Tag Archives: Financial Independence

Re-introducing Tontine Annuities Might Shave Years Off Your Findependence Day

Posted By Financial Independence Hub | May 28, 2015

By Moshe A. Milevsky

Special to the Financial Independence Hub

Here is a non-surprising fact. Most retired individuals do not choose to voluntarily annuitize their accumulated wealth or savings at retirement. They prefer the lump sum. This has been christened by financial economists: “the annuity puzzle” and has been the topic of Ph.D. theses for decades. I am guilty of supervising a few of these myself.

Sadly, life annuities are relatively unpopular – especially compared to stocks and bonds — in a large part of the world and simply unavailable in most others. Indeed, the few jurisdictions and countries in which there is a sizeable market for annuity products – such as Canada or the U.S. — it is often driven by tax-advantaged treatment and/or government “nudging and defaults” as opposed to an intrinsic consumer appreciation for longevity insurance. Like most insurance products, they are ‘sold’ but rarely purchased.

Could the past hold the key to Longevity Insurance?

Crashing Through The Retirement Barrier

Posted By Michael Drak | May 26, 2015

By Michael Drak,

Special to the Financial Independence Hub

On May 6^th 1954, Roger Bannister became the first person in the world to run a sub-4 minute mile. At the time no one believed the human body was capable of going that fast and although many had tried none had succeeded up to that point. Then along came Roger Bannister, who ignored the nay-sayers and posted a mile of 3 minutes 59.4 seconds.

The interesting thing is that after the sub-4 minute mile limitation was broken many other athletes posted sub-4 minute times, starting almost immediately after Roger Bannister proved it could be done.

Self-imposed mental barrier

So what happened, why the sudden success? Continue Reading…

Weekly wrap: Over-taxed rich, starving on bond yields, and the hazards of experts

Posted By Jonathan Chevreau | May 23, 2015

A week after his Globe & Mail article, Overtaxing the Rich: A Cautionary Tale, attracted widespread attention, Scotiabank tax guru Tim Cestnick has followed up with Overtaxing the Rich: Canada’s Tax Debate rages on.

In the original piece, Cestnick floated a colourful parable that suggested the rich are more than paying their share, to the benefit of those less fortunate. But if those with the highest incomes are pushed too far beyond the 50% rate, they may be inclined to leave, making the circumstances of those further down the pyramid that much worse.

With 650 comments and counting, it’s no hyperbole in this case to say there’s a true debate that’s raging here. And with an election coming up this fall, it’s safe to say this topic won’t be going away any time soon. The new higher TFSA limits are certainly a major element of this debate. No surprise that we at the Hub favour the new higher limits and I’d be surprised if Tim Cestnick or any of his well-heeled clients feels any differently.

The Bond dilemma

Meanwhile, rich or not and highly taxed or not, it continues to be a struggle finding yield at today’s paltry levels of interest rates, which of course are fully taxed outside registered accounts. This was one of several themes I picked up at a recent ETF and mutual fund conference in Chicago. Here’s my column in Motley Fool Canada on this topic, titled Caution Ahead: Why Bonds May Soon Become Much Harder to Manage.

In a similar vein, The Daily Reckoning’s Bill Bonner warned this week that Bonds are No Longer a Safe Haven. I guess that leaves cash or stocks. Continue Reading…

Googling Financial Independence

Posted By Jonathan Chevreau | May 22, 2015

When you run web sites themed on financial independence, you pay close attention to search engines, particularly Google. Curious about whether the term “financial independence” was making any headway against the incumbent term, Retirement, I entered both phrases into Google.

The results were about what I’d expect: 258 million results for Retirement but a decent showing of 18 million for Financial Independence.

And what about our pet contraction for Financial Independence, or Findependence? You had to ask, didn’t you? 43,600 results but the good news there is most of these hits come directly from Yours Truly and related enterprises (books, ebooks, websites and references to the term in other media).

Wikipedia’s definition still rules

The Battle between your Present and Your Future Self

Posted By Robb Engen | May 21, 2015

by Robb Engen, Boomer & Echo

Special to the Financial Independence Hub

Determining your financial priorities is like having a battle between your present and future self. Decisions that make your present-self happy and content might have dire consequences for your future-self.

Conversely, you don’t want to torture your present-self for the chance to be happy and prosperous in the distant future.

We’re raising a young family and with that comes a host of competing financial priorities to balance today. It’s easy to think we can put off saving for retirement, or even the next big purchase, until later in our working years when we’re more established in our careers and the pressures and impact of child care is lessened. But that means screwing over our future selves – making life more difficult tomorrow due to our choices today.

Share this:

Share this:

Share this:

Share this:

Share this:

Sign up for our Daily Digest E-Mail!