Canada's Retirement Expert: 5 Ways To Boost Retirement Income Without Saving More (Fred Vettese)
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- Опубліковано 6 чер 2024
- In this video, we have a special guest. Fred Vettese is the author of 'Retirement Income for Life" and we discuss some of the key takeaways from his book that will help you maximize your income in retirement.
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Financial Resources I personally recommend:
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0:00 - Intro
0:43 - Why Write 'Retirement Income for Life'?
2:07 - 5 Retirement Income Enhancements
7:23 - Parallel Wealth's 3 Focus Areas
8:49 - A Common Retirement Misconception
13:18 - How Should You Adjust Your Plan?
15:17 - Professional Advice
This presentation is intended for information purposes only and does not constitute an offer to buy or sell our products or services nor is it intended as investment and/or financial advice on any subject matter. Every effort has been made to ensure the accuracy of its contents. Certain of the statements made may contain forward-looking statements, which involve known and unknown risk, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Returns are not guaranteed and past performance may not be repeated.
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DISCLAIMER: The videos and opinions on this channel are for informational and educational purposes only and do not constitute investment advice. Adam Bornn is not registered to provide investment advice and as such does not provide recommendations - those looking for investment advice should seek out a registered professional. Adam is not responsible for investment actions taken by viewers and his content should not be used as a basis for investment trades.
I retired in 2015 and I have read all of Fred Vettese's books including the one he co-wrote with Bill Morneau. In my opinion Retirement Income for Life is the best retirement financials book there is and I have read a lot of them. Follow Vettese's advice in Retirement Income for Life and you won't go far wrong.
Hi Adam and Fred! I bought the book when Adam recommended it in his channel. I am still reading it. Thank you for the follow up chat on this. I really appreciate all your input and guidance ♥️
So excited to see Fred on this channel! he's definitely one of the top experts in Canada and really enjoyed working with him during my tenure at Morneau many yrs ago. Thanks for this video ~ 😊
Fantastic guest!! Great discussion. Thanks Adam and Fred!!
Definitely A great book and strategy! Thanks for interviewing Fred
take cpp at 60 if you expect to live to 74, take it at 65 if you expect to live to 82, and if you expect to live longer, then wait longer
Mr. Vettese, thank you for doing this video with Adam. I'm not close to retirement yet but I have read your book and it helped to give me some piece of mind for when I do get close to retirement.
I also bought the book when recommended and listen to all your video’s excellent information.
Another great and informative video. I know your channel promotes delaying CPP and not enough people do it but I was actually shocked at how low the percentage of people are that don't.
I think one of the biggest reasons for that is too many people think of CPP as a government benefit. It's not. OAS is. CPP is an inflation indexed Defined Benefit pension. The more you put in the more you get out. The longer you wait to take it, the more you get out.
I'm reading the book now. Great examples with solid explanations for the assumptions made, typical risks faced and ways to minimize / mitigate / transfer them and enhancements to make to improve results. Everyone should be aware of what is covered in this book. :)
I have read this book great learning tool
Great video!
What a great line from Fred. "You don't know what you don't know"
Right?! So good. Stuck out to me as well.
“…there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns - the ones we don’t know we don’t know.”
- Former U.S. Secretary of Defense Donald Rumsfeld in 2002
Sounds like a Donald Rumsfeld line 😂
Will do 😊
I met two bank financial advisors- they both advise taking CPP as early as you can- this was back around 2005. This made no sense to me, I have planned to take CPP at 70 at the time of those meetings.
I would have liked to delay collecting CPP but financially couldn't afford to. If you wind up unemployed between ages 60 and 65, it is almost impossible to get a job. Majority of employers do not want to hire someone who will only be there for a few years
I am 62 and was packaged out early. I then applied as car transporter for avis and making $1800 a month working 3 days a week. They love old guys as they are responsible. Even have some guys at 85 still working
@@PapadakosPapadakos exactly. Older workers have integrity
@@PapadakosPapadakos Spot on. I have a couple golfing buddies that have that job in retirement. Supplements their retirement income and they love it. Fully hope to retire by 60 latest myself and hopefully supplement retirement income working PT at golf course, which I would love. 3 steps to a happy retirement, GOLF, GOLF and GOLF 🙂
@@PapadakosPapadakosplease let me know how/ whom you spoke to at Avis , I’m close to 60 and need part time income. Thanks
Whether you can collect CPP or not depends on three factors:
1) Health. If your health is not great and needs frequent medical appointments w/o pay, take CPP ASAP.
2) Work. If you enjoy your work and can take time off at will, continue to work and delay CPP.
3) Family burdens. If your family depends on your earnings, especially children education, then continue WORKING.
