadians saying, I’m done, I’m out of here, and they’re actually making the steps they’re making, the move to leave, to lower tax jurisdiction. How many people are really doing it?
Kim Moody
Yeah, 1,000% and I’ve written about this a lot. I’ve spoken about it publicly. I’ve spoken at conferences about this. At one particular conference I spoke about this and there was an academic who was pro capital gains changes. So I showed the statistics but his rebuttal was, I don’t believe you. Here’s the statistics coming out of my office in Calgary. And we’re not a big office, but we’re about 85 people. We act for high net worth, ultra high net worth, private companies and individuals. In the first 23 years of my career — I’ve been practicing for roughly 31 years now — in the first roughly 23 years of my career, I did maybe a dozen departure tax files. It was really easy to leave Canada without incurring departure tax. That all changed. I want to say late 90s, am I right? Trevor, something like that, and and they made it a lot more difficult. And so in the last nine years, this increased with a new high personal tax rate. And then fast forward to the attack on small businesses in 2017 that caused a whole bunch of angst. COVID caused a whole bunch of out-of-control spending. And then the capital gains stuff was just kind of over the top. So all to say, in the last, especially five years, the number of files that I’ve worked on in the, you know, departure tax. You want to take a guess, Darren? Continue Reading…
The article was from the Harvard Business Review and highlighted 7 Hidden Traps of Retirement, which the writers discovered during interviews with “dozens of highly respected former chief executives.”
As I read the article, I realized the traps of retirement don’t apply only to folks retiring from top management positions.
These traps present a risk to all of us.
Today, I’m presenting each of the 7 Hidden Traps of Retirement and my thoughts on how best to avoid them.
The article that made me think was The Challenges of Retiring from a High-Powered Job, written by three founders of ONYX, an invitation-only group designed to build a community for current and former CEOs. I encourage you to read the article, but I’ll summarize the key points below.
In their work helping CEOs prepare for retirement, the team has discovered seven hidden traps of retirement. While focused on senior managers, I’m taking a different twist with their list and considering how these traps apply to all of us. I’ve taken the liberty of renaming each of the seven hidden traps of retirement to better align with the readers of this blog and providing my thoughts on how to avoid falling into each.
The risks apply during our planning for and transition into retirement. If you’re struggling with the transition into retirement, perhaps it’s because you’ve fallen into one of these traps.
1. Focusing on who you are, instead of who you want to become.
Original Title: Looking through the lens of the present impedes you from seeing future possibilities.
In your final years of work, it’s easy to procrastinate on retirement planning and focus on your current role. You’re busy doing your job and you can deal with that retirement stuff after you’re done working. That’s a dangerous approach that far too many people follow. It’s one of the traps of retirement for a reason. Seeing beyond your current role requires a creative imagination, the type that has likely been dormant for years. Losing your sense of identity can be a shock in retirement, but the impact can be minimized by the appropriate planning.
How to Avoid the Trap:
Forget about your current role for a minute. After all, it will be irrelevant the day after you retire. (Let that sink in)
Think about what you want your life to BECOME in retirement. You’ll no longer have that title, and that sense of identity you get from your work will be gone. That’s scary, and something a lot of people avoid thinking about. Don’t be that person. Rather, think about your new identity in retirement. What do you want to be known for? What areas are you curious about? What did you do as a child that you’d like to revisit now that you’re free from those chains of work? Carve out time to think about what impact you want to have with your newfound freedom. It takes some time, so be patient. The important thing is to think beyond your current role and imagine what you can do to make a difference once the job is gone.
In What I’ve Learned From Writing 400 Articles About Retirement, I wrote about my new identities in retirement (writer, running a charity, grandfather, etc). A quote from that article is relevant here, and I’d encourage you to adopt it as one of your goals in retirement:
“I’m not who I used to be, and I love who I’ve become.”
2. Focusing on too many options.
Original Title: A wealth of options can overwhelm and paralyze decision-making.
