Victory Lap

Once you achieve Financial Independence, you may choose to leave salaried employment but with decades of vibrant life ahead, it’s too soon to do nothing. The new stage of life between traditional employment and Full Retirement we call Victory Lap, or Victory Lap Retirement (also the title of a new book to be published in August 2016. You can pre-order now at VictoryLapRetirement.com). You may choose to start a business, go back to school or launch an Encore Act or Legacy Career. Perhaps you become a free agent, consultant, freelance writer or to change careers and re-enter the corporate world or government.

Findependence — Free at last from the corporate chains

Posted By Michael Drak | August 20, 2016

Friday July 29th will be a day that I will remember for the rest of my life. After thirty-eight years, I finally packed in my banking career. I suppose my co-author Jonathan would call this my Findependence Day!

To be honest, it will take some getting used to as my banking job played an important role in my life. It provided financial security for my family and gave me a good reason to get out of bed most mornings.

My career, like most careers, had its good and bad points. Overall though, it was a good ride and one that I will miss to some degree, but I had to leave in order to publish Victory Lap Retirement and create my blog.

Banks really don’t like it when employees write books or blogs because it might not align with the story that they are trying to convey. Banks get nervous when employees stand out and don’t fit in, when employees invent something that is outside the approved message.

Banks are very protective of their brand. They want the customer experience to be the same in every branch across the country. They want every employee to talk, walk and act the same. They desire a high degree of predictable sameness, as it’s easier to control.

Why banks still sell the old version of Retirement

Retired Money: Why I won’t defer my OAS past age 65

Posted By Jonathan Chevreau | August 18, 2016

My latest MoneySense Retired Money column is about when to take Old Age Security (OAS) benefits and has been posted at MoneySense.ca. Click on the highlighted text to access the full version here: Why I’m taking Old Age Security right at 65.

As the piece goes into in more depth, the Government incentivizes those in their 60s (including Yours Truly) to defer the date for commencing receipt of benefits of the Canada Pension Plan (CPP) and Old Age Security. The longer you delay between 65 and 70 (or in the case of CPP, beyond age 60), the better the ultimate payout: wait till 70 instead of 65 and OAS will be 36% higher and CPP 42% higher.

Reasons for Deferring CPP may not also apply to OAS

However, the circumstances surrounding CPP and OAS are not identical, so in my own case I plan to take OAS as soon as it is on offer, less than two years from now, while I will endeavour to defer starting the receipt of CPP for as long as I won’t need the money.

Sorry Boomers, as FinTech rises, Millennials now main focus of financial industry

Posted By Jonathan Chevreau | August 12, 2016

As I recount on page FP3 of today’s Financial Post, the baby boomers are fast becoming supplanted by the Millennial generation when it comes to attracting the attention of the financial services industry and in particular the rise of the fintech industry.

For online version, see Sorry boomers, the focus is shifting: Millennials are fast becoming new apple of financial industry’s eye.

Certainly, much of the action around so-called “Fin-Tech” is oriented to the Millennial market, with many of the firms also founded or cofounded by Millennials. The big three fintech categories are online lending, robo-advisers and payment technology.

Note the New York Times had an interesting piece this week on fintech and blockchain: Envisioning Bitcoin’s Technology at the Heart of Global Finance. Also note my Hub review of Don Tapscott’s groundbreaking book on blockchain, with a link to a video: Book Review: Blockchain Revolution.

YOLO: the new Millennial motto?

Also in the FP package today is a review of a book written by a Millennial that addresses Millennials: You Only Live Once, otherwise known as the popular millennial slogan YOLO.

Rediscovering your Inner Child in your Victory Lap

Posted By Michael Drak | August 10, 2016

The other day I was talking to a gentleman about how, in our Victory Laps, we have the opportunity to start living like a kid again. He thought that was a little weird, but I think I finally won him over by triggering some long forgotten memories in him.

Remember back to when you were a kid in school. Back then, we had no fears and anything seemed possible. We dreamt such big dreams, like competing in the Olympics or becoming the president of a large company.

Life used to be such an adventure back when we were young but unfortunately over time we tend to bury our hopes and dreams, deep down inside us. We are driven to obtain financial security for our families and save up enough for eventual retirement but at some point we allow ourselves to be assimilated by our jobs and start following the crowd.

We end up acting like everyone else, without knowing exactly where they are taking us, and live by rules drawn up by someone else. As a result, many people just sit back and watch their dreams slowly wither and die. They follow the same dull, boring daily routines, and feel overwhelmed by the pace of their lives, their jobs, debts owed and family obligations. When we allow our dreams to die our soul isn’t far behind.

Young people have little in the way of financial resources, but seem to have the ability to live where they want, travel where they want, and have no fear of doing what they want to do in life. We can learn (perhaps re-learn is a better word) a lot by watching and listening to our kids.

The challenge we boomers face is to find a way to open our minds and take a new approach to life as our past experiences and old prejudices keep getting in the way. Don’t settle for just getting by and start looking at the world with fresh eyes. We all need to start living again just like when we were kids.

If You Don’t Do It Now, You Never Will!

Working part-time in Semi-Retirement a boon to finances

Posted By Jonathan Chevreau | July 28, 2016

I predict that many aging Baby Boomers will — either by preference or financial necessity — delay traditional full-stop Retirement and instead embrace Semi-Retirement.

My latest Retired Money column, which has just been published at MoneySense.ca, explores the positive effect on retirement nest eggs of working at least part-time after the traditional retirement age of 65. For full article and chart, click on Should you work part-time in retirement?

It’s based on an analysis by ETF Capital Management, which showed the powerful impact of earning just $1,000 in part-time income each month between the age of 65 and 75; or in the case of couples $2,000 a month between them.

Not working at all after the traditional retirement age of 65 has financial implications, never mind boredom and lack of social interaction. In the case of a retiree with lifestyle expenses of $60,000 who undertakes a full-stop retirement at 65, and earns no extra income, there is a sharp fall in a $500,000 (combined registered and non-registered) portfolio starting at age 65. By the time they reach their early 80s, the nest egg is depleted to zero.

But a couple earning just $2,000 a month between them part-time after 65 and going until 75 will find the extra income delays the portfolio’s drop below zero beyond their early 90s. Not only does the nest egg not decline the first ten years, but it actually rises! By the time you reach 75 and finally stop working even part-time, the portfolio declines from a higher level and much more gradually.

Of course, the more you work, the better: for a couple earning $3,000 a month between them, the portfolio still has more than $200,000 by their 90s! Similarly, the analysis also shows what happens if you work extra hard, which many might argue wouldn’t even qualify as retirement. At $4,000 a month the portfolio is barely depleted at all by the time they reach 100!

Isn’t this really Semi-Retirement?

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