Tag Archives: income

Protecting Your Nest Egg In Retirement

Posted By Financial Independence Hub | July 9, 2015

By Marie Engen, Boomer & Echo

Special to the Financial Independence Hub

Investors who are in, or near, retirement are in a difficult position. They need their investments to provide them with steady cash flow to live on, but they also need their wealth to last for a potentially long life.

Retirees who are caught in a bear market don’t have the time to wait out temporary dips in stock prices, even if they have a greater risk tolerance. Being forced to sell investments that have plummeted in order to provide money to live could have a devastating effect on the sustainability of a portfolio.

Some investment advisors are mobilized to guide their pre-retirement clients out of equities and into bonds, in an effort to offer income and stability. But now that interest rates have reached historical lows, traditional bond portfolios will have a difficult time providing an acceptable level of income while protecting purchasing power over the next 25 to 30 years.

Structure your portfolio for both short- and long-term needs

You think accumulating wealth was hard? Try this.

Posted By Financial Independence Hub | June 29, 2015

By Doug Dahmer, Emeritus Retirement Income Specialists

Special to the Financial Independence Hub

How you deploy your accumulated assets to fund the second half of your life is much harder than how you built them up in your accumulation years.

Read this again if you need to, but be sure you get this point.

First build an asset pool under the spell of “Dollar Cost Averaging over the long-term” — the favorite aphorism of the investment management salesperson. For the 30-odd years of your prime saving and accumulation years this mantra encourages you to keep giving money to them, disguises bad performance and promises you future success. Given enough time, however, let’s hope you have more than when you started.

That’s the easy part.

The hard part: making it last a lifetime

Conscious Clients don’t put Retirement plans at Risk

Posted By Financial Independence Hub | June 1, 2015

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

Posted By Jonathan Chevreau | May 20, 2015

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

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.

What’s the right amount of retirement income?

Posted By Jonathan Chevreau | April 30, 2015

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?”

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…

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