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Old 11-03-2011, 02:03 PM   #21
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The pensions will have cost of living increases annually (not a big deal and I'm not counting on it). .
Whoa! COLA's are a HUGE deal! Remember, we will have inflation. Non-COLA'd pensions will become near worthless after a few decades.

Go to FireCalc and run your numbers. Try checking the COLA'd box and then do a run without the COLA. It makes a big difference.

I wish my pension was COLA'd!
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Old 11-03-2011, 03:16 PM   #22
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I really was surprised at how many people at against bankers. That's quite an eye opener.
Paranoia runs strong here. (I'm rather paranoid, myself -- I wouldn't trust a banker.)
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Old 11-03-2011, 04:02 PM   #23
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CN banks did not play the games that US banks did. I don't think any of them failed.
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Old 11-03-2011, 05:32 PM   #24
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Most helpful of all: He showed me that by working part-time, I may be shooting myself in the foot. The extra income will mean that I won't qualify for certain pensions after age 65. They claw back the government pensions if you make too much per year!
I think I'd double check on that one. I don't know about Canada, but in the US we have a similar rule that working part-time may mean a delay in part of your SS (Social Security) income, but many people erroneously believe that you lose it, when in fact they simply recalculate future amounts to incorporate these earnings...so you would actually benefit from this later on in life. Of course in your case, since you mentiond dying at 67, this may not come into play....but I certainly hope you are wrong.

Here is a link to the page where this is discussed:
How Work Affects Your Benefits

and an excerpt is...
"You can get Social Security retirement or survivors benefits and work at the same time. But, if you are younger than full retirement age and earn more than certain amounts, your benefits will be reduced. It is important to note, though, that these benefit reductions are not truly lost. Your benefit will be increased at your full retirement age to account for benefits withheld due to earlier earnings. (Spouses and survivors who receive benefits because they have minor or disabled children in their care do not receive increased benefits at full retirement age if benefits were withheld because of work.)"
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Old 11-03-2011, 05:43 PM   #25
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I am a circumspect person but I have noticed that the local bank has done a good job with my Mother's finances. She is pulling down 5% on her long term retirement CDs. I can't see how they are making any money.
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Old 11-03-2011, 05:57 PM   #26
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I think I'd double check on that one. I don't know about Canada, but in the US we have a similar rule that working part-time may mean a delay in part of your SS (Social Security) income, but many people erroneously believe that you lose it, when in fact they simply recalculate future amounts to incorporate these earnings...so you would actually benefit from this later on in life. Of course in your case, since you mentiond dying at 67, this may not come into play....but I certainly hope you are wrong. )"
It's quite a bit different in Canada. You can't collect Canada Pension if you are still employed. New rules state that if you return to work, you have to go back to paying into the pension fund. The second gvt. pension, called OAS, is for people 65 and older. It gets clawed back, on a sliding scale, if a person's income is over $66K and disappears completely if the income is over $102K. There's also a Guaranteed Income Supplement for people who have very low income - I would not qualify for that one.
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Old 11-04-2011, 09:20 AM   #27
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I really was surprised at how many people are against bankers. That's quite an eye opener.
The mutual fund RRSP was held at the same bank - all I did was move money from one account to another.
He also had me sign a disclosure stating that he did not receive a fee for his services and that he only advised me on the things I had asked for.
I guess Canadian banking practices are different than US ones.
We're skeptical because over the years many alleged "financial advisors" (including bankers) have recommended investments for which they're compensated. You didn't pay a fee, but I find it very difficult to believe that the bank has hired him to hand out free advice. At some point in this process the bank is being compensated by some profit-seeking activity for the adjustments made to your investments, and he might even have received a share of the compensation.

If you feel you benefited from the transaction, well, great. Your interests happen to have aligned with his. But be assured that his interests are only aligned with yours if he's getting paid for it. Otherwise he's wasting time (and the bank's money) chatting with the customers.
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Old 11-04-2011, 02:15 PM   #28
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If you feel you benefited from the transaction, well, great. Your interests happen to have aligned with his. But be assured that his interests are only aligned with yours if he's getting paid for it. Otherwise he's wasting time (and the bank's money) chatting with the customers.

