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In “Making Your House Pay in Your Retirement” with the subtitle “Reverse Mortgages Turn your Home Equity into Income, and Costs- a Big Drawback- Are Coming Down” Opdyke of the WSJ discusses how growing competition and government action in the U.S. is starting to bring down the costs of reverse mortgages. With a reverse mortgage, homeowners who are over 62 years of age can draw on some of the assets locked into their homes while still permitting them to stay in their home until they die. However, one must look seriously at other available alternatives to meet needs before resorting to this option as it tends to be expensive. A somewhat dated (though likely still valid) perspective of the Canadian version of reverse mortgages is described in an April 2000 CBC Marketplace story available on line at “Is a Reverse Mortgage Right for you?”.

ETFs started out as simple exchange tradable index funds offering very limited options but meeting a need. (By the way, they are the cheapest, and likely, most effective, way of tapping into foreign markets for diversification for a Canadian investor.)  However, the WSJ reports in “ETF Outlook Points to a Busy 2007” that 144 exchange traded product were introduced (in the U.S. alone, more overseas and Canada) in 2006. 347 U.S. listed ETFs now have over $400 billion assets. The complexity (and risk) is growing significantly as well with addition of single country, fundamental index, leveraged, commodity and currency indexes. Business Week even reported recently that a Global Index ETF is in the works as well.

In “Up for Review: 401(k) Industry” the WSJ reports that the management of 401(k) plans (similar to RRSPs) is now under scrutiny. Issues on the table include: poorly disclosed financial arrangements, adequacy of advice provided with the plans, whether companies run the plans as fiduciaries (i.e. in the interest of the investors) and new laws aimed at protecting investors.


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