# Where to Invest Bank or Broker?



## RedRose (Aug 2, 2011)

I am recently widowed 4 months ago. I have heavy financial decisions to make so as to have an income to last my lifetime, and if anything left to go to my adult children.

Choices so far:
1. RBC RRSPs

2. TD RRSPs

3. Ed Jones, whole variety of investments

I am not too savy with all this and my head is not perfectly clear to make these heavy decisions right now but I want to place it all somewhere safe and yet provide an income for later years. I am 62.

Thanking you ahead and I welcome any tips and advice.


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## Larry6417 (Jan 27, 2010)

Rose, my condolences on your loss. May I suggest NOT making important financial decisions immediately? It sounds like you need more information and a clear head before doing so. First, a RRSP is simply a "basket" containing assets. A "TD RRSP" isn't an investment; it's just where the investments are held. You need to look into your "baskets" and determine what's in them. Make a list of all your investments (what they are, their expense ratios, their performance, etc.). 

It also sounds like you need some financial advice - more than can be given on an internet forum. This tends to be a DIY crowd, but in your case, paying for good advice is warranted. Finding good advice can be a challenge. There have been horror stories on this forum about financial advisors who took advantage of their clients. There are good advisors, but it can be a challenge to find them. Here's an article for the _Globe and Mail_ www.theglobeandmail.com/globe-inves...find-a-good-financial-planner/article1638577/

If some of the RRSPs belonged to your husband, you should be able to assume them into your own without immediate tax consequences. You probably need a good accountant as well.


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## andrewf (Mar 1, 2010)

I recommend that you don't rush into anything. If you want an alternative to RRSPs and you are worried about securing a lifetime income, look for the book 'Pensionize your Nest Egg' at the bookstore or library. It will at least help clarify your thinking about your retirement income goals.


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## CanadianCapitalist (Mar 31, 2009)

Since you yourself say that you are new to investing, I'll second Larry's suggestion that you seek out a competent financial planner. Ideally, a planner who charges you directly for unbiased advice.


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## MoneyGal (Apr 24, 2009)

Also you need someone who is competent at preparing retirement income plans - not "investing plans." The issues you face as you transition into and through retirement are very different from the issues you are dealing with as you build a nest egg.


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## RedRose (Aug 2, 2011)

Thank YOU ALL for your prompt advice. 
I am sincerely grateful for such quick replies. 
I am just feeling so stuck right now.


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## humble_pie (Jun 7, 2009)

hello Rose i am sorry to hear of your loss & certainly the forum feels honoured that you thought to inquire here for some points of view.

in your place, i would be thinking only of tiny baby steps. It's far more important in this first year or 2 to avoid making mistakes than it will ever be to select some index fund that performs well, imho. Selecting the fund can be done at any time.

for the present moment, have the bulk of the assets been made over to you (i would imagine not yet) & in what form are they going to arrive. If they arrive already invested then it is a question of seeing how wise were the choices that were made, and perhaps making some adjustments later.

are the funds presently being managed by a professional advisor. If so, have you had an opportunity to meet with him or her. Perhaps you already have an idea of his competency & trustworthiness from the years when your late husband was his client. If the answer would be yes, perhaps you might consider carrying on with his or her service, at least for a certain period of time. Certainly he or she will be anxious to retain you as the new client.

the advisor should be able to explain the portfolio to you, showing you how each security fits into the overall plan that he drew up with your husband.

next, the executor. Is this a professional executor (lawyer, accountant, trust company.) If so, are they meeting with you & communicating regularly with you with a view to delivering the assets to you, and also with a view to making sure you are properly launched on the next phase, which will be financial management of your inheritance (note, however, that their "help" with regard to this launching might consist only of introducing you to a few financial advisors.)

what i'm hoping to be able to express is that it's far too soon to begin looking for brand-new advisors out of a blue sky. You already have the above-mentioned resource parties whose job it is, in part, to inform you.

i believe there are also courses in financial management designed specifically for widows. You could look for these at your community college, or ask the YWCA or YMCA if they have such a program or can refer you onwards. 

again, i'm hoping that you would stay strictly with the non-profit or the public educational organisms. At the drop of a hat, it would be easy to find for-widows-only financial "workshops" offered by stockbrokers & by unappetizing financial advisors. Won't you please stay away from all of these, for the time being.

