Guiding You to Retirement
As COVID-19 rocks the economy in an unprecedented black swan event, retirees and those who are preparing to retire need answers to pressing questions about their financial futures. Originally published in 2018, the second edition of Retirement Income for Life, has been completely revised and updated, and now includes:
New chapters on early retirement, retiring single, what to do when one spouse dies young, and more.
Three strategies for mitigating your personal financial risk in the current downturn in equities and other investment products.
Advice on how to plan for (and even benefit from) the coming bear market, resulting from COVID-19, which will create unprecedented equity buying opportunities, possibly as early as 2021.
Information on the impact of unbearably low interest rates on annuities and fixed income investments and what to do if you hold them.
The reasons retirees should be deferring CPP until age 70 and why the case for this is stronger than ever.
Author Frederick Vettese demystifies a complex and often frightening subject and provides practical, actional advice based on five enhancements the reader can make to mitigate risk and secure their financial future. With over one thousand Canadians turning 65 every day, the cultivation of good decumulation practices – the way in which you draw down assets in retirement, ideally to have a secure income for the rest of your life – has become an urgent matter that no one can afford to ignore.
Retirement planning is difficult enough without having to contend with misinformation. Unfortunately, much of the advice that is dispensed is either unsubstantiated or betrays a strong vested interest. In The Essential Retirement Guide, Frederick Vettese analyses the most fundamental questions of retirement planning and offers some startling insights. The book finds, for example that:
Saving 10 percent a year is not a bad rule of thumb if you could follow it, but there will be times when you cannot do so and it might not even be advisable to try.
Most people never spend more than 50 percent of their gross income on themselves before retirement; hence their retirement income target is usually much less than 70 percent.
Interest rates will almost certainly stay low for the next 20 years, which will affect how much you need to save.
Even in this low-interest environment, you can withdraw 5 percent or more of your retirement savings each year in retirement without running out of money.
Your spending in retirement will almost certainly decline at a certain age so you may not need to save quite as much as you think.
As people reach the later stages of retirement, they become less capable of managing their finances, even though they grow more confident of their ability to do so! Plan for this before it is too late.
Annuities have become very expensive, but they still make sense for a host of reasons.
In addition, The Essential Retirement Guide shows how you can estimate your own lifespan and helps you to understand the financial implications of long-term care. Most importantly, it reveals how you can calculate your personal wealth target – the amount of money you will need by the time you retire to live comfortably. The author uses his actuarial expertise to substantiate his findings but does so in a jargon-free way.
In the face of government changes, financial market volatility, and an aging workforce, Canadians are understandably concerned about the impact on their finances and their future retirement. This reassuring book debunks the generally-accepted claims about necessary savings rates, which can cause paranoia among those beginning to contemplate retirement. The authors offer greater insight into planning approaches that are not widely understood, demystifies retirement targets (age, savings, income), and outlines concrete approaches to maximizing retirement savings.
Offers practical advice for dealing with the changes to Canada's retirement system
Includes advice for calculating your Neutral Retirement Income Target
Contains solid financial advice in accessible language
Written by the Executive Chairman and Chief Actuary of Morneau Shepell Canada's national actuarial consulting firm