Retirement planning getting you down? There are always smart ways to plan the financial aspects of your retirement.
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Who Wants to Support a Millionaire? Dec 2nd
The median American household can’t come close to affording the pension benefits of career government workers..... More »
How financial journalists plan their own retirement + MORE Aug 15th
It’s an occupational hazard of personal finance (PF) journalism that the writers’ lives are an open book. Anyone reading Retired Money knows my age and that I recently had to convert my RRSP into a RRIF. And I’m not alone: this summer has seen the retirement of some long-time PF columnists, no.... More »
25 personal finance highlights from the last 25 years + MORE Oct 18th
Over the last 25 years, personal finance in Canada has transformed enormously. Major economic shifts, new technology and evolving consumer behaviour have led to new policies and events. Here are some of the most interesting personal finance developments in the last two and a half decades:
.... More »
Stock news for investors: Goeasy shares plunge nearly 60% after lender suspends dividend + MORE Mar 14th
Here’s a round-up of news for Canadian investors this week.
Goeasy
Algoma Steel
Transat
RBC
MDA Space
Empire
Featured RRSP Accounts
featured
EQ Bank
Build your retirem.... More »
Marriage or mortgage: Which is the better investment? Mar 30th
Weddings can be expensive, but so can many of the things that come after a wedding—like a home purchase, starting a family and saving for retirement. And so money is an important relationship issue even before a couple ties the knot.
Both weddings and home purchases can both cause people to thin.... More »
Why too much cash hurts investors
– moneysense.ca
You spent decades scrimping and saving to build up your retirement nest egg. And yet a lot of Canadians let inflation eat into their precious portfolio by leaving too much of it exposed, in cash.
Sure, there is a role for some cash. You’ll want to keep some accessible for household emergencies. And, in your portfolio, you might want some to use to take advantage of investment opportunities that pop up. But excessive amounts, sitting for long periods of time without a purpose, can cost you big time.
It is called a “cash drag.” Cash earns virtually nothing these days, so it drags down the performance of your portfolio. Let’s say you hold $50,000 in cash in your investment account, over and above what you have in your savings account for emergencies. If, instead, you had invested that money and earned a 5% return for 30 years you’d have $220,000 in your account. That’s $170,000 more, just by avoiding a lazy mistake.
Why this happens
There are three main reasons why some investors hold too much cash…
Sure, there is a role for some cash. You’ll want to keep some accessible for household emergencies. And, in your portfolio, you might want some to use to take advantage of investment opportunities that pop up. But excessive amounts, sitting for long periods of time without a purpose, can cost you big time.
It is called a “cash drag.” Cash earns virtually nothing these days, so it drags down the performance of your portfolio. Let’s say you hold $50,000 in cash in your investment account, over and above what you have in your savings account for emergencies. If, instead, you had invested that money and earned a 5% return for 30 years you’d have $220,000 in your account. That’s $170,000 more, just by avoiding a lazy mistake.
Why this happens
There are three main reasons why some investors hold too much cash…
What Sears retirees can do about the reduced DB pension
– moneysense.ca
Like Stelco and Nortel before it, thousands of pensioners of Sears Canada are experiencing firsthand what happens to corporate Defined Benefit pension plans when a business fails.
In October, Ontario’s Superintendent of Financial Services (FSCO) appointed Morneau Shepell to administer Sears Canada’s underfunded pension plan, a first step to winding the plan down in the wave of store liquidations that are now under way.
According to veteran Sears Canada spokesperson Vincent Power, the Sears DB pension is only 81% funded as of June 2017, although changes in interest rates and markets could alter the final figure. If it stands, it means DB plan members would get a 19% benefits haircut, although Ontario residents would have some restitution under the province’s Pension Benefits Guarantee Fund (PBGF), which we looked at in detail a couple of columns back. The PBGF guarantees the first $1,000 a month of pension, a figure slated to rise to $1,500 but which has not yet been legislated. Residents of other provinces do not enjoy this compensation, and roughly half of Sears employees were outside Ontario…
In October, Ontario’s Superintendent of Financial Services (FSCO) appointed Morneau Shepell to administer Sears Canada’s underfunded pension plan, a first step to winding the plan down in the wave of store liquidations that are now under way.
According to veteran Sears Canada spokesperson Vincent Power, the Sears DB pension is only 81% funded as of June 2017, although changes in interest rates and markets could alter the final figure. If it stands, it means DB plan members would get a 19% benefits haircut, although Ontario residents would have some restitution under the province’s Pension Benefits Guarantee Fund (PBGF), which we looked at in detail a couple of columns back. The PBGF guarantees the first $1,000 a month of pension, a figure slated to rise to $1,500 but which has not yet been legislated. Residents of other provinces do not enjoy this compensation, and roughly half of Sears employees were outside Ontario…