my last thought is to identify someone whom you trust who is close to you. It can be a family member, one or more of your children, or a good friend, or even an outsider like a minister. It should be a person with whom you can let your hair down, reveal amounts, show & discuss documentation & review decisions, all in a way that we in an anonymous forum cannot.

in the meantime, if perchance your inheritance comes to you in the form of 100% cash (some executors liquidate holdings in order to deliver cash), a wise temporary move would be to invest this in one or more short-term GICs. Short-term, as in 3-9 months. If this would be the case, then the bank where you have always dealt would be a reassuring & practical setting for this temporary arrangement.


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## Abha (Jun 26, 2011)

It might be a good idea to consult two or three different advisers and then make an educated decision.

I know it will cost more up front, but you'll probably have a really good understanding of the pros and cons of certain investment vehicles and strategies.

Also ask the advisors if they are making a commission on any investments they recommend. If they are, it's a red flag.

Sorry about your loss.


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## RedRose (Aug 2, 2011)

Thank YOU ALL so much again for the great advice.

It is just that I have a deadline to keep, I was given 90 days and its up in 2 weeks. It is my husband's pension, a large lump sum, I am opting for instead of a monthly pension but the sum has to be transfered into a registered plan.
If I take the monthly pension and only live a short time I would have missed the opportunity to leave the amount to my family members. It seems the lump sum can generate an income stream and still remain mostly untouched.

I wanted to keep this knowledge from my adult children as they are both big spenders and would have plans for my nest egg if they knew the amount I was going to receive.

I have yet been unable to find an unbiased financial advisor and time is running out. I have to complete a Transfer pesnion Rev Canada T2151 form and it can be split to several banks institutions. I thought it might be safer to divide it up rather than all the eggs in one baskets so to speak.

Thank you so much again for all the suggestions and good reading on this board.


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## MoneyGal (Apr 24, 2009)

RedRose. 

If you are 62, your chance of living a long time is quite good. In fact, your chance of living to age 90 is about 35%. 

If you do NOT take the pension, and you live to age 90 (or beyond! Your chance of living to age 95 is about 15%, and that chance will go up as you age), will you have enough money to sustain yourself?

Your average life expectancy - which you have a 50% chance of outliving - is to age 83. Will the lump sum take you to age 83, which is 21 years?

What will you do if you run out of money? 

Have you talked to any financial advisors who do NOT have a vested interest in you taking the money out as a lump sum? 

Have you thought about other ways to provide a lump sum to your children, if that is one of your goals? 

Is the income stream that you can apparently generate from your lump sum without touching the principal exposed to: stock market risk, interest rate risk, inflation risk, or sequence of returns risk? How would the funds be invested to generate the income stream? Has an advisor simply assumed that you can withdraw a "safe" 4 or 5% with no further calculations?

*The reason that your husband's pension commuted value is a large sum is that it is valuable*. Be very careful about trading that guaranteed income stream for a maybe income stream that will work out if the right conditions prevail. 

(I'll get off my soapbox now, or perhaps someone would like to join me.)


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## andrewf (Mar 1, 2010)

I would not be in such a hurry to take the commuted value, either. Is there a possibility of taking part of the commuted value and still receiving a reduced pension?


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## Four Pillars (Apr 5, 2009)

To hell with your kids - worry about yourself! 

Do you have any money or income streams other than the pension/lump sum portfolio? 

If your income will be sufficient without getting the pension, then switching to a lump sum might work out. Or has MG has said, if you can withdraw a small amount of the lump sum and get by (ie max 4% per year - 3% might be better).

If this pension is all you have, then I would be loathe to give it up. 

Don't forget that you can still save money from the pension payments which can be given to your kids.


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## Charlie (May 20, 2011)

When you talk to the financial adviser, ask them to compare the lump sum option to the price of an annuity with similar features. Then you can see if your pension option is a better then market deal. It still may not be your best option, but at least you'll have an objective measure. Something to balance with your overall decision and the other factors involved -- your financial plan, viability of the paying company, your health prospects,etc.

