Longevity & Aging

No doubt about it: at some point we’re neither semi-retired, findependent or fully retired. We’re out there in a retirement community or retirement home, and maybe for a few years near the end of this incarnation, some time to reflect on it all in a nursing home. Our Longevity & Aging category features our own unique blog posts, as well as blog feeds from Mark Venning’s ChangeRangers.com and other experts.

Do you want to be younger in 2018 than in 2017?

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By Fritz Gilbert, TheRetirementManifesto.com

Special to the Financial Independence Hub

I hate New Year’s Resolutions, and I can’t remember the last time I made one.

Why make them, if you’re most likely going to break them?  That doesn’t make sense to me.  Call me cynical, but that’s just not the way I think about challenging myself to improve.

Don’t get me wrong.  I love thinking about how I can move life from Good To Great, and I enjoy having goals.  I think often about both my long- and short-term goals, and where my life is going.  I do it informally, by constantly watching for opportunities to create improvements in my life and developing personal challenges.   I push myself to achieve the goals I set for myself (like writing this blog).  Do you?

Make the pursuit of challenges an ongoing habit in your life. It’s a way of Living Life At The Limits, and it keeps life interesting.  Most of you know that I’m a bit of a fitness nut, and I’m always on the lookout for opportunities to challenge myself.  I grab onto interesting things as they cross my path.  It’s why I swam in the cold waters of London on an early November morning.  It’s something that keeps me young.

It works for me.

Try it …  It just may work for you.

Today, I’ll give you your chance …

A Bunch Of Folks Decide To Get Younger Together 

 

Something exciting happened at the beginning of this year, and it generated this post you’re now reading (originally posted early in January).  A new Community/Movement/Revolution was launched, and it’s rapidly taking shape.  It’s only a few months old but it’s starting to run.  And it’s starting to run …

… Fast.

Do You Want To Be Younger?

This development is a legitimate way to make you Younger In 2018 Than In 2017, if you’re willing to commit to doing a bit of work. A bunch of folks are joining in and this thing is gaining momentum.  The fact that it’s (original) timing falls in line with New Year’s resolutions is irrelevant, in my book (tho, in fairness, it’s a good time to launch the challenge, as many folks are thinking about trying to get into shape for the New Year).

This movement is a great opportunity and I’m convinced that it can, indeed, help in your quest to Achieve A Great Retirement (my byline).  It’s a group of friends with similar interests urging each other on to mutual success (on both sides of the US/Canada border).

If you’re interested, check it out.  You don’t have to commit today.  Just explore and see if it’s something that interests you.   I’ll show you below, but in case you’re impatient and just want to head over there now here’s the link, but please don’t go there yet 🙂 

The group’s open to all, and readers are especially encouraged to participate.

The #YoungerNextYear 2018 Community Is Launched! Join In The Fun. EnCourage each other. Succeed. Click To Tweet

The Birth

The excitement all started on Dec 31, 2017 when Vicki @ MakeSmarterDecisions sent the following Tweet and, in the process,  Launched A Movement …

The Birth Of #YoungerNextYear2018:

What’s Younger Next Year All About?

Continue Reading…

When you retire where do all your friends go?

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This question comes up at presentations I make on Victory Lap Retirement. A strong social network is key to our happiness and longevity. Friendships enrich our lives, so we should always look to build our social network and build relationships with people we care about.

The challenge for all of us is that we are so busy working and nurturing our families, we can sometimes underinvest in our friendships. Our relationships with friends can also suffer when we are stressed out and in some cases pull back from friends; after all, who wants to be a “downer” to our friends?

One of the biggest mistakes you can make is sacrificing your time with friends, just so you can work longer to save for your retirement. The risk is when you finally get there, you may end up wondering where all your friends have gone. We all have times in life where we have to invest time at work, which means not spending time with friends and family. Don’t lose sight of your friends and make it a priority to invest time strengthening your friendships, especially as you get closer to retirement.

Everyone has two groups of friends: work friends, the group you spend a great deal of time with; and your outside or real friends, people that know you warts and all, and accept you for who you really are.

Work Friends

If you take an inventory of your relationships, you may be at risk of a lonely retirement if you find the majority of your social network is from work. Continue Reading…

Retired Money: The case for early partial annuitization

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Fred Vettese and Rona Birenbaum in YouTube video

If you lack what finance professor and author Moshe Milevky calls a “real” pension (i.e. an employer-sponsored Defined Benefit plan), then you’re a likely candidate for annuitization or at least partial annuitization of your RRSP and/or RRIF.

