Jonathan Clements in “Harder than building wealth: Keeping it”  he takes concern about retirement finance to a new level, including a factor not usually discussed in retirement finance articles. (Of course you read many reports about whether the old 70% of pre-retirement income target may be obsolete, given the younger, healthier and more active retirees, and perhaps closer to a 100% target is better-it depends on individual circumstances.) You no doubt heard that you must factor in inflation adjustments throughout retirement, if you want to maintain constant spending power. But he introduces another factor into the equation; having an income that keeps up with inflation is not enough to stay on par with the faster growing standard of living in the economy/society as a whole. Specifically, he indicates that wages typically rise about 2% faster than inflation. So, especially for younger retirees who spend more years in retirement, just keeping up with inflation will feel like they are falling behind those around them. Of course, the impact on the lifestyle of the beneficiaries of the estate (if any remains), will be even more noticeable. Now there is something else for you to ponder!

In WSJ’s “Can we talk?” Garry Ruffenach suggests ten questions that husbands and wives should discuss about retirement. The questions requiring airing include: if and when to retire, the vision and location of retirement, is financing of retirement on track and consistent with the desired/expected lifestyle. A great set of questions!

The Canadian dollar’s parity with the U.S. dollar triggered Rob Carrick of the Globe and Mail to write a couple of excellent articles in the past week on currency hedging of portfolios. First, he is wondering why the Canadian mutual fund industry is so obscure about the extent of currency hedging taking place in some of their funds and why it took so long to start generating currency hedged versions of their foreign funds in “Fund industry stinks at helping investors tame currency risk”. Whereas in “What’s an investor to do” he suggests that you hedge about 50 % of your U.S. exposure against further rise in the loonie. I plan a blog on reasons and approaches to hedging in the next couple of weeks, in the In Depth Topics section of this website.

A couple of Florida property tax related articles that is worth mentioning as well. First, in “Snowbirds say they get cold shoulder on taxes” Geoff Kirbyson discusses the subject in the Canadian accounting journal The Bottom Line, which includes interviews with a couple of snowbirds (including me). It is not news, but the message is getting out and informing a broader audience about the discriminatory property tax system in Florida. Similarly, Garry Marr of the National Post writes that that there is  “No better time to buy in the Sunbelt”  but a significant portion of the article is devoted to also quoting Gerry Brissenden, President of the Canadian Snowbirds Association about the property tax issue that snowbirds face in Florida, when compared to the other Sunbelt states! Brissenden sees a shift in the high proportion of Canadians who tended to buy property in Florida, to many more taking a closer look at and choosing Georgia, South Carolina, Texas and Mexico.

In “Dying without a will can leave you spinning” Arthur Drache lists the three essential documents that everybody should have: a will (indispensable) insures that the assets go to when you want them to go upon your death instead where the state or court may direct them, a power of attorney allows individuals who you appoint to act on your behalf on matters of property in case you are unable to do so, and a living will allows an individual to act on your behalf in health matters should you be unable to do so. Mr. Drache suggests that this is not a do-it-yourself project and “competent local” legal advisor should be engaged.

Richard Croft tells his readers that “A benchmark can keep you out of trouble” . He feels that investors are looking much too frequently at how their stock portfolio is doing. Instead of worrying about day to day changes in the stock or portfolio value, they should be “judging performance against a benchmark’ that is representative of their holdings. A benchmark will also keep you focused on the long-term plan and may prevent you from taking action (like selling a significant portion of the portfolio in a downdraft and thus missing out on the recovery later- leading to sell low and buy high) that may turn out to be counterproductive. (By I have an article on benchmarks in the fall issue of the CSA News that you may wish to read; subscribers would have already received their paper copy, as I have, but I haven’t as yet seen the on-line version posted; I will provide the link when available). You can also read about Benchmarks  at my website.

Business Week in “Retirement made complicated” reports that equity index annuities are getting well deserved bad press, but not just because of the high-pressure and misleading sales tactics, though that is the primary reason. The product can be replicated cheaper (though perhaps less conveniently) by other means.