I’m on record saying that every Canadian retiree and soon-to-be retiree should read Retirement Income For Life by Fred Vettese. It offers five clear strategies for making the most of your accumulated savings and turning it into predictable, sustainable retirement income.
In the book, Mr. Vettese refers to an online calculator to help Canadians take the concepts outlined in the book and put some personalized context to them. The calculator has been totally revamped and is now in the beta-testing phase. I offered to share the link so our readers could test it out and offer any feedback on the enhancements.
“The biggest change is that it now contemplates someone doing the calculation up to 10 years before actual retirement so it shows their income from all sources (including employment) both before and after retirement and moreover recognizes the deductions for employment expenses, RRSP and pension contributions etc. in the pre-retirement period.” – Fred Vettese.
Some of the other improvements:
- It shows the impact of adopting the three main enhancements. It does this by showing both Before and After scenarios.
- It can now be used by people who are as many as 10 years away from retirement, and hence who still have earnings and are making contributions to RRSPs and pension plans, not just those retiring immediately.
- Existing debt (like an outstanding mortgage) is recognized.
- It now recognizes that an investment property (e.g. a condo one is renting out) may be an investment, not just stocks and bonds.
- It allows for future windfalls, like an inheritance or money that becomes available from downsizing a house.
- It takes into account the possibility that income tax may be payable if one liquidates investments that are not tax-sheltered.
Here’s a link to the beta version which will be live until September 21, after which they will make adjustments based on your feedback.
- Calculation tool: Retirement Income for Life <—Update: The calculator has not been responsive for the vast majority of readers this weekend. I’ve given that feedback to Mr. Vettese and he says the firm will look into it on Monday.
If you use the tool and complete your calculation can you please leave your feedback here in the comments section? I can then point Mr. Vettese to the collective feedback in one location.
This Week’s Recap:
I managed one post this week: Save More Tomorrow – The Procrastinator’s Guide To Saving Money.
I was all over the internet this week, though. First up on Global News I shared my thoughts with Erica Alini on how quickly to pay off your student loans. The short answer is, don’t rush into an aggressive pay-down schedule and forget about the rest of your budget.
Next, Justin Bender from PWL Capital answered a question from me about when it makes sense to switch from Canadian listed ETFs to U.S.-listed ETFs to save on foreign withholding taxes, currency conversion, and MER. Justin did a great analysis of the simple way (my current VEQT portfolio) and the more complex, but cheaper solution (using U.S.-listed ETFs) and gave me a lot to think about.
Finally, in my Toronto Star Smart Money column, I wrote about the best credit cards for a student budget.
Also, remember to get your free ticket today to access the Canadian Financial Summit. This year’s conference takes place online from September 26-28, 2019. You’ll be able to watch an all-star panel of 25+ Canadian personal finance experts, including yours truly, discussing every personal finance topic under the sun.
A very relevant post from Mark Seed in light of Justin Bender’s analysis on U.S.-listed ETFs. Mark shares how to exchange Canadian to U.S. dollars using a strategy called Norbert’s Gambit.
No question, Stephen Weyman at Credit Card Genius does the most thorough analysis on the Canadian credit card rewards and loyalty point landscape. Here he looks at which Canadian rewards program is worth the most.
Travel expert Barry Choi at Money We Have shares what first time flyers need to know.
Late starting on your RESP? Million Dollar Journey blogger Frugal Trader shows you exactly how to catch up.
Jeff Rose, the U.S. advisor and blogger behind Good Financial Cents, hilariously (and accurately) lists seven advisors he’d like to punch in the face:
“I’ll share some financial advisor horror stories that other clients have shared with me, the lessons learned, and let’s just see if you would want to pull a Rocky Balboa on their face, too.”
Dale Roberts stirred up a hornet’s nest with this hypothetical question: Will the CRA eventually tax your Tax Free Savings Account? I hope not.
Speaking of stirring things up, Ben Felix took another run at dividend investors with his latest video explaining the irrelevance of dividends:
In summary, Ben says, “Even in a stock-picking environment, there is no reason to believe that dividends, or the growth of dividends, would be an indication of a good stock to own.”
Financial Consultant Aaron Hector has done some excellent work analyzing CPP and OAS. His latest looks at OAS clawback secrets for those with a high net worth.
How to tell if someone is a financial expert? Nick Magguilli offers the Financial Turing Test.
Relevant for me after my recent rental car fiasco: Will my credit card cover me if I crash a rental car?
Knowing the future wouldn’t help you pick the right mortgage. Why? Rob McLister shares the power of short terms.
Finally, Rob Carrick nails it when he says this country needs to help renters more than it needs another program to help home buyers.
Have a great weekend, everyone!