Category Advocacy

Annuity/Pension vs. Lump-sum- Part 5: Putting it all together

In a nutshell Putting it altogether, you are now ready to explore your own personal situation for the annuity/pension vs. lump sum decision. If you are reading this Part 5 blog post of the final one of this series, then you have already ploughed through the first four parts: Annuity/Pension vs. Lump-Sum- Part 1: Making […]

Annuity/Pension vs. Lump-Sum- Part 4: Monte Carlo simulation to explore retirement income trade-offs with and without annuitization

In a nutshell In this blog post (Part 4 of this series) we use Monte Carlo simulation to explore the range potential outcomes given assumed Capital Market Expectations, (risk tolerance and corresponding) Asset Allocation, in the context of personal circumstances (Age, Assets, Expenses, Other Lifetime Income sources and the resulting required withdrawal rate) and compare […]

Annuity/Pension vs. Lump-Sum- Part 3: Quantitative considerations

In a nutshell In this blog post (Part 3 in the series), in the context of a specific example for a 67 year old couple, we explore quantitative considerations toward the annuity/pension vs. lump-sum decision, such as: (1) fixed and discretionary expenses, (2) capital market expectations, (3) how/when/if to annuitize, (4) understanding the value delivered […]

Annuity/Pension vs. Lump-Sum- Part 2: Drivers to and away from annuitization

In a nutshell In Part 2 of this series of five blog posts, we approach the annuity/pension vs. lump-sum decision qualitatively to allow individuals to tentatively screen themselves into an annuity or lump-sum direction; in follow-on blog posts we explore quantitatively the decision to annuitize, when it might make sense to do so and how the outcomes […]

Annuity/Pension vs. Lump-Sum- Part 1: Making the right decision for you

In a nutshell In Part 1 of this five part series, the focus is on: (1) risks in retirement, (2) life expectancy and impact on retirement planning age and (3) annuities are insurance not investment The three key risks in retirement are: longevity risk, inflation risk and market risk. Annuities/pensions address some aspect of these risks, while […]

Expanded CPP is dead? Long live pension reform!?!

 In a nutshell The expanded CPP appears dead, for now anyways; this time killed by the federal government. With apparent consensus on the need for pension reform, over the past few years the possibility of an expanded CPP sucked all the oxygen out of the debate on the best type of pension reform for Canada. […]

Expanded CPP: Should address the needs of ALL Canadians

 In a nutshell Expanded CPP is back on the table again with federal and provincial finance ministers all agreeing that it has merit. In the context of this newly emerged consensus around some form of CPP expansion, though not about its timing, it is useful to look at the pros/cons of an expanded CPP. Given […]

Nortel pensions: Why CV/LIF value is less than annuity value for Nortel’s Ontario pensioners?

 In a nutshell The bottom line is that for Ontario Nortel pensioners only, CV is calculated (as defined in the legislation and the same as for deferred pension plan beneficiaries) on windup date life expectancy and some of the CV is considered to have already been collected since windup, so it’s worth less now. Whereas […]

“Meeting the global challenge of funding retirement” –Highlights of Robert Merton’s CFA Institute seminar

In a nutshell- In this 90 minute CFA Institute seminar, Nobel prize winning Professor Robert Merton tackles some of DC pension plans’ well known but unresolved deficiencies in a holistic approach to the mass/working class pension. He sets the stage by pointing out that, in the shift from DB to DC average workers were by default […]

Expanded-CPP Plus

In a nutshell -An expanded-CPP, let’s call it expanded-CPP Plus, may in fact be a good framework for Canada’s pension reform.  If one expands options beyond the dimensions (maximum pensionable earnings and percent benefits) currently under consideration, and one changes some of the other attributes of an expanded-CPP relative to the current CPP, profound changes to Canada’s […]