Adam. Can you please do a video on people who have a Defined Benefit Pension. I trust your numbers but im not sure about mine. Early RRSP meltdown while having a bridge benefit will drive my Average tax rate up. Doesn't a delay in CPP do the same thing in your 70s because you are getting a 42% boost.
agree...I would like to see this as well, as I also have a DB and a bit higher yearly income than some...
@eileendoonan An RRSP meltdown doesn't make sense to me in my early 60s because I'll just end up with the same income and taxes as when I was working. Then it would push me into OAS clawback as well at 65. I'm planning on a slow burn, maybe$10,000 / yr. Collect CPP at 63 which would be $1000/ month and take that money and maximize my TFSA. Delay CPP makes sense for those who don't have a Defined Benefit pension, but I would like Adam to run those numbers
Both husband & I are lucky to have A DBP and would also be interested in seeing a video on this too.
I bought the book and subscribed to PERC-PRO, Custom. The book shows multiple scenarios of which none represents mine. But still good enough! I think PERC-PRO should also include taxation in the calculation to provide a better picture of the finances. The software has a few flaws and I believe it can be improved a lot. At the end of the day, the best approach is to go conservative in the first few years since there is no way you can account for all possible events in the future.
It’s a fantastic book.
Fred's books were an eye opener for me also. I also recently found the audio book for free on Spotify. The only thing that I wish would work better is the PERC calculator. However I have since found a Canadian company in London, On who has great software which will tell you exactly how much to draw down and you can create different scenerios of drawdown, including CPP, OAS, retirement splitting , use non-registered vs registered etc.. I get nothing for mentioning this as I am only a person that was looking for a better way to make retirement plans (next year). The company is called Adviice. Cheers all.
Very pleased to see Fred on your channel.I enjoy his book and his pieces in the Globe & Mail. Great interview!!
Glad you enjoyed it!
Another comment about PERC and seemingly conflicting information with his other book - Essential Retirement Guide. Fred talks about not needing to cover inflation as consumption spending decreases in retirement at about the same rate as inflation lessens buying power (age 65-80 consumption spend down 26.5%). The PERC uses inflationary rate of 2.2% for entire projection period and I assume that is why total income steady increase year over year. Why would income need to continue to increase if consumption spending is decreasing at similar rates to inflation?
All you generally hear about delaying CPP is the accumulation and breakeven point. I have a friend a few years older who took it at CPP and there simply isn't enough to live on month to month. They had to keep working to make ends meet. So, that is my main reason for delaying, simply having enough to live on!
CPP was only meant to replace 25% of your income (33% with the enhancements in 30+ years). The average at 65 is ~$750, max is ~1350/mo
@@martik6849 only if you receive 100% or at least 80% of CPP....else it is just enough to pay electric/water bills for most retirees
Cpp is never enough to live on. Take it early and maybe put it into rrsp and you're way further ahead than waiting till 70. I took mine at 60. If l waited till 70 I'd have to live to 78 just to break even. And quality of life is much higher from 60-70 then from 70-78.
@@idx1941My wife and I deferred both CPP& OAS to age 70 (we are the same age and started both last year). I get max CPP, my wife 80% of max CPP and we both get max OAS, combined, with just those pensions, we bring in a bit over $63,000 a year. Do it right and you can live quite well.
@@idx1941 I have wondered and searched for the facts if you invested in the money (starting early) at avg TSX increases ... if that was included in the formulae. ... if you have no 'employment income' can you put it in RSP?
My F.P. Says we are good to tire earlier (50). We haven’t sat down yet to review the different ways for income and what works best. One of the things I am really interested in is if I have 15 years of no CPP contributions if taken at 65. and I hadn’t been contributing max. I am assuming my amount will be low so will need to see what we need to draw down in the 10 years (age60) or 15 years (age65) or even 20 years (age 70). My head is already spinning haha
Not sure I agree with Fred on purchasing a life annuity. Generally these products pay a very low rate of return. With basic investment knowledge you can purchase low risk ETF's that pay 2x the return. Adam regarding your first point on "aggressive" early drawdown RRSP. I'm assuming its more related to level loading your average tax rate over your retirement vs aggressive early. Could be wrong but I think the strategy is more related to maintaining the lowest possible tax rate every year in retirement.
I’m a little confused about the CPP deferral until 70. Is the payment amount at age 70 on the government’s website assuming you work until 70? If so how would you calculate the payment amount if you retire at 65 but defer CPP until 70?
No - if you defer until 70, the CRA amount assumes you stopped working at 65.
I think the financial advisors in banks and credit unions lean towards advising people to take CPP/OAS earlier, because they generally want those same people to leave whatever other funds/investments they have, in the bank.
Totally agree...I lost faith in my financial adviser at CIBC when he recommended to take CPP/OAS early ! I know better !