That busy schedule and rigid structure will disappear when you retire, and you’ll be looking at a “blank sheet of paper.” Having no schedule or structure to your day sounds appealing, but it becomes disorienting after a surprisingly short period. Your brain will start searching for something to do, and you’ll have difficulty prioritizing what you want to do with your life.
How to Avoid the Trap:
Take some quiet time to think about what impact you want to make with your retirement years. Think about the causes you have a passion for. Listen to your inner curiosity, and take that first step to see where it leads. When you’re thinking about something you could do, compare it to that list of things that matter to you. For example, you may have enjoyed working with younger people during your career and would like to find a way to do that in retirement. Perhaps you’ll become a mentor, a Big Brother, or a business coach to the next generation.
Find your “North Star” and pursue only those opportunities with strong alignment to the things that matter to you. Don’t pursue “busyness” for the sake of being busy. Rather, invest your time in areas where you have a real interest (lack of experience doesn’t matter, as I’ll demonstrate below).
Using your time to impact an area you care about is the true path to happiness.
3. Not building relationships outside of work.
Original Title: Relying on your old network can distract you from the critical task of building your new one.
Everybody thinks they’ll keep in touch with folks they worked with. Almost no one does. It’s one of those strange realities of retirement, and it will likely happen to you. (Note this statistic in “Shining The Light on Retirement Blind Spots”: 62% of retirees missed the relationships from work, whereas only 29% of pre-retirees expected it to be an issue).The relationships at work are about “work.” Once you’re out of the scene, it becomes difficult and awkward to maintain those relationships.
And yet, relationships matter.
I dedicated an entire chapter in my book to relationships. People think about their paycheck stopping when they retire, but they often overlook the “softer” benefits they receive from work which will also disappear:
Structure
Sense of Identity
Relationships
Sense of Purpose
Sense of Accomplishment
Ironically, these 7 traps of retirement align almost perfectly with that list. That doesn’t surprise me in the least. If you’re a regular reader, you know I’m passionate about the importance of the “soft side” of retirement.
How to Avoid the Trap:
In your final year or two of work, be intentional about building relationships outside your workplace. Your mission: build relationships that will be there after you retire. Spend a few Saturdays volunteering at a local charity. Get involved with a few Facebook groups in your area that do things that interest you. Join a gym and learn to play pickleball. Join a local hiking club. Go to a Trout Unlimited meeting. Call an old friend. Attend a local church.
Explore whatever interests you and pay attention to the people in the groups you visit. In time, you’ll find a group that feels “right.” Pay attention, that’s where you’ll get your retirement relationships.
They matter more than you expect.
4. Waiting to figure out retirement until after you retire.
Original Title: Delaying retirement planning can lead to urgent, anxious, and awkward outcomes.
A quote from the original article is telling:
“The majority of CEOs and executives we talked with told us they failed to appropriately plan for their retirement — and nearly all told us they waited too long to start.”
It is, perhaps, the most common of the traps of retirement. Many people are nervous about retirement, and procrastination is a common response. “I’ll deal with it when I’m retired,” many people think. That’s one approach, but research has shown that taking that route will lead to a difficult transition. The cliff is coming, and you can prepare your parachute or just take the leap and figure it out once airborne. I recommend the former approach, it makes for a much smoother landing.
How to Avoid the Trap:
As I was in my final working years, I was interested obsessed with figuring out why some people had a smooth transition to retirement, whereas others struggled. As I’ve written before, there’s one single element that is the most highly correlated with the smoothness of your transition. That element?
The amount of time you spend planning for retirement in your final years of work (both on financial and non-financial issues).
Spend a lot of time planning, and your retirement will be smooth. Ignore it until you retire, and buckle in for a rough ride. As I wrote in The 4 Phases of Retirement, only 15% of retirees skip over the dreaded Phase II. I was lucky enough to be one of them. So can you. Continue Reading…
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