My Own Advisor explains how he considers his defined benefit pension to be like a large bond that allows him to take more equity risk with the rest of his portfolio. This makes a lot of sense, but something that many people don’t consider with defined benefit pensions is the risk that you won’t collect as much as you think. If you decide you can’t stand your job or get laid off, you may be left with only a very modest pension (or none at all if you take a commuted value when you leave). Even government jobs aren’t as safe as people used to think, particularly with all levels of government facing huge deficits. When balancing a portfolio, it makes sense to only consider the value already accumulated in the pension rather than the entire future value if you stay until retirement age.
Boomer and Echo tells a story of parents financially supporting spendthrift adult children at the expense of their responsible children. Perhaps living only for today pays off if you have wealthy parents willing to bail you out.
Canadian Dream Free at 45 makes the case that good financial habits are more important than far-away goals of huge retirement savings.
The Blunt Bean Counter takes a look at how Canadians use RRSPs and whether they raid them too soon. The answer seems to be that some leave RRSPs alone until retirement, some raid them too early, and some have well-laid out plans for using them prior to full retirement. This one generated quite a few comments.
Big Cajun Man has some fun creating some sayings in Mad Lib style. My favourite is “Hoarding is valuing the invaluable”.
The Wealth Steward found reasons to be wary of private REITs.
Canadian Capitalist gives us a compilation of Warren Buffett’s writings freely available online.
Preet Banerjee wants your financial questions for The Bottom Line Panel on CBC’s The National.
Young and Thrifty explains how to reduce your payroll taxes using a T1213 form.
Retire Happy Blog says there is value in simplifying your personal finances and suggests ways to do this.