Agree completely. As my parents aged they took steps to ensure that they had POA's in place. They wanted to do it while they were both in good health and of sound mind. They did not want a situation occurring where one or both were suddenly incapacitated and unable to either manage their finances or set up a POA. These POA's unfortunately were vital in their final days and years respectively. They made management of their health, financial, pension, and DVA benefits much easier and much less complicated.
The second thing they did was structure their finances so that as much as possible in the event of their death would pass with a little as possible probate tax being payable. As well as making the process seamless and simple for their loved ones.
After my mother passed I had an interesting discussion with a family lawyer that we consulted on another issue. He related to us how few seniors actually get around to doing this and how much stress and mental anguish it can cause to a surviving spouse or siblings. Not to mention legal fees.
Suggest they find out if their employer/former employer offers/recommends retirement planning seminars.
You can check out the collective agreements for the field they were working for. Like the convention collective automobile licenciement mentions the same for automotive industry.
Unfortunately this common ... most view retirement as "way off", get into a rut of living/career and then start thinking about it when they are living it.
Originally Posted by james4beach
My dad was fortunate to notice those taking fill in work to round out their living in retirement so he was a bit better. He was investigating and planning.
Learning from him and starting my career with an insurance company where learning about such stuff was viewed as an asset to be rewarded by the company ... I'm even more proactive.
If there is a collective agreement, it will help.
Originally Posted by WilliamJohnson
For a lot of fields, there is no agreement based on the field so a small change such as changing employment from one company to another can drastically change what the pension will be.
As an example, the merger of companies I moved to meant that I as an employee pre-merger had a DB pension where those starting at the same level one month later, not only had no DB pension - they had no pension at all.
Thanks again for this earlier help, everyone. Good news is that my parents have really gotten organized with this and taken a lot of steps. I'm really happy with how it's shaping up for them. Their retirement is imminent.
They've been consulting with an independent planner -- not a fund salesman -- and the guy seems really on the ball. I've been reviewing the info he's given them, and he's touched on all the things I hoped for -- withdrawal strategy, consideration of pension/CPP/OAS, tax optimization, time horizons and adjustment over time. They also seem to be having some discussions on tax prep assistance, which I'm happy to hear.
Their planner recommended Mawer Balanced, and I agree... did my own research and am happy with Mawer Balanced as a good global fund and I agree that it's worth the 0.97% fees.
My parents finally agreed to liberate money out of very high fee mutual funds. All that money will be going to Mawer. At the same time they are going to retain the discount brokerage ETF account I prepared for them and continue to advise on, as its performance has also been very good and hitting new all time highs daily So they'll have diversification with Mawer, plus their own ETF portfolio at a separate institution.
For those who are curious, that ETF portfolio is:
33% XIU and XIC - Canadian index
10% XSP - S&P 500, plan to switch to ZSP unhedged
20% BRK.B - Berkshire, broad US market
12% CEF.A - gold & silver bullion
25% ZDB - tax efficient bond fund, good for non-reg
The 10 year performance to Oct 31, 2016 (idealized assuming ZDB=XBB) is 6.0% annual which is pretty good. The allocation is very similar to Argo's overall allocation plan.
A question regarding risk and diversification between institutions. My parents are consolidating money from several institutions, and plan to put all their (non-real estate) wealth into three institutions:
70% goes into Mawer, directly with them
20% in a big bank discount brokerage
10% in their day-to-day bank
Thinking about risks such as major fraud (as remote as it may be), do you think 70% is too much concentration at one institution? If you include real estate among assets, then the Mawer concentration drops to 60% of all their assets.
I just re-visted these posting.
Lots of good financial, tax, lifestyle, and estate comments.
My one last comment after four years of retirement to anyone would be to keep your options open. Retirement is a blank page. Your perception of what you want or how it will be may differ entirely from your reality two or three years later. So I would recommend against going out immediately and buying that retirement condo, RV, home whatever. Take your time, get into the groove, and keep your options wide open.
Looking back, the very best thing that we did after selling our home and downsizing was not to lumber ourselves down with another piece of real estate. We may buy however our wants and desires with regard to a home have changed considerably over the past five years and indeed we may end up moving to another locale. Not certain yet. However, because we decided not to buy immediately after downsizing our options are limitless.
One final difference. Instead of thinking why, we are always on the 'why not' side of ledger. I think that this goes hand in hand with the glass half full attitude or the making lemonade out of lemons approach to life.
Last edited by ian; 2016-11-23 at 11:55 AM.
I know a number of people 100% in one institution, and I am 80% in one institution. It is simply not an issue if one is with the big 5.
Originally Posted by james4beach
Added: By the time one counts CDIC insurance in a bank, and $1million CIPF in brokerage accounts, and separate? coverage for registered accounts, especially RRIF/RRSP, it is almost impossible to think there is any residual risk. Even Mawer itself as a fund company (trust) has significant regulatory oversight, it is inconceivable there could be any fraud there.
Last edited by AltaRed; 2016-11-23 at 12:30 PM.
You've convinced me that the accounts are probably safe, and have enough coverage and oversight.
I think they'd hold a number of accounts at Mawer but possibly may hold Mawer Balanced in each account. This means 70% of their money in the hands of one fund manager/team. Well actually, it's a fund of funds and so multiple managers are involved.
The core question: does putting 70% of one's wealth in Mawer Balanced Fund seem like a reasonable thing to do?