If you know an accountant, you might want to have a chat with them. A CA, CGA or CMA. They're good at crunching the numbers, and can help you understand the advice given to you by the financial adviser -- without a bias of earning commission on a sale. If you do go the lump sum -- make sure the person you invest with respects your risk profile. Stay away from any 'special' deals, 10%+ returns, or that nice man at the church who has an in on some fancy private investment deal. Make sure you understand what you're invested in, and the risks therein.


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## MoneyGal (Apr 24, 2009)

RedRose said:


> If I take the monthly pension and only live a short time I would have missed the opportunity to leave the amount to my family members. It seems the lump sum can generate an income stream and still remain mostly untouched.


This just raises red flags for me. 

If an advisor said this, and it is being repeated by the OP, what is actually being said is: "if you move the pension over to a lump sum, you will be protected against ONE risk - liquidity. In exchange, that lump sum will be exposed to longevity, inflation, sequence, and other market risks. But I'm not going to mention those, or I'm going to suggest I can magically overcome those risks somehow without putting either the capital or the income stream at risk."


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## Four Pillars (Apr 5, 2009)

Good point MG.

One thing to know about advisors is that if you are talking to one that makes money from commissions (as most do) - they can make a lot of money from your portfolio if they can convince you to take the lump sum and invest with them.

If you keep the pension - they get nothing.

This doesn't mean a commissioned advisor will deliberately mislead you, but money can be a powerful motivator.


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## MoneyGal (Apr 24, 2009)

Charlie said:


> When you talk to the financial adviser, ask them to compare the lump sum option to the price of an annuity with similar features.


I'd expect that the annuity purchased on the open market would have a premium of at least 30%. 

The pension is required to use a unisex mortality table; the insurance company is under no such restriction. 

This makes DB pensions for women a much better "deal" (on average) than for men (on average). 

This is a case in which the implied longevity yield calculation is very relevant. 

Go to http://www.cannex.com/canada/english/ - select Canada - select ILY to learn more.


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## Charlie (May 20, 2011)

one last thing Rose...

Your 2 week deadline is to choose between the pension and lump sum.

If you've decided to go lump sum,the funds can go to any RRSP account. And you can transfer it about once you've settled on an adviser. Don't feel pressured into buying a portfolio you're not comfortable with, or committing to an adviser before you're ready. And until you're committed to a portfolio, don't buy anything that carries big deferred sales charges or is otherwise not liquid. Stick to cash equivalents -- GIC, high int bank accounts etc. 

Interesting info on the annuities, MG. I guess you have to balance this with the strength of the payer, and the appropriateness of the annuity in her overall plan.


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## MoneyGal (Apr 24, 2009)

Charlie said:


> Interesting info on the annuities, MG. I guess you have to balance this with the strength of the payer, and the appropriateness of the annuity in her overall plan.


What is being balanced, here? 

Are you comparing the "strength" of the DB pension plan with the "strength" of an annuity provider?


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## Larry6417 (Jan 27, 2010)

Rose, a defined benefit plan is the dream of an awful lot of folks. If you're in good health and the sponsoring organization is in good shape, it would be very hard to match its benefits by investing on your own, especially since you say you're not financially savvy. Do you really want to worry about making investment decisions for the rest of your life? MG's book makes a great point: people with guaranteed income streams in retirement are much happier than those who don't have a guaranteed income stream. Your kids can take care of themselves.


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## humble_pie (Jun 7, 2009)

what i know about pensions could be written upon a grain of flour. However, fools do rush in.

larry has an excellent point. Plus it seems to me that a lot depends on what are the other assets that are outside this pension. For example, is there a house.

assuming no spousal trust in the will, and assuming there is a residue in the estate that goes directly to the widow in outright ownership, and assuming that the widow herself may own other assets and these assets might include the family home, then all of these items together could form the non-guaranteed part of the heritage that could eventually be left to the offspring.

this group of assets could end up having major value. They could make a splendid inheritance imho.

meanwhile, "Rose" would have the comfort of an assured pension income, with no work or bother to herself, for the rest of her life.


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## MoneyGal (Apr 24, 2009)

Larry6417 said:


> MG's book makes a great point: people with guaranteed income streams in retirement are much happier than those who don't have a guaranteed income stream. Your kids can take care of themselves.