Banks are only interested in making money for themselves
@@1983dmdtaking it or not taking without a deep conversation to understand the clients needs is bad advice. You don’t know my needs so don’t tell me not to take it.
@@dinary0v3 Exactly what I said....My ex CIBC financial adviser had all my numbers with my net worth close to 8 figures and life expectancy...and told me to take it at 60 !!! Come on...
I split the difference and went 67.5
Taking oas early and deferring cpp till 70 is my plan
You can't take oas early, you have to be 65. Take your cup at age 60!
@@idx1941did you watch this video? Your advice is bad.
@@user-pk9of5yb2p my advice is sound. Average life expectancy for a male is 78. I took cpp at 60. So l collect it for 18 years. Waiting till 70 gives me 8 years of cpp. My years from 60-70 will be much more active and healthier years than from 70-78. Why not enjoy the money when you can? Naturally you're free to make the choice for yourself...but don't listen to people who make their money from taking your money!
@@user-pk9of5yb2p they removed my reply to you. So, let me break it down. Let's say cpp at age 60 is 600 a month, and cpp at age 70 is 1200 a month. By age 70 l will have collected 72000 just when you're starting to get your first payment. You'll have to live to 80 to finally break even with me.
Let's say we both die at 75...you will have collected 72000, and l will have collected 108,000.
PERC calculator fails every time I try it. Fails when giving the results stating a network error. I assume the problem is with their server.
Maybe we crashed it with this influx of use?! I'll check in with Fred.
Is this where using a different web browser might work? Try the PERC in chrome or safari etc. See if that makes a difference.
I tried it yesterday and parted with my money for the full version. Tried 3 browsers and it doesn’t work. Have had no reply to my emails. Hoping they fix it real quick.
It’s a gamble. Take it at 60 and get $600. Take it at 65 and get $1100 or take it at 70 and get $1500. When do you need the money? if you can manage without it, by all means wait until 70. Use up your RRSPs.
and if you lucky to live so long.
Do 80 percent have enough savings to fund retirement between age 65 and 70 without their pension?
I would say so.
They would all of had to as all of these people are the ones that waited until age 70 to start CPP.
TIME IS ALL WE HAVE>>EG: 56 yrs stent @ 58 yrs " 5" Bypass ...I guess taking pensions at 70 yrs with terminal cancer is a great wealth...DuH
Do you believe that retiring at age 65 and deferring your CPP and OAS to age 70 is the best option?
Delaying CPP yes - retiring at 65...well I think retiring when the time is right. So very individual based on many factors.
Take cpp at 60 and oas at 65.
@@idx1941if you want less money, sure. Did you even watch the video?
I don’t disagree with the math, but some people want cpp earlier when they are healthy and can enjoy it, travel, or help their children save for a house. Some people have health issues after 70, and can’t really enjoy the money much.
Maybe, but you may need that extra money later, to take better care of those pending health issues.
Taking CPP early gives most people less money in their retirement, including the earlier years. Video coming next week on this.
The one comment I have is I'm not sure the 0.6% investment fee is actually doable. I'm assuming that amount is supposed to cover investment fee and financial planner as there isn't any mention of additional amounts for a planner in the book. And I just see 0.6% as unattainable for a complete financial planning service.
You can manage your investment for between 0.15% to 0.25% and pay for retitement planning separately.
@@alexanabolic5099 so that only leaves 0.25-0.35% for financial planner. I haven't seen any that will charge rates in that range.
@@DoneByDI think this item was solely related to the difference of paying mutual fund fees versus DIY investing. Take a portfolio of say $200,000, with mutual fund MER of 2.5% you end up paying $5,000 per year in fees (hidden in the returns of the funds). If you purchase your own ETFs you can pay as little as 0.3% or about $600 per year. With that difference of $4,400 you can definitely hire a fee only planner.
@@James_48 this I can agree with and it's more realistic. I can see 1.1%-1.5% as being a realistic range for both investment and financial planning depending upon overall portfolio size. In the end I just want to see compounded rate north of 6%+ net of fees to me and I am happy.
One other thing from the past though is usually the higher MER in mutual funds and trailing commission was how the planner payment was covered.
Why does CPP need to know what my work pension income is if it doesn't affect it?
What makes you think CPP needs to know your work pension income?
@@James_48
They ask for it
@James_48
'Financial information about your employer pension'
@@James_48
In the government questionare for estimate it asks a variety of questions about my work pension
Lot of respect for Fred and I own his books.
But, at 6:07 he stated that 90% of retirees OWN their principal residence.
Census data on Service Canada, as well as plain old common sense sense refutes that number.
Otherwise, more great stuff.
Sounded more like something old “Teen and Norm “ might say…..
If you delay CPP, and die suddenly , before starting to take CPP, can it be started by the spouse?
hahahaha Spouse will get maybe 36% of it, possibly zero if they are at the max CPP. Death benefit is $2,500 taxable
No, unfortunately the spouse would not qualify for survivor's benefit because the primary recipient did not begin collecting their CPP.
