October 07, 2021

Could you afford to live to be 100 years old?

Forget being retired for 20 or 25 years: How about something closer to 50 years?

Science fiction? Not necessarily. In fact, it could happen within our lifetimes, maintains Alex Zhavoronkov, the author of The Ageless Generation: How Advances in Biomedicine Will Transform the Global Economy.

There are several specific technology trends that will undoubtedly make us live significantly longer than our parents and grandparents, he claims. In fact, it's already happening.

Today, the average 65-year-old has an average life expectancy of 19 more years — approximately age 84. But half of all individuals live longer than the average life expectancy. In fact, one out of every four 65-year-olds will live past age 90, and one out of ten will live past age 95.

But that longevity comes at a price, the two primary concerns being declining health and the ability to create a sustainable retirement income that may need to last decades more than expected.

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September 26, 2021

One in five Canadians expect they'll be working forever: report

Today's retirement challenge? Too much life, not enough savings.

So much so, that nearly one in five Canadian workers (17%) are fairly sure they'll never be able to afford to retire fully, according to study released by global bank HSBC.

Among the 15 countries surveyed, Canada had one of the largest proportions of workers who feel this way, followed closely by the United Kingdom (19%) and United States (18%).

Of those who are divorced or separated, the number jumps to 24% -- another indicator that so-called grey divorces, where a growing number of people are ending their marriages in their later years -- continue to crimp retirement plans.

Late-in-life divorce means that there's much less time to rebuild retirement assets and the numbers are startling.

The divorce rate among middle-aged and older adults has doubled during the past two decades, and the rate was 2.5 times higher for remarriages than for first marriages, according to figures from the National Center for Family & Marriage.

 Whereas if you were younger, in your 30s or 40s and you’re involved in a divorce and division of assets, there is still some time left to rebuild those assets,” she said.

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September 18, 2021

Government trims benefits for retired public servants

Hands off our benefits!

That’s the rallying cry being heard among retired public servants worried that the federal government is going to make good on its threat to reduce some of their retirement benefits

In its last budget, the government did announce that it intended to review retirees’ benefits, including pensions, health and dental care, and life insurance. And it's making good on its promise.

At issue right now is Treasury Board’s proposal to double the premiums that retired public servants pay for the public service health care plan while also limiting their eligibility to join the plan.

The government wants retirees to pick up half of the cost of contributions to the heavily subsidized health plan rather than the 25% they pay now. It also wants that the minimum years of service required to join to be extended to 10 years from the current two.

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September 16, 2021

Fewer Canadians living from paycheque to paycheque: report

Despite nagging concerns, Canadians' finances have actually improved in the past year, with fewer people living paycheque to paycheque and more even managing to put some money aside, according to a recent poll by the Canadian Payroll Association.

The survey suggests that 42% of Canadians would be in financial difficulty if their pay was delayed by even a week. And, while that's a grim statistic, it's actually the goods news. Last year, 47% said they were just making ends meet

Either way thiough, that's an alarming number of people who could be one car repair or dental bill away from financial disaster. The survey says 40% of employed Canadians are spending all of – or, in many cases, more than – their net pay.

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September 05, 2021

Longer life expectancy poses threat to pension plans: report

New figures confirm that life expectancy in Canada has increased — a trend that poses a threat for pension plan sponsors and, ultimately, for plan members.

According to updated mortality tables recently released by the Canadian Institute of Actuaries, the life expectancy of a 60-year-old male today has increased by 2.9 years — from 24.4 to 27.3 years — compared to pension mortality tables currently in use.

The life expectancy of a 60-year-old woman has increased by 2.7 years — from 26.7 to 29.4 years.

All of which is good news, of course, unless you're the one who has to figure out how to pay for those extra golden years.

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July 23, 2021

Is a 60/40 portfolio split up still the way to go?

What's the ideal mix for your retirement savings?

The rule of thumb for retirement portfolios has long been 60/40: 60 per cent in stocks and 40 per cent in bonds. That’s supposed to be approximately the ideal combination of growth and safety.

That’s not just an arbitrary split either. Mutual fund giant Vanguard went back and ran simple model portfolios based on the 60/40 rule and found that, since 1926, an investor with that allocation could have expected an 8.7 per cent annual return, with losses in 21 out of 87 years.

That doesn't sound too bad, although there's lots of debate as to whether those types of returns are feasible with interest rates being so low.

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July 15, 2021

Canada needs to get it right on pension reforms

Policy-makers must start thinking "outside the box" to ensure Canada and Quebec Pension Plan (CPP/QPP) reforms will address projected gaps in future retirement income.

A new study from the Institute for Research on Public Policy (IRPP) reveals that these new reforms, as they stand, will be of little help to the next wave of Canadian retirees.

Michael Wolfson, former chief statistician, Statistics Canada, examines the impact of various options for CPP/QPP in the study Not-So-Modest Options for Expanding the CPP/QPP.

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Women driven by emotions when planning for retirement: study

Although the share of men and women saving for retirement is roughly the same, the way they plan for retirement differs sharply.

When planning for life after work, women are more affected by emotions and less involved in decision-making, compared to their male counterparts, according to research from Lincoln Financial Group.

While hope and fear affect both genders when it comes to squirelling away money for the future, women are more vulnerable to such emotional influencers.

Seventy-three percent of say they're affected by fear, compared with 59% of male respondents. Hope plays an even more important role for 91% of women and 85% of men.

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July 09, 2021

88-year-old McDonald's worker lovin' it

A Welsh employee may be the fast-food chain's oldest. It beats staying at home bored senseless, he says.

When you envision your 88th birthday, where do you see yourself?

If the answer is "behind the counter at McDonald's," you're either an economic cynic that people regularly come up with excuses not to talk to at parties, or you're Welsh World War II veteran Bill Dudley, who may be the oldest McDonald's (MCD.TSX) employee in the world.

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Politicians' gold-plated pension plans need further trimming: report

Gold-plated pensions for British MPs could be scrapped under an overhaul of parliamentarians’ pay.

Pensions and juicy severance packages paid to ousted politicians have been branded a reminder of the ‘old, cushioned world of privilege’ by Sir Ian Kennedy, the chairman of the Independent Parliamentary Standards Authority.

The watchdog is expected to unveil a scaling back of the ‘excessively generous’ pensions entitlements and golden goodbyes that many MPs enjoy as part of IPSA’s review of pay and expenses.

Might Canada be considering the same sort of move? They certainly should, maintains Gregory Thomas, federal director of the Canadian Taxpayers Federation.

Many federal politicians who decide to retire at the next election could easily walk away with millions of dollars from the lucrative parliamentary pension plan. And the CTF thinks that stinks.

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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...