Ah, the story of the two Gertrudes. My favourite part of the book. Here's a free download of Chapter 1, which unfortunately does not include the two Gertrudes:

http://media.wiley.com/product_data/excerpt/97/04706809/0470680997.pdf


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## Larry6417 (Jan 27, 2010)

Rose: if your sole concern about taking a pension is leaving an inheritance for the kids, there are other options. As HP said, other assets could form an inheritance. Also, another alternative may be life insurance. Again, a good financial planner can help you.


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## RedRose (Aug 2, 2011)

The Pension is from PostMedia, not too sure how strong they will be until I am 83 or 92 that is my quandry.

3K a month for life if they stay in business or 500K lump sum to invest and at least I have some capital. This was my thinking to invest the capital.

If I don't survive the pension ceases so no capital.

I greatly appreciate the differing perspectives on this.


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## andrewf (Mar 1, 2010)

Hmmm. I'd rather have an annuity from an insurance company than PostMedia, myself.


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## RedRose (Aug 2, 2011)

That's why I was opting for the lump sum but with some safe diversified investments. One advisor told me I could get into a variable annuity...not sure what that is.

Seems I be best to move it to the banks until I learn more about investing.

Thank you all again for your great input, it is sincerely appreciated.


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## MoneyGal (Apr 24, 2009)

A variable annuity with a guaranteed minimum withdrawal benefit would pay $25,000, non-indexed, as a maximum, presuming the whole thing is locked in to the product. 

The DB pension pays $36,000 - is that inflation-indexed?

Let's say you put $250,000 into the VA with GMWB - then you have a payment of $12,500 (non-indexed) and the remainder is in stocks with a 4% "safe" withdrawal rate...that gives you $12,5000 + $10,000 = $22,500. 

An annuity purchased today in the open market would pay approximately $34,000 per year, non-indexed, with a 10-year guarantee. 

There's a lot to consider here. You seem to have decided to take the lump sum out. I wish you well.


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## RedRose (Aug 2, 2011)

I am just concerned if the company does not succeed I will lose all and then no income at all. 
It is not indexed.
I was going on the premise, "a bird in hand, better than two in the bush." Now I am thinking it all through, it is becoming increasingly complex for my tired brain.


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## Four Pillars (Apr 5, 2009)

RedRose said:


> I am just concerned if the company does not succeed I will lose all and then no income at all.
> It is not indexed.
> I was going on the premise, "a bird in hand, better than two in the bush." Now I am thinking it all through, it is becoming increasingly complex for my tired brain.


I'm not familiar with the exact rules, but I don't think it's possible to lose everything. There is a government fund (or maybe industry fund) that will cover a certain percentage of your pension if the fund fails.

MG knows the details.


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## RedRose (Aug 2, 2011)

*WOW! MG...*You certainly are knowledgeable. I am very appreciative and thank you for all those calculations. I really don't know who, or where to turn to.

Would a CA be the best person to book an appointment with? 
Or another Financial Advisor? I can't seem to find an unbaised one, they all work for instutions.

*Four Pillars,* Thank you for telling me about the pension fund being covered by gov't or industry. I really did not know that part. What confuses me is what happened to the people at Nortel in the first chapter of MG's book.
Did they lose all their pensions...


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## MoneyGal (Apr 24, 2009)

Annuities are covered by Assuris, an annuity insurance fund. If an insurance company is unable to meet it's obligations, they are transferred to a solvent insurance company. This has happened once in Canada, after Confederation Life was liquidated in 1994. No annuity-holders lost any money as a result of the transfer. 

Company pension plans are not "guaranteed" in the same way. If you genuinely have concerns about the long-term solvency of your company pension plan, they you need to cover that risk somehow. There are lots of different options.

Working for an institution does not necessarily mean a broker is biased. However, if the advisor is paid only for managing money, they are not going to have an unencumbered view into assessing whether keeping money in a company pension plan is the right choice for the client, given all relevant factors.


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## Four Pillars (Apr 5, 2009)

My bad - I got the annuity insurance fund mixed up with pensions.

Like I said - MG knows (a lot more) than I do about that stuff. 

Ontario does have a pension benefits guarantee fund which will guarantee the first $1,000 per month of pension benefits.


