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.

Financial Independence: While you’re still young enough to Enjoy it

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Image by: Averie Woodard on Unsplash

By Jordan McCaleb

Special to Financial Independence Hub

Financial Independence (aka Findependence) is a dream many hope to achieve, the freedom to live the life you’ve always dreamed of, pursuing passions or simply choosing to work on your own terms. While these are all great reasons, what about achieving this earlier?

This article will explore key investment strategies and asset allocations to accelerate your path to early financial freedom, including the role of precious metals investments.

Traditional Investments & their Limits

It’s important to acknowledge that traditional investments (stocks, bonds, mutual funds, and ETFs) will always be the building blocks when it comes to financial independence. 

However, when it comes to achieving Findependence earlier in life, traditional investments may have potential limitations and risks involved.

Potential Limitations and Risks:

  • Inflation: Inflation erodes the real value of your accumulated savings over time.
  • Market Volatility: Unpredictable swings and downturns can threaten your gains and potentially delay your FI (financial independence) timeline.
  • Economic Uncertainty: Geopolitical risks and unforeseen crises can increase risk and cause market corrections, impacting even the safest portfolio.

While traditional investments form a crucial base for any Findependence strategy, they may not be enough to achieve the resilience and growth required. Achieving financial independence early requires specific and powerful assets to drive your portfolio, providing a balance to your financial ecosystem.

Accelerating your FI Timeline: Beyond just Investing

Accelerating your Findependence timeline requires additional steps. A crucial part is increasing your savings rate, aiming for 50% to 75% of your income, creating a powerful snowball effect that reduces your time horizon. This pairs with increasing your income through career advancement, salary raises, or profitable side hustles.

Simultaneously, optimizing expenses and embracing a frugal lifestyle in areas like housing, transportation, and food can further boost investment growth over time. A key step is defining your (FI Number) typically 25 times your desired annual expenses ($50,000). This lifestyle-specific figure provides a clear target.

Diversifying for Resilience: Beyond the Basics

Beyond traditional investments and accelerating your timeline, diversification involves not just different stocks, but asset classes as well (equities, fixed income, real estate, and alternatives). Each behaves differently under various economic challenges. Diversifying across geographies and industries can protect against downturns in a market or sector.

A crucial concept to know is asset correlation: You want your assets to not run in the same direction. According to Stock Rover, this reduction in volatility can significantly impact overall returns. For example, a portfolio experiencing wild swings of +20% then -20% loses money, while reducing it to +10% then -10% swings leads to a healthier outcome. In essence, a low correlation portfolio better withstands economic turbulence.

Strategic Allocation: The Role of Precious Metals

When aiming for early Findependence, strategic alternative assets are crucial. Gold and silver stand out as a hedge against inflation and economic uncertainty due to their low correlation nature. Historical data from Investopedia reveals that while the S&P 500 dropped almost 10% (2007-2010) during the 2008 financial crisis, a 1971 gold investment significantly increased in value. Gold IRAs also offer tax advantages for those interested in physical metals. Continue Reading…

Rethinking Retirement Income

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How real Spending Patterns challenge Traditional Retirement Income Planning  

Canva Custom Creation: Lowrie Financial

By Steve Lowrie, CFA

Special to Financial Independence Hub

Here’s a contrarian thought.

When most people imagine retirement, they picture steady cash flow from their investments to support their lifestyle.

The common assumption is that they’ll preserve their financial nest egg and live off the growth” drawing a consistent amount each year while keeping the principal largely intact.

But there are actually three broad approaches. At one end, some plan to spend their entire portfolio over their expected lifetime (as one client joked, “I want my last cheque to bounce.”  At the other end is the idea of preserving capital entirely. Most people, in practice, end up somewhere in between.

But what if that assumption is only part of the story?

The reality is that real-life retirement spending isn’t flat. It fluctuates unevenly and unexpectedly over time. And those patterns can have a big impact on your retirement income strategy.

Retirement Planning has changed. Have you?

