9122 - Retirement Income for Life

Preface

PART I: SETTING THE STAGE

Chapter 1: Making Your Money Last

Carl and Hanna Retire

Takeaways

Chapter 2: What Type of Retiree Are You?

                Takeaways

Chapter 3: Your Income Target in Year One

              Why 70 Percent May Be High

The Real Target

Drawing a Line in the Sand

Takeaways

Chapter 4:  Your Retirement Income Target in Future Years

Academic Studies on Retirement Spending

Setting an Income Target for Future Years

The Lower-Income Threshold

Aligning Income Targets and Retirement Types

The Income Targets and Government Benefits

Takeaways

Chapter 5: Rainy Day Spending

Types of Spending Shocks

Ability to Cope with Shocks

Setting Up a Reserve

Long-Term Care Situations

Takeaways

Chapter 6: Planning an Inheritance

Motives Behind a Bequest

To Make a Bequest or Not

Age-Related Bequests

Bequests and Home Equity

What Carl and Hanna Can Do for Their Children

Takeaways

Chapter 7: Investment Risk

Alternatives to Stocks

What To Expect from a Portfolio of Stocks and Bonds

The Investment Problems of Main Street

More to Come

Takeaways

Chapter 8: What Not To Do

Rejected Strategy 1 – Withdrawing a Flat Percentage

Rejected Strategy 2 – Withdraw Only the Interest

Default Option – Make the Minimum Permitted Withdrawal

Withdrawing Income Equal to the Target

Takeaways

PART II: THE STRATEGY

Chapter 9: An Overview of the Strategy

Overview of the Enhancements

Going Through the Checklist

Takeaways

Chapter 10: Enhancement 1: Reducing Fees

ETFs

Does Active Management Add Value?

Impact of Lower Fees

Takeaways

Chapter 11: Enhancement 2: Deferring CPP Pension

How CPP Pension Is Calculated

CPP Pension at a Later Starting Age

Impact of a Bigger CPP Pension

Common Objections to Deferring CPP

The Real Reason for Not Postponing CPP

Other Objections to Deferring CPP Benefits

Why Not Defer OAS, Too?

Takeaways

Chapter 12: Enhancement 3: Buying an Annuity

Impact of Enhancement 3

Convinced Yet?

Buying an Annuity Later

Lingering Doubts

Takeaways

Chapter 13: Fine-Tuning the Asset Mix

Stocks Are the Place to Be

Takeaways

Chapter 14: Did You Save Enough?

No Simple Rule of Thumb

Defining the Income Range

Income You Can Expect from Savings

The Income Range and the Acceptable Income Zone

Single Retirees

What About Your Own Income Target?

Takeaways

Chapter 15: Enhancement 4: A Dynamic Spending Approach

Spending Optimistically with Miserable Returns

Spending Pessimistically with Good Returns

Describing Enhancement 4

Implementing Enhancement 4

Analysis

Takeaways

Chapter 16: Enhancement 5: The Nuclear Option

Carl and Hanna Face an Income Gap

Reverse Mortgages Explained

An Example

Pitfalls

A HELOC

Takeaways

Chapter 17: A Recap of the Five Enhancements

The Framing Effect

Corroboration

Takeaways

PART III: MAKING IT HAPPEN

Chapter 18: A Message for Employers

The Next Step

The Business Case for Pension Plans

Reasons Given for Not Helping Retirees

What Should a Good Solution Look Like?

Takeaways

Chapter 19: Q & A on Some Points

              Takeaways

Chapter 20: Where Do You Go From Here?

The DIY Approach

Alternatives to DIY

Financial Advisors

The Employer Route

Robo-Advisors

Takeaways

Appendix A: Summary of Takeaways

Appendix B: Summary of LIFs and RRIFs

Overview

RRIF Basics

RRIF Investments

Taxation of a RRIF

Withdrawals in Kind

When You Die

Analysis of RRIF Rules

Life income Funds (LIFs)

Equivalent Vehicles

Duration of a LIF

Cash-Out Options

Maximum Annual Payouts

Analysis of LIFs

Appendix C:  Implementing Enhancement 4 with Morneau Shepell’s 
   Income Calculator

Endnotes

Index

Acknowledgements

About the Author