In-Depth -Reverse Chronological Order

I can't recommend Critical Illness (CI) Insurance - It's expensive (high load factors), payout is not related to financial loss, policies are complex and not standardized; better spend your insurance premium dollars on health/disability/life insurance or set up your own CI savings account.

A couple of interesting research papers from Pension Research Council on "Decumulation Strategies and Robust DC Pension Plans"- The first paper compares nine decumulation strategies in terms of income streams and residual assets, while the second uses a feedback mechanism to improve robustness of DC plan outcomes.

Asset Allocation II- Expert perspectives, risk considerations and building your custom asset allocation, "the only free lunch in investing".

Benoit Mandelbrot's "The (Mis)behavior of Markets" is a is both interesting and disturbing. He discusses the basic ideas on which today's finance theory is built as well as the stories of the people who were the originators of the ideas; but disturbing, because he (re-)asserts that everything in modern finance is built on a foundation of sand.

Long-Term Care Insurance (LTCI-II)- Musings on the Affordability, Need and Value: A (More) Quantitative View After a more quantitative look at LTCI, I still don't feel moved to buy it or recommend it as a must have item for most. Read overview blog in LTCI-I as well and make your own call to secure your "peace of mind".

Florida property taxes: State rejects proposed compromise on 'Save-Our-Homes' Constitutional challenge-Is Florida missing an opportunity for renewal?

Pang and Warshawsky's Comparing strategies for retirement wealth management: Mutual funds and annuities is a must read. It compares six strategies; systematic withdrawal alone or combined with partial annuitization are the best. (Longevity insurance is not considered). GMWBs don't cut it even against 1.2% MER funds; imagine the outcome against 0.1-0.2% index funds!

Q&A: Take Commuted Value (CV) or "pension"? Just laid-off from Nortel (summer 2009 It depends on the level of your pension and your assessment of the probabilities/sizes of various upside outcomes versus the possibility of being forced into an annuity with no additional funds flowing into the Canadian pension plan.

Emergency Policy Changes Required to Ease Impact of Pension Crisis and Enable Pension Reform BIA priority, tax-credit, protect Canadian estate, $55K pension guaranty, CV option and 100% transferability to RRSP, new pension system model.

Doomed Nortel pensioners? Outside-the-box pension options and path to pension reform Legislated annuity only wind-up offers 25-50% lower expected NPV than alternatives based on Commuted Value, Longevity Insurance and pensioners insurance and investment management company. Proposal also offers framework for pension reform.

Jonathan Clements' new  "Main Street Money" is vintage Clements. Personal finance principles with enough detail to propel you to action. Covers the obvious to the counterintuitive with equal ease. Quick read but you'll use it as reference over and over again. Must read!

Control What You Can -Save (aggressively), spend (using 'endowment' model), (minimize) cost!

Pensions: Too little, too late!- 50% interim CV payments would be more appropriate than the Nortel proposed 69% motion to the Court.

Warren MacKenzie and Ken Hawkins's 38 "New Rules of Retirement: What your financial advisor Isn't telling you"- Well worth reading! I recommend it as part of your financial education process. Their wise concluding words are "You cannot go back...you have to start playing from where you are today and make the best of your situation, whatever it may be."

Systemic Failure in Canada’s Private Pensions: Who could have prevented it? What could be done now?

Florida: April 2009- Property values, property taxes, constitutional challenge, should I buy now?, "Ponzi state"?

Pensions: Relief for companies, but not pensioners Learning from the U.S., Ontario Budget on pensions, opposing views.

Pensions: General and Nortel Specific Topics Marconi look alike? Nortel life insurance, other pension stories

Non-homesteaders' Florida Property Update- February 2009 - There is light at the end of the tunnel, but it is...

Personal finance columnist Jonathan Chevreau's new book "Findependence Day" is an education in personal finance embedded in a good fictional story. It's not about retirement planning, it is about achieving financial independence. Read it and buy it for your young adult and newly married children.

In "Spend 'Til the End" Kotlikoff and Burns challenge 'conventional' financial planning on an approach based on: maximizing spending power, consumption smoothing and pricing your love. Worth reading- lots of good ideas and different ways of looking at things.