My latest MoneySense Retired Money column revisits Fred Vettese’s excellent new book, Retirement Income for Life, and in particular his third “enhancement” suggestion for maximizing retirement income. We  formally reviewed Vettese’s book in the MoneySense column before that, and commented on it further here at the Hub. 

You can find the new piece drilling down on the partial annuitization enhancement by clicking on the highlighted headline: RRIF or Annuity? How about Both.

One of the main sources in the piece is fee-only planner Rona Birenbaum (pictured above with Fred Vettese), who has some useful videos on YouTube about annuities, including an interview with Vettese about the partial annuitization strategy described in the new MoneySense column. See Is it time for annuities?

Expect an annuity wave from retiring boomers without DB pensions

Certainly you’re going to hear a lot more about annuities as the baby boomers move seriously from Wealth accumulation mode to de-accumulation, aka “decumulation.” Coincidentally both Vettese and I are 1953 babies with April birthdays. In an interview with Fred, he told me he bought some annuities a year ago and that he believes that those who plan to retire at age 65 (and who lack a traditional employer-sponsored Defined Benefit pension) should consider at least partly annualizing at 65, to the tune of roughly 30% of the value of their nest egg (typically in an RRSP or RRIF). That means registered annuities.

Certainly, in light of the 10% “correction” in stocks that occurred in the last few weeks, the possibility of a more severe stock market retrenchment has to be upper most in the minds of soon-to-retire baby boomers. I note in his recent G&M column, Ian McGugan (in his early 60s) confessed he was slowly starting to take some profits from stocks and move them to safer fixed-income investments like GICs. See The Market’s gone mad: Here’s how to protect yourself. See also Graham Bodel’s article earlier this week: Response to an investor who frets the market is going to crash.

Annuities are one way to hedge against market risk, since you’re in effect transferring some of the market risk inherent in an RRSP or a RRIF to the shoulders of the insurance company offering the annuity. That’s one reason in the YouTube video above, Vettese talks about partly annuitizing as soon as you retire, whether that be age 65, or sooner or later than that traditional retirement date.

Financial advisors may not agree with all of Vettese’s five “enhancements.”

The earlier column reviewing the book mentioned that not many of Vettese’s “enhancements” to retirement income may be endorsed by the average commission-compensated financial advisor. Even so, as the Royal Bank argued earlier this year here at the Hub, annuities can help fund a full lifestyle in retirement. It observed that 62% of Canadians aged 55 to 75 are worried they’ll outlive their retirement savings but only 10% use or plan to use an annuity to ensure they’ll have a viable lifestyle in retirement.

Regular Hub contributor Robb Engen — a fee-only financial planner who also runs the Boomer & Echo website — wrote recently (on both sites) that annuities are one way retirees or would-be retirees without traditional DB pensions can Create their own personal pension in retirement.

As I note in the MoneySense column, while I’m certainly approaching the age when partial annuitization may make sense, I’ll probably wait a year or two. But in preparation for that possibility, as well as for the column, I asked Birenbaum to prepare three quotes for a $100,000 registered annuity, starting at ages 65, 70 and 75. As you might expect, the longer you wait to begin receiving payments, the higher the payout, but it’s not such a massive rise that you could rule out early payments if you really needed them to live on.

The mechanics of buying an annuity

And should you be ready to take the step, it’s not all that complicated. In the above case, you would liquidate $100,000 worth of investments in your RRSP so the cash is available to transfer, then complete an annuity purchase application and fill out and submit a T2033 RRSP transfer form. That form is sent to your RRSP administrator, and they transfer the cash to the insurance company without triggering tax. Once all these preliminary steps have been taken, payments begin the month following the annuity purchase.

Oh, and one last step, Birenbaum adds: Start relaxing!

5 small steps to improve your physical health & 5 for your financial health

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Duke University conducted a two-year study of 218 healthy adults of normal weight to determine if a modest, sustained calorie reduction would show appreciable benefits. The plan was to reduce calories consumed by 25 per cent, but participants were unable to achieve that much.

(Author’s note: I sure couldn’t do it! A 25% reduction in my 2,000 daily calories would leave me staggering around at only 1,500 per day.)

