My latest MoneySense Retired Money column reviews the new fifth edition of The Boomers Retire by certified financial planners Alexandra Macqueen and David Field. Click on the highlighted headline here to retrieve full article: Fresh takes on the challenges facing baby boomers as they approach retirement.
As I note in the column, the original edition of The Boomers Retire (which I read at the time) was by Lynn Biscott and was published back in 2008.
Macqueen and Field are both CFPs and the book is aimed at both financial advisors as well as their clients, as indicated in the book’s subtitle.
Clearly, retiring boomers constitute a massive potential readership. I myself co-authored The Wealthy Boomer, way back in 1998. At that time, baby boomers may have started to worry about Retirement but most, including myself, would have been squarely in the Wealth accumulation camp.
Wealthy Boomers now well on way to transition to Decumulation
Here in 2021, Decumulation is the emerging financial focus of Baby Boomers, many of whom will already be retired or semi-retired, and considering new decumulation solutions like the Purpose Longevity Fund, which this site has looked at more than once. (here via Dale Roberts and here via another MoneySense Retired Money column.)
As the authors note in the opening chapter of The Boomers Retire, Defined Benefit plan coverage in the private sector fell by a third, from 62% to 42%, between 2007 and 2017. The fortunate few in the public sector have a DB pension: a whopping 90% of them but the rest of us must cobble together various retirement income streams from RRSPs, TFSAs, non-registered savings, part-time work and whatever group RRSPs or Defined Contribution plans they’ve accumulated from various employers along the way: hence the Purpose solution, which retired actuary and retirement expert Malcolm Hamilton described as a mix of tontine, variable annuity and mutual fund.
Macqueen’s Pensionize Your Nestegg (coauthored with noted finance professor Moshe Milevsky) addressed a similar audience: primarily private-sector workers who lack the (mostly) public sector’s inflation-indexed, tax-payer backed, guaranteed for life Defined Benefit pension plans. (hence the commonly used term, “Pension Envy.”)
However, Macqueen and Field’s new edition of The Boomers Retire covers such new esoteric tools that are only slowly coming into use: such as Variable Pay Life Annuities (VPLAs) and ALDAs (Advanced Life Deferred Annuities; see this Retired Money column I wrote when it was first introduced in a federal budget just over two years ago). Hopefully, a future edition will cover the new Purpose Longevity Fund and what will no doubt eventually spawn some imitators.
Filling the financial literacy gap about Retirement
As I conclude in the review, the book is so thorough that it serves as a reminder of just how complex the Canadian tax and retirement planning world is. Late in June as I blogged here on the Hub, The Retirement Savings Institute released its findings that for Canadians nearing the decumulation years, financial literacy about retirement income has been slipping in recent years.
In short, there is a knowledge gap about retirement income that is well filled by The Boomers Retire, as well as my own Findependence Day, which has just been re-released as a new US edition, summarized here on the Hub on July 1st.