My thoughts on a recent article in the Globe and Mail “Three strategies to pump up funds at retirement”
This is a very good article which covers the basic questions of 99% of retirees. Do they buy bond/dividend funds or plump for an annuity where the income is guaranteed to be in the bank each month?
As a broker that sells both types of investments,I see most clients electing an annuity.As 2008/2009 still echoes in their reduced accounts,they want to know that their cheque will be in the bank on the 1st of each month.
Another point raised is that of interest rates,about which commentators do not think through before speaking or writing. Longevity,not interest rates,is the big gorilla in this calculation.
Companies are looking at paying out the income for multiple more years then previously thought and that has a far greater impact on payment amounts.
That said,any retirement income from any source,should be enjoyed as soon as possible.You have no guarantee of life and if you read this article, “We’re living longer, not better’: Average Canadian will spend more than a decade suffering from serious illness” you will see it is important to think about your health and the health of your partner.