Is my pension like a bond? + MORE Apr 16th

Q: My wife and I have been using the Couch Potato strategy for a few years now, but something has always nagged me. I am fortunate enough to have a defined benefit pension that will pay me $50,000 a year in retirement. Should I consider this the fixed income portion of my portfolio and put the rest in equities? –Brian F.
A: This a critical financial planning question for anyone with a pension, and yet it’s often framed in an unhelpful way.
A popular school of thought says you should think of a pension as a bond, presumably because both bonds and pensions pay predictable amounts of guaranteed income. The problem is, there is no way to put that idea into practice when managing a portfolio.
In this case, our reader has a pension that will pay him $50,000 a year. What would an equivalent bond holding be? Let’s assume he also has $300,000 in personal savings, and that it’s all equities. What would his overall asset allocation be? Even if he did establish a present value for the pension, how would that be helpful when it was time to rebalance the portfolio to its targets? Clearly this is the wrong way to approach the problem…

The battle for your cash is on. A recent survey for the newly re-branded Tangerine found that 59% of Canadians expect a tax refund this year with 37% banking on a refund of $1,000 or more. It’s no wonder online banks including Tangerine as well as PC Financial have both announced 2.5% promotional interest rates on new deposits until June 30 to coincide with tax refund season as well as the closure of Ally bank by RBC on April 30.
While 2.5% looks at least twice as good as the typical high interest savings account, I wouldn’t recommend moving your money because of it. The extra  interest on a new $5,000 deposit will only net you an extra $25 or so between now and June 30.
Having said that, if you were looking to open a high interest savings account with an online bank anyway, now is as good a time as any. Be sure to choose the TFSA version of the high interest savings account  if you still have contribution room to maximize the benefit.
If you don’t need the money in the short term however, consider investing it in an RRSP for even greater tax efficiency or investing the funds within your TFSA to increase your chances of at least outpacing inflation…

When children are grown up, parents provide food, shelter, and the resources they need to grow up to be responsible adults. We assume that our children will grow up, leave the nest and strike out on their own at some point. They will finish their education, establish their own families and we’ll have a quieter, emptier nest to deal with. For this generation, the reality has not been like that at all.
According to reports, 60 percent of parents are providing financial support to their children well into adulthood. In some instances, these young adults are still receiving money from their parents in their late 30s! Economic circumstances are challenging for many young people and it has forced them to make tough choices. At the same time, you don’t want to forego your own dream of having a comfortable retirement because of your child, either. Can you save for retirement and help your adult children too?
Help Your Adult Children: Start by Talking

Talking about money can be challenging…