Interesting article on how the economy is changing and how your retirement is affected by it!
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Michael Nairne, Financial Post · Saturday, Feb. 19, 2011 Wealthy people have a peculiar problem. Yes, they pay a boatload of taxes, but that alone is not the issue. Much of the income of many high net worth investors is taxed at the highest marginal rate. With top marginal rates approaching 50% on interest and other income for most Canadians, this tax bite seriously erodes investment returns. Take a bond yielding 4%, for example. At a 50% tax rate, the after-tax return is only 2%. That is just the tip of the iceberg. This calculation fails to consider inflation. Net Read more…

  Debt-laden funds. Defined-benefit plans make way for ones with defined contributions   By PAUL DELEAN, The Gazette January 19, 2011     Companies with large pension-fund deficits are starting to play hardball with employees, and it may just be the tip of the iceberg. “Used to be that few employers were ready to fight over it, but times are changing,” Michel St. Germain, a partner at Mercer Canada and pension-fund consultant, told the firm’s annual pension-outlook conference in Montreal yesterday. In Sudbury, a yearlong strike did not deter Vale Ltd. from its plan to switch new employees to defined-contribution plans, Read more…

Is your main reason for contributing to an RRSP each year the expectation of pocketing a juicy tax refund in the spring? While cutting the past year’s tax bill is the carrot that makes most Canadians max out their RRSP contributions, there are plenty of situations where one may be better off not contributing at all. This is especially the case now that there’s a viable alternative: the tax-free savings account (TFSA) introduced in January 2009. The TFSA is a sort of mirror-image RRSP in that it does not generate an upfront tax refund. Apart from the refund, new investors Read more…

While Ottawa has so far turned a deaf ear to calls to cut the minimum RRIF withdrawal rates, you can expect political pressure to mount in five years. Why? As always, just watch the Baby Boomers. Much has been written about the first crest of Boomers reaching 65 this year. Six years from now, this leading edge will crash on the shores of forced RRIF withdrawal rates. Tacita Capital president Michael Nairne recently made waves when he described the “dark side” of RRSPs: the often-overlooked fact that they must be converted to Registered Retirement Income Funds at age 71. Retirees Read more…

Montreal Gazette: September 8 2010 By JONATHAN CHEVREAU, Financial Post September 8, 2010 As Baby Boomers head for the crowded retirement exits, there may not be room for them all. The dominant zeitgeist among that crowd will be pension envy — of the lucky few who stuck with a single employer through most of their working career and now enjoy an old-fashioned, guaranteed-for-life pension plan. There will be two other groups of what we’ll call “pension enviers.” The first is a pensionless crowd that never attempted to save a dime and will either work until 65 or 70 or find a Read more…

If you’re thinking of retiring soon but are not sure if you are financially prepared, you may want to seek the professional guidance of your advisor. in the following story, we learn how financial planning allows a couple to leave their stressful corporate careers behind to start their own part-time consulting business, while ensuring they will have the income to cover their immediate and long-term financial needs.

1. The solution they provide does not take into considerations the real dangers she will be facing.

They recommend that she waits till she pays off her mortgage and car loans before she starts saving! Only then will she have extra cash flow to start putting away.
She NEEDS to start building Capital today for her future NOT when she turns 50 years old!!!