Weekend Reading: Retirement Income For Life Edition

Weekend Reading: Retirement Income For Life Edition

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.

Weekend Reading:

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!

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  1. Murray on September 14, 2019 at 12:26 pm

    Tried the linked calculator, entered data, but scenarios just flashed and didn’t show results. That was with latest Firefox and Chrome browsers.

    • David on September 14, 2019 at 9:55 pm

      Didn’t work on my iPhone 6s also not much use if I am already retired

  2. Sugith Varughese on September 14, 2019 at 12:38 pm

    Gave up using calculator on my phone. Isn’t designed for phone and doesn’t hold data entered. A lot of other retirement calculators out there. This one isn’t even beta ready.

    • LHM on September 15, 2019 at 9:16 am

      I can’t even get passed the first 4 questions…doesn’t function…

  3. Jeff j on September 14, 2019 at 1:11 pm

    The calculator doesn’t work, entered all data and screen just flashed when displaying final results.

  4. Tracey H on September 14, 2019 at 1:18 pm

    The calculator worked fine for me (on Chrome on my laptop). It was interesting to see the 3 scenarios (I’ve already read the book so I’m familiar with them). I would have loved to put my actual investment fees into the data since they’re between the 0.6% and 2% mentioned. We’re also possibly expecting 2 windfalls (if we sell the house at some point, that’s #2), but there wasn’t a way to add 2 windfalls (I could have added them together, but we’ll likely receive them at least a decade apart).

  5. Robb Engen on September 14, 2019 at 1:27 pm

    Very interesting. It didn’t actually work for me either (same flashing, loading error – using Chrome on a laptop).

    Can I ask if you’re willing to share your age as well as your feedback (whether it worked or not)? The reason I ask is because of this statement on the main page of the calculator site:

    “The retirement income calculator is recommended for anyone who is relying heavily on retirement savings for their retirement security and who is now 50 or over and is considering retirement in the next few years. It is also applicable to anyone who has already retired.”

    Since I’m only 40, I wonder if that made a different in not being able to generate the scenarios.

    Of course, there are a bunch of inputs so that could just be a coincidence. I’ve passed along this initial feedback to Mr. Vettese.

    • Murray on September 14, 2019 at 5:55 pm

      Robb: Self-58, spouse-53 — scenarios flashed but not data

  6. Charlie on September 14, 2019 at 1:32 pm

    I tried the calculator link. I’m 57, retiring in 3 years and my wife is already retired. It would not allow my spouse who is retired to do any further TFSA contributions in a couples scenario. Would be even more helpful if the output showed the actual cpp/oas assumptions being used. How much is coming from each source of funds would be helpful. Do you know of any calculators that show this?

    Overall one of the better calculators that I’ve seen so far but could be improved with some additional detail which is in the assumptions so likely doable.

  7. Mary on September 14, 2019 at 1:39 pm

    I tried the calculator with IE and it worked ok. I’m 63 and both my spouse and I are retired. Like others, I have read the book and am using some, but not all enhancements. I couldn’t get the calculator to go beyond age 90. Mostly I just figured that if I used the worst-case scenario, that would give me a conservative amount to spend each year. My main question was whether or not the calculated spending amount for each year was pre or post-tax.

  8. Philip on September 14, 2019 at 1:50 pm

    I tried Calculator 3 times and did not work. First on IPad, then on laptop- Explorer and Chrome.
    I stated my age.

  9. Darrell Wells on September 14, 2019 at 2:11 pm

    Same as Jeff .. loaded the numbers and waited but nada results.

  10. Mario on September 14, 2019 at 2:27 pm

    The calculator did not work and showed an unresponsive page.

  11. Les on September 14, 2019 at 3:01 pm

    Same here….entered all the data—no results. Tried on an iPad. Spouse and I both 48/self-employed and aiming to retire at 55

    • Dave on September 15, 2019 at 4:48 pm

      Tried link and nothing opened

  12. Betty on September 14, 2019 at 3:01 pm

    It did not work for me either perhaps because I am 90!! I put in the info but no results

  13. Betty Therriault on September 14, 2019 at 3:05 pm

    Very disappointing – no results after digging for all the info!

  14. Robb Engen on September 14, 2019 at 3:28 pm

    3 for 12 so far. Not good! Sorry all – I thought it would at least give us the results and then we could add feedback on inputs and different scenarios. I guess it’s not ready for prime time. Disappointing, but I’ll share the feedback with Mr. Vettese and hopefully they’ll have it fixed and working soon.

    For anyone who’s made it this far but hasn’t tried the calculator yet, enter at your own risk as the odds of getting your results are pretty low at the moment.

  15. Michael Barkley on September 14, 2019 at 4:08 pm

    “Number of years you will have lived in Canada from ages 18 to 65” will not accept any values in Safari browser

  16. Michael Barkley on September 14, 2019 at 4:17 pm

    Another error under YOU column If you enter more than $700 in the CPP income field you get an error message that sates “maximum value is $700”. That must be fore OAS not CPP

  17. bryan in BC on September 14, 2019 at 5:07 pm

    I tried the calculator in the latest version of Chrome on my win 8.1 laptop. Ended up in wait mode for results after hitting “Next” after all my data entry was done; message was “Waiting for enhancement4.uat.morneaushepell.com…”

    Other notes:
    1. CPP – neither wifey nor I are collecting and we’ve both passed age 65; entered expected amount as a percentage of max. as per Service Canada on our 65th birthdays.
    2. OAS – again, neither of us are yet collecting. Entered $0. We both expect full OAS when we get it, plus that 0.6%/month bump past age 65.
    3. I have an RDSP and receive annual income from it; as a workaround, I entered the value of my RDSP with my TFSA amount (n.b. RDSP does get some taxation on withdrawal).
    4. Wifey has a DB pension. I assumed I was to enter GROSS amount of her pension and not the net amount.
    5. Although I am no longer working, I do receive Dividends from my corporation, and will do so for a number of years yet. The web page asked for ’employment income’, which is a different animal than dividends.
    6. Continuing TFSA contributions are limited by the number of years expected to work … In our case, I fully expect that we’ll be able to contribute for many years yet, although neither of us now works.

