Category Insurance

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 […]

Insured Annuities? Not so fast

In a nutshell “Insured annuity” based un-indexed income is less compelling than a systematic withdrawal of the same size from a balanced portfolio. Monte Carlo simulations suggest that even with a higher 50% indexed draw from the balanced portfolio delivering 3.5% real return, the residual portfolio value is likely to exceed the life insurance payout […]

Annuity or Lump-Sum (LIF): Upcoming Nortel pensioners’ decision

In a nutshell In this blog I address the “annuity or lump sum?” and the  “if, when and how much  to annuitize?” questions with a discussion of the pros, cons and other qualitative considerations that go into this very personal decision. “Annuity or Lump-sum?” One could very simply just take the annuity option (“status quo […]

“A Canadian’s best tax haven: The US” by Robert Keats

Despite the recent story about one of the Facebook founders giving up his US citizenship to move to Singapore for tax reasons, according to Robert Keats, in his latest book, he suggests that for Canadians in search of a tax haven (and warmer climate) US is the superior destination compared to traditional tax havens; and […]

The Pursuit of Risk Management

 In a Nutshell Risk is unavoidable; it is part of life. There are known, unknown and unknowable risks. The best we can hope for is to undertake the pursuit of risk management, in order to minimize the impact to the best of our understanding and abilities. -the probability and financial impact of a risk determines […]

Pure longevity insurance payout option in CPP would reduce retirees’ longevity risk

Adding a pure longevity insurance payout option to the CPP would go a long way to ease the pain of private sector employees with disappearing pensions. This blog adds some meat to the proposal I mentioned in last week’s PRPP or expanded CPP? Consider adding a pure longevity insurance payout option to the CPP. The PRPP doesn’t meet […]

‘RIP’ GMWBs? Who will miss these lose-lose products?

There were a number of recent articles indicating that insurance companies are exiting the GMWB business. The latest in the past week were MSN Canada’s  “Insurers back away from “income for life” products”, Benefit Canada’s   “Say goodbye to GMWB as you knew it” and WSJ’s  “Hartford says goodbye to annuities”. According to these articles (and references therein) Desjardin, Standard […]