Long-Term Care Insurance (LTCI)- An overview -Sounds good, but: policies are complex and not standardized, they are expensive yet you can't be sure how much more it will cost you after you sign up and finally, you can't be sure if and when you'll qualify for benefits or what proportion of your total LTC cost will be covered. I need to think a little longer before I am ready to recommend it.

Foundation & Endowment Investing by Kochard and Rittereiser is an interesting and informative book on the investment approaches used by leading institutional investor with lessons for individual investors.

Pension relief for corporations? Yes, but not without protecting the pensioners

Site (and Sight) Unseen: Florida Real Estate Update (October 23, 2008)  Time to buy for Canadians? Sight unseen web auction bidding(not), Forida real estate in the press, Case-Shiller July index not pretty (August next week), property tax surprises.

What Now? (Oct. 13, 2008)- Review spending, identify expense "musts" and "wants", identify pension income, calculate required investments for remaining "musts" and "wants", stress test and take corrective action.

What's wrong with Canadian private-sector DB pension plans? Everything?...Problems and solutions -Contribution holidays, underfunded plans, inappropriate portfolios, aggressive actuarial and investment management practices, conflict of interest challenges among the roles of sponsor-administrator-trustee-actuary-investment manager, and ineffective regulations and regulators.

TFSA or RRSP? 401(k) or Roth 401 (k)? Tax-free or tax-deferred account?- Tax Free Savings Accounts (TFSAs) are coming to Canada in 2009. Which one is better for you- TSFA or RRSP? It depends on many factor, known and unknown. Ideally you'll want to take advantage of both and save the maximum allowable in each. Even if you can't max out both, you may gain some flexibility in retirement by investing in both vehicles.

"Are You a Stock or a Bond", the new book by Moshe Milevsky, discusses some of the more recent thinking and subtle yet critical issues in retirement planning; and he does it in a clear and understandable way. Read it (though approach the GMWB recommendation with a dose of skepticism).

How much Life Insurance Do You Need?....(plus Risk and Uncertainty)

Estate Planning - What is it and why do you need it?

Under-Funded Pension Plans - New Canadian legislation to raise priority of unremitted pension contribution in a bankruptcy or receivership. This is progress but much more is needed to protect funding shortfalls.  

P/E Ratio - it can be confusing and misleading

Florida Property Values and Legal Challenge of Discriminatory Property Taxes-August 2008 Update

Canada Supplementary Pension Plan (CSPP) -Keith Ambachtsheer's, C.D. Howe Institute sponsored, blueprint for Canada's future pension system- and a call to action.

Simple and Cheap ETF Implementation of a Balanced Portfolio Why should you care? Because lower costs can increase your accumulated assets and/or retirement income by over 50%!

Is your (defined benefit) company pension safe? Is it adequately funded? Is pension plan valuation: Art, science or magic? ...and the answers are: No, Maybe and Not science

Longevity Insurance- What does it buy you? It buys you low cost peace of mind without having to relinquish control of the 90%+ of your assets. It may be the way to annuitize for those with bequest motive, inflation fear, concerns of counterparty risk....

GMWB II- Guaranteed Minimum Withdrawal Benefit products don't cut it even for conservative investors.

"Are 'target-date' funds or is an 'age-independent' fixed asset allocation right for you? While 'target-date" funds may be raking in the assets, a risk-tolerance driven (age-independent) asset allocation may be better for your wealth.

"The Investor's Dilemma- How mutual funds are betraying your trust and what to do about it" Louis Lowenstein tables a shocking and revealing indictment of the U.S. mutual fund industry. The book is a very quick and rewarding read. Highly recommended!

GMWB I -Guaranteed Minimum Withdrawal Most investors should find that the benefits (protection against low probability of major downside around retirement) comes at too high a price (high likelyhood subpar performance at all times).

“Renewal in Retirement…’Paint’ Your Own ‘Canvass’”  Retirement not about freedom to do nothing; it is about renewal and opportunity for growth. So join the revolution and use your newfound freedom to choose your “canvass” and start “painting” your second life. (Note: I have also added a new 'box' on this homepage with the same title and listed links to related books/articles referred to previously in my blogs)

Senior Inflation looks at the potential damage that inflation can inflict on the retirees' real incomes. The damage may be a result of a rapidly escalating CPI as one approaches an otherwise well planned retirement or may be a result of the different basket of goods and services that seniors buy or it may be one's own personal CPI being significantly higher than that of the average population.

