Tag Archives: income

Conscious Clients don’t put Retirement plans at Risk

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dougdahmer
Doug Dahmer

By Doug Dahmer, Emeritus Retirement Income Specialists

Special to the Financial Independence Hub

One of the most exciting and rewarding aspects of my job is working with my clients as they learn what I call ‘Conscious living.’ It’s a skill that has tremendous impact on their quality of life and their retirement plan.

My ‘Conscious’ clients have a retirement plan and clearly defined goals. They know what they want to do, when they want to do them and how big they want to do them. They also have the tools to explore the implication of each financial decision or potential alteration to their plan. And they understand the future impact that an ill-considered, near-term expenditure will create – in most cases putting some element of their goals and retirement plan at risk. Continue Reading…

The 5 Wealth Zones of Decumulation

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Here’s my latest MoneySense blog, which summarizes pension consultant Don Ezra’s presentation at the most recent meeting of John Por’s Decumulation Institute. Launched in 2014, other members of the Institute include retired actuary Malcolm Hamilton, finance professor Moshe Milevsky, Black Rock Canada’s Paul Purcell, former Black Rock CEO Bill Chinery, Investor Economics’ founder Earl Bederman, Cortex Consulting’s Tom Iannucci, actuary Clive Morgan, and Michael Peskin.  I attend both as an advisory member as well as the sole media representative.

As regular Hub readers may know by now, Decumulation is the opposite of Wealth Accumulation, a topic that will become increasingly important as baby boomers start leaving paid employment and start to embrace encore careers or traditional retirement. That’s why we have devoted one of our six major blog categories to Decumulation (coupled with Downsizing):

The blog can be found by clicking the above link, or below. But for the Hub only, John contributed the following summary of the meeting:

john_por
John Por

The Advisory Group discussed how financial advisors should approach retirees to maximize their income. Don Ezra has been working on a financial modelling tool that would allow financial advisors to plan individual saving and decumulation behaviour using a top down, longevity-based, multi-tier retirement income centred framework. The Advisory Group concluded such a tool would be a great step forward but warned that such a tool could be dangerous in inexperienced  hands if the potential dangers of additional risk taking were not highlighted. Don Ezra and John Por discussed their work on the concepts of what a training program for financial advisors should contain. Jon Chevreau suggested a new certification program may be another useful step to tackle this issue.

Continue Reading…

What’s the right amount of retirement income?

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MarieEngen
Marie Engen, Boomer & Echo

By Marie Engen, Boomer & Echo

Special to the Financial Independence Hub

“Money may not be the most important thing in life, but it’s way up there with oxygen.” – Zig Ziglar

How much is enough? That’s a question that’s asked often. Everyone measures the concept of “enough” differently. Some of us think in terms of dollars per month or year:

  • $50,000 per year
  • $5,000 per month

Or, you may think of a percentage of pre-retirement income:  70-85%.

Many want to know what the “average” Canadian needs, or what “most” people require.

The proper question is, “What is enough for me?”

Related: Budgets, Cash Flow Plans, and Spending. Yawn.

If you are retired, or close to it, I’m going to give you an assignment (should you wish to accept it).  Spend some serious time with this. You are going to make three budgets. Continue Reading…

Winning the Tax Game during Your Decumulation Years

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Tax Game Screenshot (800x496)We’re happy to present another Decumulation blog from the forward-thinking Doug Dahmer, which you can find below.

This instalment focuses on a very interesting web-based game that demonstrates how important tax planning is, particularly during your Decumulation years.

No doubt you’ll be shocked but not surprised to discover that the single biggest expense in Retirement will be income tax. Fortunately, there is more opportunity to take advantage of proper tax planning once you have begun to draw down on your nest egg. After you read Doug’s blog below, click on the links provided to view a 3-minute video on how to play the Retirement Tax Game. Then you’ll want to play the game yourself to see how well prepared you are for this daunting task. Note that you may be asked to download Microsoft Silverlight in order to play the game. — Jonathan Chevreau 

By Doug Dahmer,

Emeritus Retirement Income Specialists

Special to the Financial Independence Hub 

Many of our clients and friends still believe there’s  inherent fairness in government programs.

When I point out disparities in medical services, government contracts, municipal board decisions, welfare payments and the greatest of them all —  taxation —  I, sadly, waken them to the painful reality that lots of government programs just aren’t fair.

Too often in our first world, enlightened, democratic society it is still “What you know,” “Who you know” and “When you know.”

While I can’t help with many of the program disparities I can help in one and it’s the most important to you anyway: Taxation.

The greatest expense in retirement Continue Reading…

The Mathematics of Catastrophe

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dougdahmer
Doug Dahmer

By Doug Dahmer, Emeritus Retirement Income Specialists

Special to the Financial Independence Hub

I was not the best math student in the world but I certainly enjoyed numbers. I especially liked prime numbers and their unique indivisibility. I still cannot figure out how they come to be.

In the course of my retirement-income planning career I had another math lesson that now holds my interest even more. Here is the lesson. If you halve a number, you have to double the new number to get back to the original number.

Now put your income-generating capital into that equation and you will see why it holds my interest. If you are deriving income from X and it goes to 1/2 X … well, you don’t have to be Einstein to see the problem.

iStock_000034496492_Medium (640x427)When you draw a predetermined dollar amount from your investment portfolio and it drops by ½ you are about to experience the mathematics of catastrophe. Continue Reading…