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## MoneyGal (Apr 24, 2009)

RedRose said:


> *WOW! MG... I am very appreciative and thank you for all those calculations. I really don't know who, or where to turn to.*


*

Those calculations took me less than a minute. Are you saying that none of the advisors you met with at banks or Edward Jones were able to provide this extremely basic information? *


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## RedRose (Aug 2, 2011)

*MG,* Yes, this is the first time I have seen it presented with calculations. 
Each person at the bank and the guy at EJ just told me about the mixed basket as they call it. Sheesh! I am so confused what to do.
Leave it with the pension fund at PM? or transfer to 3 institutions to divide it up? I am losing my mind over this I can't think clearly as I am still overcome at times with grief.
I do appreciate the education I am getting here and from your book.


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## Four Pillars (Apr 5, 2009)

@RedRose - Just to simplify things a bit. The only decision you need to make right now is whether to keep the DB pension at PostMedia. That's all you should focus on right now.

The other stuff can wait - if you end up taking the lump sum, it can be put into a high interest savings account at a bank (or several banks if you wish) and then take your time as far as investments/advisors go.


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## CanadianCapitalist (Mar 31, 2009)

RedRose said:


> I am just concerned if the company does not succeed I will lose all and then no income at all.


I think you are under the impression that if PostMedia goes bankrupt, the pension plan will not make *any* payments to you. That's not true. The pension plan's assets are likely to at least partially cover its obligations. And if the pension plan has no assets, the Ontario Benefit will pay out $1,000 per month as Four Pillars pointed out.

MoneyGal has given you a lot of useful pointers to think about. I urge you to consider them carefully. I also ask you to keep in mind that the advisors at the bank have a vested interest in you taking a lump sum out and you should be aware of it.


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## Charlie (May 20, 2011)

MG -- am I understanding your previous post correctly?

Indexed annuity - $25K/yr (guaranteed minimum withdrawal guarantee -- is this the full $500K (up to 20 yr's worth of payments) Is there a potential step up in 5 yr intervals depending on returns?)
Basic annuity - $34K/y (10 yr guarantee and no indexing)

vs

PM pension -- $36K/y (assume no guarantee and no indexing -- possibly higher risk of default)

vs

Portfolio returns on a RRSP/RRIF of $500K 

Rose -- don't be feel bad about being overwhelmed. This is heady stuff. Once you understand your alternatives, it makes it easier to talk to the financial adviser. (and always remember -- they generally have your best interest at heart -- but they'll earn a hefty commission on managing your funds or selling an annuity. They earn nothing on the PM option).

And thanks MG for your info on this stuff -- most of us overlook annuities as an option.


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## MoneyGal (Apr 24, 2009)

Charlie said:


> MG -- am I understanding your previous post correctly?
> 
> Indexed annuity - $25K/yr (guaranteed minimum withdrawal guarantee -- is this the full $500K (up to 20 yr's worth of payments) Is there a potential step up in 5 yr intervals depending on returns?)
> Basic annuity - $34K/y (10 yr guarantee and no indexing)
> ...


Not exactly. 

A "variable annuity with a guaranteed lifetime income benefit" or GMWB as they are more commonly called in Canada pays a flat (non-indexed) 5% of the deposit value for the lifetime of the individual. This is now the much more common instrument, not the older seg funds that were limited to 20-year guarantees. 

$500,000 * 5% = $25,000 for the lifetime of the depositor. This option preserves some estate value unless the account is "ruined" (runs out of money), in which case the $25,000 is still payable but there is no residual value. The residual value will be eroded by relative high fees. There is a potential of account "step-ups" which increase the base upon which withdrawals are calculated. More on that in a minute. 

Indexed annuity - rare in Canada. The market is very thin. I didn't get an indexed annuity quote...instead I pulled the most common annuity quote, which is single life with a 10-year guarantee inside an RRSP. This preserves some estate value only if the annuitant dies during the guarantee period. An indexed annuity would decrease the payout by up to 25% of the non-indexed amount. 

PM pension - apparently no indexing (this is relatively rare but I have no knowledge of the OP's survivor's pension). There is counterparty risk BUT there is counterparty risk with an insurance company annuity as well. 

There's just a lot to grapple with here. I don't know whether the OP knows what her income needs are in retirement. I don't know what other assets she holds which could be converted to a stream of income in retirement OR an estate (by the way, I'm not asking). 