For decades, retirement planning has focused on Saving: building a nest egg, maximizing RRSPs, and making the most of tax-advantaged accounts.

But the real challenge begins after you stop working. Then, the question becomes:

How do I turn my savings into reliable, lasting income?

This is where traditional models often fall short. Most assume spending stays constant throughout retirement. But as recent research from J.P. Morgan Asset Management shows, that’s not how real retirees actually spend.

For more on how conventional rules can mislead, see Debunking Retirement Financial “Rules.”

What the Data shows

J.P. Morgan studied anonymized spending data from more than 5 million U.S. households, offering a detailed picture of how retirees actually spend in retirement. These findings closely align with what I’ve observed over 30 years of working with Canadian clients.

Three key Retirement Spending patterns:

  • Spending Surge: Many retirees experience a spike in spending right around the time they retire. This is often due to lifestyle changes and delayed goals coming to fruition in the early retirement years, like travel, home upgrades, or helping adult children.
  • Spending Curve: Over time, overall spending tends to decline. For example, households with investable assets between $250,000 and $750,000 saw an average inflation-adjusted spending decrease of about 1.65% annually through retirement.
  • Spending Volatility: Perhaps most important, spending is anything but steady. According to J.P. Morgan’s 2025 Guide to Retirement, 60% of retirees saw their expenses fluctuate by 20% or more in the first three years of retirement. And this volatility often continues well into later years.

These findings show that retirement income strategies need to be flexible enough to accommodate spikes, declines, and everything in between.

Why it matters

Most financial plans assume a flat, inflation-adjusted income for 25 to 30 years. That’s a very good place to start. However, based on both this research and my practical experience observing hundreds of client habits over three decades, here’s what can happen:

  • You over-save early, delaying retirement unnecessarily
  • You under-spend during healthy years, missing out on the freedom you’ve earned
  • You get caught off guard by spending spikes, leading to early withdrawals or tax surprises

J.P. Morgan’s data shows retirees typically need about 92% of pre-retirement income at age 65, but just 70% by age 85. That is a significant shift and a reminder of why you want healthy exposure to equities, which is the only asset class that has historically given the best chance of outpacing inflation over the long run.

A better way to Plan for Retirement Income

Here are a few ways to build a more adaptable, evidence-based retirement plan: Continue Reading…

Retired Money: An online Canadian Retirement Club

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My latest MoneySense Retired Money column looks at a recently launched Retirement Club devoted to Canadians in or near the cusp of Retirement.

Primarily online, Retirement Club was launched by occasional MoneySense contributor Dale Roberts and a partner, Brent Schmidt. You can find the full MoneySense column by clicking on the highlighted headline:  Retirement planning advice for people who don’t use an advisor.

Roberts, who once was an advisor for Tangerine, is known for his Cutthecrapinvesting blog and in the U.S. for his contributions to Seeking Alpha. While I have no financial or business interest in the club I did become a member. There are regular Zoom calls where (mostly) recent retirees exchange views on topics like the 4% Rule, RRSP-to-RRIF conversions, ETFs, Asset Allocation in the age of Trump 2.0 and many of the topics this Retired Money column often attempts to tackle.

            You can find Roberts’ own announcement of the club – which charges an annual fee of $250 – on my own site earlier in mid-April. (+HST, but it may qualify as an Investment Counsel fee deductible on your personal tax returns). As always check with your accountant, advisor or tax professional).

            My initial impression is that the club seems to involve a lot of work for someone who describes himself as semi-retired. But that seems to be par for the course for financial writers approaching retirement. I’m in a similar boat, as is the American blogger Fritz Gilbert, who recently announced the similarly ironic fact that he was retiring from Full-time Blogging about Retirement. (also in April).

Aimed at self-directed investors

            In his introduction, Roberts wrote that many of his audience are self-directed investors. That jibes with his site’s campaign against high-fee investment funds, in favor of low-cost index funds or ETFs purchased at discount brokerages. While some, like myself, may also use the services of a fee-for-service advisor, many DIY retirees are in effect running their own pension plans. In theory, one of those much-written-about All-in-one Asset Allocation ETFs can do much of the heavy lifting for such investors, but in practice, there’s a fair bit of anxiety about markets, the Canadian government’s rules about TFSAs, RRIFs etc., Asset Allocation, the ongoing Trump Trade War and much more. So it makes sense to gather in one place and exchange views with others going through a similar process.