Participants were able, however, to cut calories by an average of about 12 per cent.  This smaller change allowed them to stick to the plan without any adverse effect on mood (wherein lies a useful message in itself). The results? Lowered blood pressure; decreased insulin resistance; as well as a drop in several predictors of cardiovascular disease.

But the most appreciable result concerned C-reactive protein, a substance produced by the liver and a marker of inflammation in the body. The participants’ C-reactive levels plunged by almost half: a remarkable 47%!

It’s a no brainer that poor dietary habits would exacerbate internal inflammation. But very often this is an invisible menace (see my article ‘The Truth About Inflammation’, October 2015). Most of us remain blissfully unaware of any chronic inflammation cascading throughout our bodies. Yet this exposes us to chronic health risks as a result of knocking the body out of whack. In my case, I had the aforesaid silent inflammation and observable inflammation, which I felt in my poor old joints. And I am pretty convinced that chronic inflammation was one factor in my developing cancer.

An elevated C-reactive protein level can be a valid identifier of inflammation in the body. So, if just a 12% calorie restriction can reduce this marker by almost 50%, this is as good information as that available to an insider trader.

In the blindness of youth, so many of us can compromise our health in a mad dash for wealth. But from the other end of the lifespan, a good many seniors would gladly sacrifice some wealth for even a smidgen of better health. Those who don’t make time for their health early on in life more often have to make time for illness later.

5 ways to improve your physical health

So, if you are young, young at heart, worried that you are no longer young, here is some insider information. Five smart, little investments you can make, the aggregate interest of which, over time, will have compound into positive health returns. Continue Reading…

Retired Money: How to boost Retirement Income with Fred Vettese’s 5 enhancements

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 Once they move from the wealth accumulation phase to “decumulation” retirees and near-retirees start to focus on how to boost Retirement Income.

The latest instalment of my MoneySense Retired Money column looks at five “enhancements” to do this, all contained in Fred Vettese’s about-to-be-published book, Retirement Income for Life, subtitled Getting More Without Saving More. You can find the full column by clicking on this highlighted headline: A Guide to Having Retirement Income for Life.

You’ll be seeing various reviews of this book as it becomes available online late in February and likely in bookstores by early March. I predict it will be a bestseller since it taps the huge market of baby boomers turning 65 (1,100 every day!): including author Fred Vettese and even Yours Truly in a few months time.

That’s because a lot of people need help in generating a pension-like income from savings, typically RRSPs, group RRSPs and Defined Contribution plans, TFSAs, non-registered investments and the like. In other words, anybody who doesn’t enjoy a guaranteed-for-life Defined Benefit pension plan, of the type that are still common in the public sector but becoming rare in the private sector.

The core of the book are the five “enhancements” Vettese has identified that help to ensure that those seeking to pensionize their nest eggs (to paraphrase the title of Moshe Milevsky’s book that covers some of this ground) don’t outlive their money. Vettese says many of these concepts are current in the academic literature but have been slow to migrate to the mainstream, in part because few of these “enhancements” will be welcomed by the typical commission-compensated financial advisor. That in itself will make this book controversial.

Each of these “enhancements” get a whole chapter but in a nutshell they are:

1.) Enhancement 1: Reducing Fees

By moving from high-fee mutual funds or similar vehicles to low-cost ETFs (exchange-traded funds), Vettese explains how investment fees can be cut from 1.5 to 3% to as little as 0.5% a year, all of which goes directly to boosting retirement income flows. One of his takeaways is that “Tangible evidence of added value from active management is hard to find.”

2.)  Enhancement 2: Deferring CPP Pension

We’ve covered the topic of deferring CPP to age 70 frequently in various articles, some of which can be found here on the Hub’s search engine. Even so, very few Canadians opt to wait till age 70 to collect the Canada Pension Plan. Because CPP is a valuable inflation-indexed guaranteed for life instrument — in effect, an annuity that you can never outlive — Vettese argues for deferral, although he (like me) is fine with taking Old Age Security as soon as it’s available at age 65. He argues that for someone who contributed to CPP until age 65, they can boost their CPP income by almost 50% by waiting till 70 to collect.  “You are essentially transferring some of your investment risk and longevity risk back to the government, and you are doing so at zero cost.” Continue Reading…