If you’re on the cusp of retirement, you might be facing a cash conundrum: what to do when your RRSP or defined contribution pension plan matures? You’ll suddenly have a large lump sum of cash to deal with. Some choose to convert to a RRIF (for RRSPs) or a Life Income Fund or Locked-In Retirement Income Fund for the pension plan. An often forgotten third option – an annuity – can in fact provide a guaranteed income stream for life equivalent to the kind once provided by a defined benefit pension payout. Yet an “annuity” has become something to avoid for many retirees. And that could be a big mistake. Here’s why.
Clients often ask me what methods I use to research and analyze funds. This is a numbers business, so first and foremost I look at quantitative factors, as I described in a recent article. But while the numbers are great at telling me what a fund has done in the past, they aren’t always great at predicting whether it can deliver above-average returns with below-average risk into the future. That’s where I turn to qualitative factors, which can be quite illuminating, but which need a bit of intuition and interpretation.
* Market wrap: Stocks edge up on the week.
* Mackenzie launches new global bond fund and four new USD funds.
* Market wrap: Stocks edge up on the week. The main stock indexes ended the week with modest gains, despite a selloff on Friday after U.S. Federal Reserve Board Chair Janet Yellen indicated in a speech that the central bank is still likely to raise its benchmark interest rate later this year. Toronto’s S&P/TSX Composite Index advanced 0.6% on the week, while the S&P 500 Composite Index edged up 0.2%.
Q – My husband and I are a classic “sandwich generation” couple. We have two kids in university, a mortgage on the house, and we’re also taking on increasing responsibility for our aging parents. We both have good jobs, and we are doing okay with our investments, but our concern is that we may not have enough money left over for us to retire on after we’ve taken care of everyone else. Do you have any suggestions? – Maureen S., London, Ontario