If $36K is the benchmark - because that's what the DB pension would pay - my suggestion is that it is difficult to replicate that income stream and maintain any liquidity without putting the capital at risk. 

Dumping the whole $500K commuted value into a GMWB would preserve some liquidity BUT the income stream is severely dampened. Buying an annuity on the open market preserves the income stream but removes liquidity. 

Putting the whole amount into the market exposes the income stream to new risks. Limiting withdrawals to a "safe" 4% means the OP can only withdraw $20K per year. 

There are significant tax issues. I doubt the OP has RRSP room of $500K to shelter the entire commuted value (but I have no idea). If she takes the lump sum and is able to shelter some, the type of annuity chosen will affect the payout amount. 

I will do a separate post on the probability of re-sets/step-ups with the GMWB.


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## MoneyGal (Apr 24, 2009)

Analytic piece on the probability of a stepup with a GMWB: 

http://www.qwema.ca/wordpress/wp-content/uploads/2011/02/QWeMA-Newsletter-Feb2011.pdf


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## Charlie (May 20, 2011)

Thanks a bunch MG. I see I wrote 'indexed annuity" rather then 'variable annuity' but you addressed everything I meant to ask...

Someone should write a book about this stuff .

I keep thinking a knowledgeable investor, with a stomach for some risk could design a dividend portfolio with close to a 4% yield and get a much greater upside with only minimally more risk. But I guess the potential for such returns does cost risk -- and those Citibank shareholders lost their principal and dividends despite decades of consistent payouts...

I think tax is all moot here. I believe she can transfer the pension to a RRSP (possibly a locked in one - though at 62 that's likely not an issue?). Not about to look up the details, but that's what her posts imply and I know that's how it worked for a colleague who got a lump sum pension payout. Makes sense theoretically too -- a sheltered earned pension stream simply going to different pension vehicle...This means she doesn't have to worry about form of income, differing rates, gross ups etc. Just risk, income and liquidity. Tough decision she's facing on a tight deadline.


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## humble_pie (Jun 7, 2009)

i had to go back & review MG's annuity comparison message again. And yes, it did say what i'd remembered:

_" An annuity purchased today in the open market would pay approximately $34,000 per year, non-indexed, with a 10-year guarantee." _

meanwhile Rose tells us that the PM pension would pay 36,000 per annum, with no guaranteed payout period. In addition the possibility exists that the company might not last the rest of Rose's lifetime.

other knowledgeable souces here seek to reassure Rose that even if PM were to fail, her pension would not cease entirely. However the suggested offerings seemed minimal; it was said there would be "some" assets left in the pension plan, or failing that an ontario government plan would contribute $1,000.

in addition, an event like failure of PM as insurer would mean a huge amount of anguish for Rose. The long-drawn-out uncertainty of such a proceeding would exact a toll in the form of stress & anxiety.

so there didn't seem to be any question, in my mind. Why wouldn't a person in Rose's circumstances withdraw the funds from PM, then buy one annuity, or better two or even three annuities, from large solid insurance companies, gladly forfeiting the extra 2000 in income in return for the security of more solid insurers plus the 10-year guarantee.

nor would all of the lump sum have to be spent purchasing annuities, as far as i can make out. A portion of the PM payment could be used to set up or add to a portfolio of stocks, bonds & etfs. This would depend upon what other assets exist & what other income stream could be counted upon. This option would perhaps appear unappealing given the market carnage this week.

there is another tentative lesson to be drawn here & that is the difficulty of finding a first-rate advisor. Many seem to serve as sales references.


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## RedRose (Aug 2, 2011)

I am extremely grateful for this expert advice and clarification. This forum has more than surpassed my expectations. It is just unbelievable! I really never expected such support. You guys are wonderful especially MG.

I do feel my mind is still not able to grasp these concepts yet. I am desparately trying to understand, reading and listening to education video clips on pensions. I guess the average jo or joanne does not have the expertise to comprehend the choices. 

I have called the pension gal at PM and asked for an extension and it seems it is not a problem. The formal letter offer does state 90 days though. I have the extension in a few lines in an email hope that is legal for peace of mind.

I believe at this point I need a professional to help me.
Would I be better to pay for the services of an Actuary, a CA or FP?
I have already contacted a lawyer to prepare my Will, transfer the house title and POA. I don't think she would have this expertise but I guess she might.