I'm not so naive as to believe that the bank gives a flying duck about me.

However, this particular bank has been good to me. This is the same advisor who called me to recommend a re-financing with flexible mortgage rate back when mortgages were at 2% and then called me to tell me to lock in when they started to rise. With his advice, I paid off my mortgage nearly 11 years before I expected to, which has allowed me to save a significant nest egg (for me), and will allow me to retire at age 60 instead of never.
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Old 11-04-2011, 03:36 PM   #29
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My father (who was a teen during the depression) once told me that Social Security actually had two goals: income for the aged and to provide an incentive for older workers to leave the workforce - making room for younger workers.

Overtime premiums were intended to provide an incentive for employers to hire more workers. Wage and price controls in WWII where fringe benefits were exempt largely destroyed that incentive as the incremental cost of a new employee escalated.
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Old 11-04-2011, 04:17 PM   #30
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You are on the right track... looking for some form of feedback and confirmation.

But I would not seek the advice from my banker unless they were a certified financial planner.

Do your pensions have a COLA? Never mind... I saw your response.... it is optional. You need to figure out how you intend to deal with inflation.

Take your time to make sure you have identified all anticipated future expenses.
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Old 11-04-2011, 04:22 PM   #31
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You are on the right track... looking for some form of feedback and confirmation.

Do your pensions have a COLA?

Take your time to make sure you have identified all anticipated future expenses.
They do and they don't. The pension is fixed and they have always given cost of living increases BUT they state that these are not guaranteed and may not be given out if there isn't sufficient funds. Unfortunately, with the boomers retiring, I'm going on the assumption that they may skimp on that benefit in future.

There is a COLA in both of the federal gvt pensions (CPP and OAS).

Without touching any savings, or taking the CPP, I will have about $300 - $500 a month for unanticipated expenses. I think that should be okay. OTOH, my entire life seems to be one giant unanticipated drama lately.
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Old 11-04-2011, 05:43 PM   #32
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We're skeptical because over the years many alleged "financial advisors" (including bankers) have recommended investments for which they're compensated. You didn't pay a fee, but I find it very difficult to believe that the bank has hired him to hand out free advice. At some point in this process the bank is being compensated by some profit-seeking activity for the adjustments made to your investments, and he might even have received a share of the compensation.

If you feel you benefited from the transaction, well, great. Your interests happen to have aligned with his. But be assured that his interests are only aligned with yours if he's getting paid for it. Otherwise he's wasting time (and the bank's money) chatting with the customers.
+1
I was in banking for a number of years. For example,
- Personal Bankers are paid commissions to sell annuities; they even have goals for the volume of business they do in checking accounts, CDs, etc, where incentives are paid.
- Investment Advisors earn commissions on their product sales
- Mortgage lenders earn a commission based on the size and pricing of the loan
- Commercial bankers are typically salaried, but can earn sizable bonuses based on loan volume and deposits.

Everyone has to earn a living but I think the biggest problem is that rarely any of these individuals are properly trained to help you make a good financial decision. I certainly wouldn't rely on the guy who did my mortgage to help me pick a good investment any more than I would rely on my bartender for medical advice (although a rum and coke can be a good sedative). The other problem is the bias that others have mentioned. It's hard to be objective when your recommendation has to come from the 4 alternatives shown on the bank brochure (I think they can be summarized as platinum, gold, silver and plastic).

By the way, the above has a lot to do with why I'm not a banker any more. I kind of sucked at it b/c I would tell people what they really should do (borrow less for example) rather than what the bank wanted the customer to hear (here's the maximum you'd qualify for). In fact, most customers didn't really want to hear this kind of advice from their banker either. They usually just wanted to know how much they could borrow as well.
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Old 11-04-2011, 06:22 PM   #33
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But I would not seek the advice from my banker unless they were a certified financial planner.
I think very few advisors in banks are CFPs, very few........
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