@@wrongwayconwayI am quite certain this is incorrect. If a spouse defers CPP and passes before collecting the surviving spouse’s pension will incorporate the survivor’s benefit for deceased spouse’s pension. This is of course subject to the general rules of the surviving spouse’s pension not exceeding the maximum for an individual.
Here's a question - can the surviving spouse or executor of estate submit a request to start CPP for the deceased person 12 months prior to their death as you can back date your start by 1 year?
No. Only the recipient can initiate
Numbers don't make sense. Assume one is going to take CPP at 70. If you start drawing at 60 and stick the monthly CPP into TFSA S&P Index of 10% return. You will be ahead no matter what due to the magic of compounding.
If you die at 65, you are ahead. In fact, you would be ahead no matter when you die.
The key though is assuming S&P return remains stable and you have to be willing to take the risk on your own.
Can someone please check my maths?
I know that I will be taking my CPP as soon as I retire.
I'll be 63 in November and plan to retire. While I'm still working full-time I decided to start my CPP last September while I'm working rather than delay it until 70, let alone 65. The reason? My family tends to die before 77. My mother died at 71, my grandmother died at 77, grandfather at 61. I have loads of contribution room in my TFSA and that's where my CPP is going. Thankfully I have a defined pension, RRSP, GICs, and stocks. I own my home and I've almost completed my travel bucket list (a trip to Italy is still on my to do list) so no big travel expenses expected, my car is paid for, the only debt I have is the mortgage on my home. I've planned out a modest lifestyle for my retirement and know I'm going to be happy leaving the stress of the ICU behind.
I think 65 is the sweet spot.
I read the book and the critical point was delay CPP to mitigate (the government could theoretically default on his public debt too, so it is not 100% risk elimination) investment, longevity and inflation risks. If you can digest and fully comprehend this powerful message then no need to read the book, the rest of the content is supbar.
Agreed I bought the book & didn’t find it that enlightening.
CPP is not part of government, so if one of the most financially sound countries (Canada)goes bankrupt, there is a lot more to worry about/
It is a crown corporation, if it goes down, I would have to worry about lot more + not having a pension
It's almost as if this guy is employed by CPP ensuring that the pension lasts longer my understanding is that if one takes CPP at 65 you break even only at age 83, so people are supposed to give up 5 years of income that they earned in the hopes that they live to at least 83!? I understand that they would get more income/month, but If I'm correct that would be highly ironic...as you would have to be 85-90 to break even by waiting until 70!
I’m taking it at 60. Wish I could take it sooner. Never rely on government to take care of you. Just my advise.
Adam, .. .you are not loud enough, ... Fred is
Is this book relevant for single people?
Sure is
Many of the examples and projections given are for couples, though a lot of the learnings still apply. That said, there is an entire chapter (23) on "Retiring Single" and how that relates to everything he talked about leading up until that point... differences, other challenges, etc.
I started taking my CPP at 65.5, and wish I had left it until now at age 70. I did receive bad advice.
My dad took his at 70.. he said get debt free and wait.
We have messed up a lot a life, but that advice I am sticking to..
i took mine at 60...no regrets....already enjoying it... who knows at 70 i died or disabled...
It depends on your income, but sooner you will get, at least, something from gevernment, better for your mental health...
It depends how long you live.
100% @@junyu9395
Do not listen start pension at 60, how do you know you will live to 70 and how much after 70 if you manger to make 70. You will make more starting at 60 in the long run and live to enjoy some of your hard earned pension money.
I disagree because if you die shortly after your 70 years of age you don’t win and the federal government does and as I get older I notice many people that I knew and grew up with have died by if not before the age of 65 so I’m over 66 and must retire soon because I work in a heavier job and not sure how much more my body can handle before I get injured or worst I may pass away and the government will really profit after all my working years I’ve paid into CPP and all my other taxes that kept me in the working poor !
Take your CPP at 60.
Take it at 60 even if you don’t need the money. use it to top up your TFSA and by the time you are 70 assuming you are collecting 800 per month with a return of 6% you will have well over 100k waiting for you. If you wait until 70 you will have 0. Remember, the govt wants you to collect as late as possible hoping you croak and they pay out 0.
Take CPP and OAS as soon as you can get it unless you are rich. You don’t know what the future holds regarding your health. The end.
that is why you might want defer it.
@@rb239rtr That’s what I said.
Is this sponsored by government?
Terrible advice to take reverse mortgage
Sorry, but I disagree with the Expert. Waiting 'til 70, maybe if you don't need the $, or if you know you will live well into your 90s Reverse Mortgage, why give the bank more $$$ ?? Sell the house and downsize!