I do have a couple of hundred in RRSPs and another $$$ sum in High Interst Sav Account. I have not opened a TFSA yet as I don't know where I am going to invest, what mixed bag of products they will put in my basket, as they say. I also own my modest home.

Thank YOU ALL so very much and I look forward to learning more from you all and hope to get this issue resolved soon.


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## Four Pillars (Apr 5, 2009)

@RedRose - Why don't you see if MG is available for hire?


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## MoneyGal (Apr 24, 2009)

I'm not.  But thanks for the vote of confidence.


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## RedRose (Aug 2, 2011)

Yes *4Pillars* I would just love to hire her to help guide me thru this minefield of decisions. 
*MG* do you have a double in other Cities?


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## RedRose (Aug 2, 2011)

I now have a CA working on my decision with me. He will consult an actuary too. Hopefully these expert brains will help me decide.
Thanks again to you All for pointing me in the right direction and giving me another perspective on this.


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## RedRose (Aug 2, 2011)

CA seems to be a fan of me taking the lump sum and is looking into some areas for me to invest, he suggested rotating annuities and bonds so far.
I am in a frozen state right now... will see what materializes on the horizon.


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## humble_pie (Jun 7, 2009)

rose i have a certain sense that may be didja-voo-all-over-again as perhaps we've already touched upon this issue. That the advisor who stands to be able to sell you replacement pension plans, annuities, investments, advisors, etc if he can only woo you away from PM & into taking the lump sum ... is ... going ... to woo you ... away ... from PM.

i remembered that there was one message in this thread that pointed out you do not have to be in any kind of rush about finding new investments or new advisors. That the first decision to make was whether or not to take the lump sum. Here is the message. It's from Four Pillars. August 4th at 1:01 pm. Look back, if you wish:

_@RedRose - Just to simplify things a bit. The only decision you need to make right now is whether to keep the DB pension at PostMedia. That's all you should focus on right now.

The other stuff can wait - if you end up taking the lump sum, it can be put into a high interest savings account at a bank (or several banks if you wish) and then take your time as far as investments/advisors go. _

rose i don't wish to stress your situation in any way. But i would be happy to hear that the CA was explaining to you more about *why* it's better for you to take the lump sum & less about *how* he can find zippy investments once the lump sum has been obtained.

somewhere you mentioned 500,000. It would take me at least a year, possibly longer, to invest this amount. The important part of 4 Pillars' message is that it's fine to take this time. Proceeding with baby steps can often be a good way to tackle a job that seems overwhelming at first.


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## leoc2 (Dec 28, 2010)

humble_pie said:


> ...
> somewhere you mentioned 500,000. *It would take me at least a year, possibly longer, to invest this amount. *The important part of 4 Pillars' message is that it's fine to take this time. Proceeding with baby steps can often be a good way to tackle a job that seems overwhelming at first.


Humble ... can you explain how it would take a year to invest this amount?


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## RedRose (Aug 2, 2011)

Thank you Humble for your candid reply. I am going ever so slow these days and cannot think clearly. I was just giving an update to all those that offered me some assistance.

CA wonders too about the strength of PM that is why he suggests taking the lump sum from what I gathered from our conversation which was brief.
Thanks again I greatly appreciate your thinking things out. Two heads are better than one huh?


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## RedRose (Aug 2, 2011)

> The other stuff can wait - if you end up taking the lump sum, it can be put into a high interest savings account at a bank (or several banks if you wish) and then take your time as far as investments/advisors go.


Also, can't do this without having to pay income tax on the lump sum withdrawal. Has to go into a Registered Plan of some sort to avoid that.

Thanks again.


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## Charlie (May 20, 2011)

No tax on the lump sum Rose. It can go into a high interest savings plan within an RRSP. There's no need to commit to specific investments -- the RRSP can be your holding tank.


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## RedRose (Aug 2, 2011)

Oh Thank You Charlie for this information.
I really dont know which way to turn with this one.
500K now, and worry how investments are doing...
OR: receive 1.1 million in payments, if I survive to 92 and take the pension route, and worry that the pension fund company remains solvent.
Sheesh! this is a tough one for sure.
Thanks again everyone for trying to help me to solve this conundrum.


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