Canadian Personal Finance News | May 2016

"The basics on how to get started, what are the limits, what you can and can’t do as far as amounts contributed, the number of RESPs per beneficiary and how to use the grant, and much more."

"When expressed in terms of consumption, 70% of respondents preferred the annuity. But when expressed as an investment, only 21% of respondents choose the annuity. Both versions of the question offer the same returns, but the answers elicited differ greatly. Framing an annuity as an investment makes people worry they will die early and “lose” on their investment. When expressed as lifetime consumption, the annuity option sounds less risky and more attractive."

"I stopped once our income greatly exceeded our spending. As retirement approaches, however, I wanted a good idea of what our actual annual spending is. So I started doing the math but using a Black Box annual calculation rather than writing down every $1.75 spent on a parking meter. Here’s how I estimate our annual expenses and spending without keeping a log or journal."

"So much for the logical part of all this. Let’s get to the more emotional parts. The talking head looks important. He has a nice suit and tie and looks smart and confident. He’s probably very likeable too. Maybe he’s the kind of guy who could get you to go $100k above the price limit you planned for buying a house. It’s very hard to look at a confident, likeable person and say 'He’s full of it. He has no idea if what he’s saying is true or not. If he really knew anything, he’d be making billions himself in currency markets instead of talking on television.'"

Those still accumulating for retirement can also be affected but there are some important caveats, explains Michael Kitces.

"May you live in interesting times." The world is a pretty amazing place, moreso today than ever before. We have instant-on, ready access to more information

"First and foremost, it implies that doing limited or even zero saving during the child-rearing phase – or conceivably even “negative” saving and accumulating some debt – is actually normal, and expected, and absolutely fine… as long as the couple is prepared to maintain their personal spending after the kids leave the house and use the empty nest phase as an opportunity to finish their retirement saving. In other words, making parents in their 30s and 40s feel guilty for not saving enough is unnecessary (and in some cases even cruel to suggest)."

"Financial success doesn’t happen by accident; it’s the result of intentional, persistent action towards a specific goal. Sometimes our goals are so big that it can be difficult to figure out where to start."

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