Tag Archives: saving

Weekly Wrap: We ARE saving enough for retirement; CPP & Social Security Redux, frugal millionaires

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MalcolmHamilton
Malcolm Hamilton at MoneySense’s fall Retiring Rich event

Retired actuary and retirement guru Malcolm Hamilton this week released a C.D. Howe paper entitled Do Canadians Save Too Little? The Hub’s initial take ran Thursday here: It’s an exaggeration to say we are saving too little for retirement.

Hamilton also wrote a summary of the paper in the FP Comment section of the Financial Post on Thursday, bearing the title False pension assumptions on Canadian savings.

We at the Hub have always said frugality is the key to saving and ultimately building wealth. But according to the most-emailed New York Times article this week, it’s tough for millionaires to dump the frugal habits that got them there: Millionaires who are frugal when they don’t have to be.  Shades of the book, The Millionaire Next Door!

More (much more!) on Voluntary CPP Continue Reading…

C.D. Howe’s Malcolm Hamilton — it’s an exaggeration to say we are saving too little for Retirement

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Malcolm Hamilton (YouTube.com)

By Jonathan Chevreau

Financial Independence Hub

Don’t believe various reports that Canadians are saving too little for retirement, says C.D. Howe senior fellow Malcolm Hamilton in a report issued Thursday. You can get the full 30-page report on PDF by clicking here.

As is typical of Hamilton, now a retired actuary, the report is insightful and entertaining. While there are exceptions, generally speaking, “Canadians are reasonably well prepared for retirement,” he writes.

Right under the report’s Headline (Do Canadians Save Too Little?) the answer is delivered in small Italic type on the title page: “Reports of undersaving by Canadians for retirement are exaggerated. They rely on faulty assumptions, questionable numbers and ignore the diversity of individual retirement goals.”

Among the various reports cited, one is the Ontario Government’s backgrounders that served as its rationale for launching its own Ontario Retirement Pension Plan, more on which below. Continue Reading…

5.8 million working Canadians will see 20% drop in income in Retirement

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Benjamin Tal (CIBC)

Almost 6-million working Canadians risk losing the “retirement of their dreams,” according to a CIBC report getting lots of attention today at the Globe & Mail website. CIBC deputy chief economist Benjamin Tal (pictured) says some 5.8 million working-age Canadians will suffer at least a 20% drop in their standard of living once they leave the full-time work force.

The short article is listed as one of the most popular today on the site and has attracted dozens of comments and social media mentions.

Stop me if you think you’ve heard this before but it seems the bank believes the country’s retirement system needs to be reformed as quickly as possible. The most recent move in this direction came from an apparent about-face by the Conservative Government, whose apparent refusal to consider an expanded or “Big” CPP motivated the Ontario government to launch a new retirement system of its own, the ORPP or Ontario Retirement Pension Plan. Then last week, Finance Minister Joe Oliver floated a trial balloon for a “voluntary” expansion of the CPP, which the Hub reprised on the weekend.

Younger middle-income workers with no DB plans at risk

Mr. Tal told the Globe that “it’s not just CPP,” but expressed concern that Canadians still aren’t saving enough money. While many Canadians close to the traditional retirement age of 65 are “on a path to the retirement of their dreams,” Tal’s data also shows millions others, especially younger workers in the middle-income brackets, “are headed for a steep decline in living standards in the decades ahead.”

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The Battle between your Present and Your Future Self

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Robb Engen, Boomer & Echo

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.

Related: How much of your income should you save?

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Become financially independent to enjoy life!

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money problemsBy Good Nelly,

Special to the Financial Independence Hub

It is no longer a universal vision to work towards having a better retired life. Instead, everyone is trying to achieve financial security or independence. This means you should have sufficient resources so you can choose whether or not to work on a daily basis; or, you can choose work where you’ll get complete job satisfaction, instead of worrying about the amount of your monthly paycheck. Here’s a discussion about why you need to work towards having financial independence or “findependence,” and how you can achieve it.

Why should you make Findependence your ultimate goal?

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