It seems that every financial study today suggests that Canadians are not saving enough money for retirement. One of the biggest fears for anyone especially retirees is the fear that you will run out of money.
This was a real outcome for Peter who retired with $1.2 million in RRSPs and investments back in 2007. At the time, Peter’s small pension along with his early CPP would be far from enough money to create retirement income. He went to a broker who suggested that he could invest into some income trusts, dividend stocks and income mutual funds to generate an income of $72,000 per year. That translated into a 6% withdrawal rate.
Things were going OK until the financial crisis hit in 2008 when his portfolio took more than a 30% drop to about $850,000. His broker wrote a letter to all his clients telling everyone to “hang in and sit tight” until the markets recover. The p
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John Garcia August - 4 - 2010
Many Canadians are reasonably well set for retirement, financially speaking, thanks to personal investments and social security provided by the Canada Pension Plan (CPP) and Old Age Security (OAS). However, many Canadians avoid thinking about some worst-case scenarios – that they may end up requiring long-term care or may suffer from Alzheimer’s Disease or otherwise require extended care. No one likes to think this will happen to them or their parents but these kinds of things happen everyday.
Two case studies of families caught up in the need for senior care show how worst case scenarios can play out. In those stories, told here, one turns out better than the other.
The need for long term care insurance
Jim Ames and his daughter Margaret thought he was set for retirement. Had
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