Concentration may make sense; if you can live with the increased volatility and can find managers who will consistently outperform (not a cakewalk). Then, you may want to include some concentrated funds in the satellite portion of your ‘core-satellite’ portfolio.

Behavioral Finance Overconfidence, pride and regret, considering the past, mental accounting, emotions...and other biases. How to beat them and how to use them for the good.

Core-Satellite Investing Can't decide if passive or active investing is right for you? You're convinced that passive is the way to go, but you think that you can "add value" with a sprinkling of active investing!?! Either way, core-satellite may offer you a way to proceed.

Structured Products III Creating your own custom enhanced index product using derivatives, while maintaining easy access to your capital.

Structured Products II Good or Bad? It depends on your "view". How do you evaluate/compare a structured product and compare it to other investment options.

Structured Products I What are they? Their objectives and considerations? Do you need them? If yes, then when?

Pension Reform Problems and solutions for DB pension plans and a proposal for pension system revolution (presented to Ontario Expert Commission on Pensions)

Hedging of Foreign Currency Exposure: What is it? How to do it? To hedge or not to hedge?

Annuities IV: The conclusion- not a preferred solution at this time for most  individuals.

Annuities III: Exploring annuitization scenarios- an introduction

Annuities II: (Almost) Everything you wanted to know about annuities but were afraid to ask.

Annuities I: What is (a measure of) Wealth? A combination of sustainable real income and the residual estate.

Universal Life Insurance: There are tax advantages, but it's unlikely to be beneficial to your wealth- If you don't understand it, don't buy it!

flexibleRetirementPlanner is a real gem...try it!

"A Demon of Our Own Design" (Markets, hedge funds, and the perils of financial innovation) by Richard Bookstaber- another good read!

"Protecting the Downside, while Participating in the Upside"

"The Black Swan" (The Impact of the Highly Improbable) by NassimTaleb is well worth reading! Happy 4th to the American readers.

Benchmarks You can't judge performance of your fund, advisor or portfolio without a benchmark. 

Life-Cycle Investing: evolution or evolution, but are we ready for its implications?

Pension/Retirement Plan Reforms Canada is trailing the U.S., which is far behind Australia sn Holland. 

Target-Date Funds II Build your own ETF based custom designed lifecycle fund

Target-Date Funds Good for some if used with care.

Choosing an Advisor The W5s if you want to work with an advisor

Is Retirement Past Its Prime? Michael Falk's stimulating, sobering and thought provoking  perspective on the future of retirement.

What’s in the Budget for Retirees? Not a great deal more than the reaffirmed pension splitting announced before.

Pension or Lump Sum? There is more to it than the health of your employer

Life Settlements Tread with extreme caution when you hear of Life or Senior or Viatical Settlements as source of funds or as an investment.

Cross-Border Living A Canadian owning U.S. property or is a snowbird or working in the U.S. or thinking of moving to the U.S., better understand the complexities and opportunities to do it the right or wrong way. 

How to Retire Happy, Wild and Free is a book that I recommend for your reading list; it is about the non-financial aspects of retirement.

Withdrawal strategies in retirement(expanded) 30 year horizon strategies suggesting total withdrawal rates ranging between 4%-5.5%

ETFs: Past, Present and Future(?) ETF advantages, new flavors and problems to watch out for. Are advantages being eroded?

Want the greatest bang for the buck from your advisor? If you will spend your hard earned dollars on an advisor, a good place to start is working on a retirement roadmap with your financial planner.

Good(?) news, mutual funds perform better in recessions than expansions The question then remains why would you buy or hold actively managed mutual funds.

Withdrawal Strategies in Retirement Approaches used to reduce chance of of running out of money during retirement

How Much Will You Need in Retirement? Disaggreement about the level and shape of spending during retirement years. Higher/lower than pre-retirement? Constant in nominal terms? Constant in inflation adjusted terms? Continuously deacreasing? Bathtub shaped?

Changes Needed for Pensions-Make Your Voices Heard  Ontario has just established an Expert  Commission on Pensions 

(Mostly) Great News for Retirees/Pensioners  Mr. Flaherty, Canada's Minister of Finance showed up on Halloween with a trick and a treat.