    I look forward to the fixes!

    bryan in BC

  18. Mary Mackenzie on September 14, 2019 at 5:09 pm

    Much like many, I was only able to get to step 8, where, after a few minutes, I got a message stating “page unresponding”. I tried it a few ways, since my spouse and I have some investment rental properties and there wasn’t a way to add more than one property. I had also added an additional windfall. I tried it as a single person and just haved the key numbers, and still could not get results. I used a MS surface, and I am over 50 years.

  19. JohnF. on September 14, 2019 at 5:20 pm

    I entered all the date and came to the 3 result pages only to wait and wait and wait some more. The promised pages never came up, waited for 20 minutes.
    Could be the connection, but not likely considering the comments.
    However, will try again tomorrow.

    Something else that doesn’t work for me Robb, is to get my free ticket to the Canadian Financial Summit.
    This I tried several times as well over several days. The only thing I can get to work is the “Full pass”. When I click on the free ticket link it just puts me back on the same page, nothing changes.

  20. LH on September 14, 2019 at 6:14 pm

    Calculator very glitchy for me too – used Firefox and Chrome.

  21. gwt on September 14, 2019 at 7:20 pm

    No results after 5 minutes.
    Slow to save entries before allowing next one.
    Is pension income gross or net after tax?

  22. Matthew on September 14, 2019 at 9:23 pm

    Tired of seeing Ben Felix self-promotion screen caps here…seriously.

  23. fbgcai on September 15, 2019 at 8:56 am

    Died on second page – back to the drawing board – laptop win10 chrome
    maybe testing BEFORE releasing to the wild is good idea?
    puts a diggling doubt as to validity if basic functionality cannot be achieved – what else is broken/wrong?

  24. Dan-O on September 15, 2019 at 9:04 am

    Retirement calculator page is broken. Doesn’t speak well for the competence of the firm if they don’t follow basic testing before putting something out there. Business 101…

  25. sparker on September 15, 2019 at 4:15 pm

    I tried with 2 different browsers. I couldn’t get it to display any results. It also jumped around on the page each time I pressed enter.

  26. Brian Lorch on September 16, 2019 at 7:47 am

    I receive 1154 per month in CPP but when I enter that number, I am told the maximum amount is $700.

  27. Ricanja on September 16, 2019 at 1:49 pm

    It worked fine for me, both today and on Saturday. The only thing it did was consistently make my spouse a female even though I checked the male box and the CPI on my little pension was printed incorrectly. I put in 1.5% for the increase due to the CPI and it calculated it as 100%.

  28. Jerald Fuller on September 17, 2019 at 10:48 am

    Forms all worked correctly, and responsively for me on a desktop with Chrome.

    I found the analysis fine, but for it lacking in only being able to treat my 3 investment properties as a single investment. I don’t plan to sell them all at the same time so the form didn’t account for that.

    Also the form, probably intentionally, does not allow for the value of your current home and the possible strategy of downsizing in the future to harvest some savings.

    But it worked well for me.

    Thank you, I appreciated the form.

  29. T on September 19, 2019 at 11:14 am

    I used the link I found on their website( https://www.morneaushepell.com/ca-en/insights/retirement-income-life ) instead of the beta version and the calculator worked for me.


    instead of

    https://enhancement4.uat.morneaushepell.com/ (the beta/uat version didn’t work for met)

    The book suggests everyone to put 30% of their money into an annuity but seems like an annuity would be way less return than other investments?

    I would have liked to see more information on different de-accumulation strategies. The book says to use all non-registered money before using RRIF and TFSAs. But I think it depends on how much you have in your RRSP and future taxes. Might make sense to collect dividends in non-registered, withdraw min RRSP and keep buying TFSA.

  30. Gin on September 19, 2019 at 2:51 pm

    Worked fine for me today on my laptop using Chrome.

  31. Bob Lin on September 20, 2019 at 11:06 am

    September 20th: still not working!

    Ages 56 and 54

    Firefox on Windows 7

  32. Kath on October 1, 2019 at 11:52 am

    Working fine now except:
    1.keeps changing male spouse to female spouse in column 2 ( prefer to keep him male, lol)
    2. Mysterious green pension amount shows up at age 61, in scenario 2, even though not taking govt pensions until 65 (oas) and 70 (cpp). If it represents assumed annuity payments, fine, but then it goes away at age 62.
    Can’t tell when recommended annuity purchase supposed to take place.

  33. Curt on October 4, 2019 at 5:42 pm

    Tried it today. Worked fine. Interesting results. Not able to enter savings and investments, including TFSA for myself and spouse post retirement. Hidden until until summary. Seems to presume full expenditure, no savings or investing post retirement for me and/or spouse.

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