          In a regular email update to Club members, Roberts explains that “the key concern of Retirement Clubbers is financial security and how to use their portfolio assets in the most efficient and cost-effective manner. That’s why we have a master list of retirement calculators (free and pay-for-service) to test.”

Delaying Government Pensions

         As you’d expect, the Club regularly addresses the major chestnuts of Personal Finance as it relates to those within hailing distance of Retirement. The most common ‘Retirement Hack’ espoused by the Club is to delay receipt of the Canada Pension Plan [CPP] and Old Age Security [OAS] past the traditional retirement age of 65 to allow for more generous payouts at age 70. Most club members lean to taking these benefits as late as possible but of course personal circumstances may dictate earlier start dates.

        To bridge the income gap (from age 60 to 70 for example) RRSP/RRIF accounts will be harvested (spent) in quick fashion: often termed an RRSP meltdown. TFSA and Taxable accounts can also be tapped to provide necessary funding as retirees delay receipt of those CPP and OAS benefits. Continue Reading…

Consider all Retirement Investment Management Options for a Financially Sound Future

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Here’s a look at some of your best retirement investment management options and choices. These include pensions, RRSPs, RRIFs and more.

TSInetwork.ca

Your retirement investment management plan should build in contingencies for long-term medical needs and supplemental health insurance. As well, you should factor in caring for loved ones who are unable to take care of themselves.

When you work out a plan for your retirement, make sure that you aren’t basing your future income on overly-optimistic calculations that will end up leaving you short.

Retirement income can come from many different sources, such as personal savings, Canada Pension Plan, Old Age Security, company pensions, RRSPs, RRIFs, and other types of investment accounts.

 

Learn how your retirement investment management works in a Canada Pension Plan (CPP)

The Canada Pension Plan, or CPP, is the name for the Canadian national social insurance program. The program pays out based on contributions, and it provides income protection for individuals or their survivors in the instance of retirement, disability or death. Since 1999, the CPP has been legally permitted to invest in the stock market.

Nearly all individuals working in Canada contribute to the CPP, unless they live in Quebec, where the Quebec Pension Plan (QPP) exists and provides comparable benefits.

Applicants can apply to receive full CPP benefits at age 65. The CPP can be received as early as age 60 at a reduced rate. It can also be received as late as age 70, at an increased rate.

Here’s a look at some of the pensions or benefits provided by the Canada Pension Plan:

  • Retirement pension
  • Post-retirement pension
  • Death benefit
  • Child rearing provision
  • Credit splitting for divorced or separated couples
  • Survivor benefits
  • Pension sharing
  • Disability benefits

Use a Registered Retirement Savings Plan (RRSP) as a starting place when you look into retirement investment management

An RRSP is a great way for investors to cut their tax bills and make more money from their retirement investing.

RRSPs were introduced by the federal government in 1957 to encourage Canadians to save for retirement. Before RRSPs, only individuals who belonged to employer-sponsored registered pension plans could deduct pension contributions from their taxable income.

RRSPs are a form of tax-deferred savings plan. They are a little like other investment accounts, except for their tax treatment. RRSP contributions are tax deductible, and the investments grow tax-free.

You might think of investment gains in an RRSP as a double profit. Instead of paying up to, say,  50% of your profit to the government in taxes and keeping 50% to work for you, you keep 100% of your profit working for you, until you take it out.

Convert an RRSP to a RRIF to create one of the best investments for retirement

A Registered Retirement Income Fund (RRIF) is another good long-term investing strategy for retirement.

