Retirement planning getting you down? There are always smart ways to plan the financial aspects of your retirement.
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Best high-interest savings accounts in Canada 2021 + MORE Aug 31st
Generally savings accounts offer very low interest rates. So, if you want to earn on your deposits (rather than simply using your account as a temporary “holding tank” or directing to longer-term saving and investing vehicles), a savings account with a high interest is a no-brainer.
However, whe.... More »
Is a personal injury settlement taxable, and can it impact OAS or GIS benefits? + MORE Aug 24th
Q. I received a small settlement for an Ontario car accident, which my lawyer says is non-taxable, and so noT4A will be issued. If I deposit the funds into a bank account, will this one-time settlement clawback my OAS and GIS benefits?
–J
A. I’m sorry to hear about your accident, J. Hopefully .... More »
How the coronavirus pandemic could change the way we think about retirement in Canada + MORE May 4th
Over the past few decades, the concept of retirement has grown increasingly more sophisticated. Canadians preparing for retirement have been able to contemplate a variety of highly personalized approaches—from early (or even very early) retirement; to active, phased, or working retirement; and mor.... More »
Can you survive on Canada’s government pension alone in retirement? Experts say you might be surprised + MORE May 10th
Until fairly recently, CPP replaced a quarter of your average work earnings — but it’s already providing more. We asked experts what to do if CPP and OAS will make up most of your retirement income..... 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…
