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In the Globe and Mail article Feeling well enough to work longer?” the results of an Investors Group sponsored Decima Research poll show that 65% of the working 45 to 64 year olds expect to do some work during retirement. However, only 23% of those surveyed were actually working in their retirement. Clearly, “health and other complication” may interfere with ability to work during retirement years. Also, 42% of the retirees did not start thinking seriously about retirement until about age 50. The Investors group survey also indicated that about 75-80% of those surveyed felt that working with an advisor helped them be more prepared for retirement. These are statistics that should be kept in mind when you are counting on working in retirement to maintain your lifestyle.

Jonathan Clements in the WSJ talks in Don’t Get Hit by the Pitch:How Advisers Manipulate You” about tactics that unscrupulous financial sales people persuade otherwise intelligent and educated individuals to sink money into rotten investments. (Some ethical advisors might also use the same tricks for good intentions.) Examples include: feigning friendship, targeting pitches to your hot buttons, taking advantage of investors’ hunger for IPOs or hedge funds, exploit people’s desire to return favors (seminars, free lunch or ‘inside’ information).

“The Short View: Index Funds” in the Financial Times reports that S&P500 index funds have once again outperformed the average mutual fund manager after six years of underperformance, to the tune of 15.7% to 13.1%. During the bear market, index funds stay fully invested in stocks, without being able to have a cash cushion. Large companies in the S&P index became overvalued in the late 90s, thus allowing value and smaller company funds to outperform in the 2000s. Given the low cost of the index funds, their outperformance is expected to be norm.


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