Develop your own plan + MORE Dec 23rd

Q: We have $320,000 in a balanced portfolio in a LIRA. Our insurance agent wants us to transfer this money to segregated funds. I don’t think this is a wise move for us as we are close to retirement age. Am I right? And when do segregated funds make sense?
— Roger
A: You are right to be skeptical. Few unbiased financial planners would recommend segregated funds under any circumstances. In almost all cases, they only make sense for the agents who collect fat commission for selling them.
A “seg fund” is not actually a mutual fund: it’s an insurance product. That’s why they are often recommend by insurance advisors, who are often not licensed to sell other types of investments. If all you sell is hammers, every problem looks like a nail.
Seg funds come with a number of benefits that sound appealing. First, they have a maturity guarantee, which sets a minimum value for the fund after a specified period (often 10 years). In other words, if you invest your $320,000 in a seg fund with a 100% guarantee, you’d have assurance that it will be worth at least $320,000 at maturity, even if markets tank…

Steward Kinmond, 70, and Barbara Sibbald, 58, in front of their mortgage-free new-build, close to Parliament Hill. (Photography by Jessica Deeks)
Every morning, Barbara Sibbald and her husband Stewart Kinmond gaze out across their big backyard and watch the sunrise. Directly behind them is part of their retirement plan—standing as solid as a brick house. Because, well, it is a house. A big, old Victorian, in fact, that’s been retrofitted into a triplex just 15 minutes away from Parliament Hill in Ottawa.
When Barbara met Stewart just over a decade ago, he already owned two rental properties, including the Victorian triplex. After three years of dating, the two divorcees decided to tie the knot, but agreed: They’d live separately in their own homes. “We’re both artistic and needed space to create,” explains Barbara, an award-winning health journalist who also has a book of short stories coming out next March.
At the same time, Barbara started to look for her own investment property as a way to top up her nest egg…

Public retirement funds are a giant opportunity for corruption.

While this column is called “Retired Money,” a recent encounter with a group of seniors reminded me that once you reach retirement, there’s a lot more to it than just money. This hit home just before Christmas when I attended a Seniors Luncheon hosted by our local church in Toronto.
I ended up at a table mostly of men, aged 82 to 90 and nearby was my female friend Meta, who had just turned 100. We didn’t talk explicitly about money but it was apparent that the men had all been senior executives, accountants or teachers and enjoyed relatively plush employer-sponsored pension plans.

Should you work part-time in retirement? »

In the case of 88-year old Larry (a slightly altered name for this column), he had been forced to retire from a government job at 65, because that was the way it was back then. He didn’t want to retire that early but had no choice and he knew even before it happened that he would not relish the change. Even so, he jumped into volunteering almost from the start, and remained physically active: running every day until various ailments forced him switch to walking…