By 2 Cents on October 13th, 2011 | Category: Retirement |  The following is a guest post. Please go ahead and share your own thoughts in the comments section.
The current recession and bear market has created difficulties and decisions for private investors across the board, but reactions are slightly different depending on one’s age. Older investors have been switching over to safer investments, such as bonds and CDs. Middle age investors, reaching the peak of their earning potential, have sought to diversify their portfolio while riding the recession out. But what about younger investors? I’m talking about those people who are in their twenties or thirties, have only recently moved into stable jobs, and have limited investments in the market – if they have any at all. Should this demographic start investing now, when the market is low? Or should they wait until the economy is healthier before putting their money in?
Someone in that age range should [...]
Read on and enjoy … You’re Young. The Economy is Bad. Time to Invest in the Stock Market?
By 2 Cents on February 25th, 2011 | Category: Retirement |  [Ed Easterling of Crestmont Research] favors us with yet another book, called Probable Outcomes: Secular Stock Market Insights, in which he takes on the mostly silly research, done by so many analysts, that purports to show what an investor can expect to make from his retirement portfolio over time. I can’t tell you how disastrous this simplistic analysis can be for retirees.
~ John Mauldin
Update: This article was included in the Wealth Builder Carnival #30 at Wealth Builder as well as the Carnival of Financial Planning #174 hosted by The Financial Blogger. Thanks!
I’ve got some Friday Food for Thought for you this week that fits in nicely with our recent discussion on passive investing and the dangers of investment dogma. It comes to us courtesy of John Mauldin’s most recent installment of Outside [...]
Read on and enjoy … Safe Retirement Withdrawal Rates and Probable Outcomes
By 2 Cents on January 24th, 2011 | Category: Retirement |  The conventional view serves to protect us from the painful job of thinking.
~J.K. Galbraith
Update: This article was included in the Canadian Personal Finance and Investing Carnival #14. Thanks!
January is already coming to a close and February will soon be upon us. In the Canadian financial realm, that usually means a mad dash by financial advisors and journalists to remind us that we only have a few weeks left to make the obligatory contribution to our RRSP, or face the reality of dining on Tender Vittles in our golden years. This year, however, there seems to be a bit of an RRSP backlash, with more than one article taking a not-so-fast tone to contrast the steady “RRSP now” drumbeat pounded out by some members of the financial services industry and media.
Recently, Jon Chevreau of the Financial Post reviewed [...]
Read on and enjoy … 5 Reasons to Skip the RRSP Contribution this Year
By 2 Cents on August 16th, 2010 | Category: Retirement | The following is a guest post by Frank Wiginton CFP, FMA, CIM, FCSI.
I want to start off by saying that I am not advocating anything that could get you put away! What I am recommending is that you speak with your parents about saving them thousands in taxes throughout retirement. Those who are in retirement may be paying too much in taxes on money they will never use!
The big question most people in retirement have is “Will I run out of money?” There is a great calculator on the home page of my website at www.frankwiginton.ca that will tell you whether you will run out of money, and if not, how much you will still have left as an estate. It will also tell you approximately what your lifetime tax bill will be. You will likely be surprised by the numbers – many are!
So [...]
Read on and enjoy … Get Your Inheritance Early – And Other Ways Your Parents Can Save Thousands in Taxes in Retirement
By 2 Cents on August 11th, 2010 | Category: Retirement | The following is a guest post by Jim Yih, a fee-only advisor, best-selling author, financial expert, and syndicated columnist. Currently, Jim specializes in putting financial education programs into the workplace. For more information you can visit his websites at Retire Happy or Wealth Web Gurus.
Variable Returns Create Timing Risk
One of the problems of return projections in the financial industry is that most of the math is modeled on a straight line. For example, the math on a 7% average return really assumes that you make 7% per year each and every year. If you think about it, the rate of return is really the slope between 2 points – a start point and an end point. If you had a 9% return, the slope would be steeper. If you had a 5% return, the line would be flatter.
[...]
Read on and enjoy … Variable Returns Can Work Against You in Retirement
By 2 Cents on January 28th, 2010 | Category: Retirement | Life is not long, and too much of it must not pass in idle deliberation how it shall be spent.
~ Samuel Johnson
Our series on RRSP Basics continues today with some information on how and when to take money out of your RRSP.
Withdrawing Money Before You Retire
The idea behind RRSPs is that you won’t be taking any money out until you retire. But as we all know, life happens. Here’s how it works if you encounter an emergency where you absolutely need to take some of your money out:
Any money you take out of your RRSP will be added to your income at your marginal tax rate in the year you withdraw it. Your withdrawal will be subject to a withholding tax which will be deducted by your financial institution. The withholding rates for Canadian residents are as [...]
Read on and enjoy … RRSPs: Taking Money Out
By 2 Cents on January 26th, 2010 | Category: Retirement | The road leading to a goal does not separate you from the destination; it is essentially a part of it.
~ Charles DeLint
Yesterday we began a series on RRSP Basics with a primer on what an RRSP is and who should use them. Today, we’re going to look at where you can get them, what you can put in them, and how to decide what you should put in them. There are a few types of RRSPs that you can get:
Basic: These are usually provided through an advisor affiliated with a mutual fund dealer or bank who offers advice on where to invest your money. Self-Directed: These [...]
Read on and enjoy … RRSPs: What Should You Put in Them?
By 2 Cents on January 25th, 2010 | Category: Retirement | Warning: Dates in Calendar are closer than they appear.
~ Author Unknown
Registered Retirement Savings Plans (RRSPs) were introduced by the Government of Canada in 1957 as a means of encouraging Canadians to save for retirement. That need has only grown over the decades as corporate pensions have been cut and the number of companies matching contributions has dwindled.
Many pension plans took a huge hit when the stock market fell in 2008 and 2009. Although they have since recovered a lot of their losses, the crash reminded us that money in the stock market is money at risk.
To make matters worse, Canadians have been saving less, taking on more debt, and keeping that debt on their balance sheets for longer than in the past. In October of 2009, The Globe and Mail ran an excellent series entitled Retirement Lost which outlined many of the [...]
Read on and enjoy … RRSPs: Who Needs Them?
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