Converting your RRSP to a RRIF is clearly one of the best of three alternatives at age 71. That’s because RRIFs offer more flexibility and tax savings than annuities or a lump-sum withdrawal (which in most cases is a poor retirement investing option, since you’ll be taxed on the entire amount in that year as ordinary income). Continue Reading…

You are too young to retire

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By Mark Seed, myownadvisor

Special to Financial Independence Hub

Inspiration for this post arrived from attending a few retirement parties of late with work colleagues, another one as recently as yesterday and a few more to attend this spring.

Is age 50 too young to retire?

What about age 55? Age 60?

After talking to some work colleagues who submitted their retirement letters and who are now moving on, I know their ages. The celebration yesterday was for someone in their early 60s. They talked and yearned about more time at their cottage, doing small home reno projects, and leaving early morning Microsoft Teams calls in the rearview mirror.

They also talked about their desire to retire now since they “had enough” both mentally and financially: support from the latter after working with their financial advisor or planner and doing some retirement math on their own to bridge the gap between spending needs now and when their pension benefits would kick in, at age 65, including their firm intention to take CPP and OAS at that age too.

Although I’m leaping to lots of assumptions here, this makes me believe that the personal retirement savings of some work colleagues (the sum of RRSPs, TFSAs, non-registered investments or other assets) is likely small to modest beyond a workplace pension: in that they needed to work to ensure they were not sacrificing their personal portfolio too much, too soon. I get that. After decades of raising a family, buying a cottage, paying down a mortgage or two along with other expenses I’m sure, it seems my colleague was more than ready to permanently slow down; cut the cord from work and enjoy their time more while they still have decent health. Good on them. 🙂

This individual is however not the first person to mention the following to me:

“Oh, I can’t afford to retire yet but thinking age 63 or so should be fine since that’s when I can get my full OAS and decent CPP income.”

And my work colleague is hardly alone …

In looking at some stats (Source: StatsCan) the average age of retirement is hardly for anyone in their 50s:

You are too young to retire

These are also not easy times to retire…

Rising general inflation, uncertain tax rates, and higher healthcare costs could very well impact many retirees at any age. Myself included. Certainly, starting to save for retirement early and often and getting out of debt faster than most would be enablers – and I hope they have been for us.

You are too young to retire – is early retirement right for you?

Although many Canadians seem to expect to retire between the ages of 60 and 70 above, there is absolutely no hard and fast rules about when you need or must stop working of course.

Your retirement timeline will depend on many factors, I’ve highlighted some milestone ideas below:

3-5 Years Before Retirement

This is where dreams might start becoming a reality. I was there. I wrote about the emotional side of early retirement back in 2021 as my own evidence.

Somewhere between 3-5 years before retirement, it’s probably wise to get some retirement details in order. Accuracy isn’t overly important IMO but the process of planning is. 

I recall focusing on our desired lifestyle and spending habits to go with it: what early retirement or semi-retirement or full retirement might look like:

  • We started estimating our retirement spending levels, our income sources, and inflation factors.
  • We started evaluating our portfolio returns over the last 5- or 10-years.
  • We looked seriously at our sustainable cashflow from our portfolio (passive dividend and distribution income since we’d be too young to accept any workplace pension or any CPP or OAS government benefits).
  • We started tracking our spending in more detail to challenge those spending assumptions.

1-2 Years Before Retirement

As recently as early 2024 for us, things got more serious.

You might recall we became mortgage and debt-free almost 18 months ago.

You might also recall we realized our financial independence milestone last summer. 

In the year or so leading up to any big decisions, more detailed planning kicked into higher gear:

  • We started to explore ways at work to test some semi-retirement assumptions; the desire but also the financial flexibility to work part-time vs. full-time (i.e., could we still make ends meet).
  • We started to look into post-retirement healthcare insurance options, where needed.
  • We started to talk about our purpose (if not working at all) – what would we do with our time?
  • We started to position our portfolio for upcoming withdrawals.

< 1 Year To Go Before Retirement

Although we might be in this timeline, not sure, since part-time work is now occurring with our solid employer (this could continue for both of us??) but this is where the real retirement countdown calendar probably begins for most people…as you strike full-time working days off your calendar: Continue Reading…