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Always Try to Keep the Odds in Your Favour

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Illustration depicting a highway gantry sign with a healthy lifestyle concept. Blue sky background.By Michael Drak

Special to the Financial Independence Hub

Recently, Globe & Mail personal finance columnist Rob Carrick wrote an article entitled ‘It’s time to get real about retirement planning.” In it he stated that people should not count on working past retirement age because many will not be able to do so due to health issues. Everyone that knows me is aware that I’m a big promoter of continuing to work at something you love, for as long as you can, so this article really caught my attention and got me to do some serious thinking. The following are the conclusions that I came up with:

Always try to put the odds in your favour

Want to increase the odds of extending your work life past the normal retirement age? You need to adopt a healthy lifestyle as early as possible. Most of us know what to do but for whatever reason fail to do it. You need to keep active, work out on a regular basis, eat the right foods, and stay engaged. Odds are you will live enjoy a longer and happier life than your smoking neighbour whose retirement is based on watching tv and drinking lots of beer to help kill the boredom.

Chronic Stress will eventually take its toll

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How pairing fee-only planners and robo-advisers can save you money

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Woman meeting financial adviser in officeCute Robot

By Robb Engen, Boomer & Echo

Special to the Financial Independence Hub

The financial services industry would have you believe that individual investors don’t want to pay upfront for investment advice – in fact, the industry claims that investors prefer to pay for financial advice through fees that are part of their mutual funds.

But we all know mutual funds in Canada cost too much and the relationship between investors and financial advisors is mostly transactional in nature. Embedded commissions and trailer fees might make sense for investors who are just starting out, but over the long term this conflict of interest will be expensive and lead to poorer outcomes for investors.

An unconventional pairing

With the relatively new arrival of fee-only financial planners – advisors who don’t sell products but offer unbiased and objective financial advice for a set fee – and the emergence of robo-advisors – online investment management services – there is an opportunity for Canadians to access a better form of financial advice that costs less than the traditional bank advisor-mutual fund model.

That’s right, pairing a fee-only financial advisor with a robo-advisor (or DIY, if that’s your thing) can actually save you money and lead to better investor outcomes.

Here’s an example Continue Reading…

Lessons from the 2015 White House Conference on Aging

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On Tuesday, Challenge Factory held a briefing via teleconference to update Canadian organizations interested in demographics, aging and longevity on the recent 2015 White House Conference on Aging, held on July 13th. For the Hub, Challenge Factory president Lisa Taylor adapted her remarks for the guest blog that follows. – JC

lisataylor
Lisa Taylor, Challenge Factory

By Lisa Taylor,

Challenge Factory

Special to the Financial Independence Hub

I first met Nora Super, CEO of the 2015 White House Conference on Aging last November when I was a speaker at a large symposium in Arizona focused on the aging workforce. It was my distinct honour to speak with the conference team in the weeks before the event and to participate as the only Canadian host of watch parties.

In 1961, Present Kennedy had the foresight to convene the first ever White House Conference on Aging – and he ensured that at least once a decade Congress was obligated to hold the event as a way to ensure the complexities and opportunities longevity offer were considered from a social, economic, environmental and legal perspective. “Science,” Kennedy is quoted “has added years to our life. Our task is now to add life to those years.”

50th anniversary of Medicare & Medicaid

This year’s conference happened in the year that marks the 50th anniversary of Medicare, Medicaid, and the Older Americans Act, as well as the 80th anniversary of Social Security. Organizers stated “The White House Conference on Aging is an opportunity to recognize the importance of these programs, highlight new actions to support Americans as we age and focus on the powerful role that technology can play in the lives of older Americans in the decade ahead.” Continue Reading…

Expanded CPP may not increase retirement income: Fraser Institute

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cpp_image2As the Globe & Mail and Financial Post both  reported Tuesday, a new study by the Fraser Institute finds that an expansion of the Canada Pension Plan (CPP) may not raise incomes of retirees because people will save less on their own.

The report, which is to be released today, found that private savings fell as CPP contribution levels rose between 1986 and 2008. CPP contribution rates were 3.6% of earnings in 1986 (half from employers, half from employees) and rose to the current combined level of 9.9% by 2003.

Impact varies with income and age

The study found the impact of higher CPP contribution rates varies with income and age. So for households with annual income under $34,140, a one percentage-point increase in contribution rate resulted in a 1.56-percentage-point fall in private savings. But middle-income households earning up to $59,920 cut their savings by 0.72 percentage points: less than the full amount of the CPP increase. And high-income earners making over $59,920 were found to have almost no change in their saving rates as CPP rates rose.

The report’s co-author, Charles Lamman told the Globe that relatively few Canadians are under saving for retirement: mostly the elderly, widows and singles, and those without a work history that makes them eligible fort the CPP. So for those people, a CPP expansion would not be helpful.

The Financial Post version of the story can be found here. The Post also ran a piece by the report’s authors on its FP Comment page: Shifting Retirement Savings. You can also view a video commentary on the report on the Fraser Institute’s website, here.

Vinnie the Loan Shark: Citizen of the Year

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Depositphotos_3775528_s-2015
Vinnie the Loan Shark (DepositPhotos).

By Horst Siegler

Special to the Financial Independence Hub

The most important definitions are not found in the dictionary; they are the ones you make for yourself to serve your purposes.

You first encountered this idea when your mother told you to clean your room. When you thought you were done she made you clean it some more. The problem was not with the room; the problem was she had a different idea of what a clean room meant (it didn’t mean shove everything under the bed or into the closet and close the door). Besides, you wanted to get outside to play and she wanted the room tidy.

In a posting titled How Findependence differs from Retirement, Jonathan Chevreau makes a case for how he believes the two words are different and why. He argues that you might be financially independent before you retire because you no longer work for a salary. Some who retire need to continue to work because their income doesn’t meet their needs. His definitions for the words are his own.

Credit cards as “survival tools”

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