The following post is courtesy of Brian Kieran at www.betterthan50.com
More than 75 per cent of Hatch & Muir clients are 55 and older. Senior partner Robin Muir, a 30-year financial management veteran, says there’s a reason for that. “These folks know we’re going to be there for them with continuity and a personalized approach to managing their retirement security,” he tells Betterthan50.com.
Seniors cross an investment threshold when they turn 71. At that age funds in their RRSPs (Registered Retirement Savings Plan) must be converted to RRIFs (Registered Retirement Investment Funds), cash or annuities.
Robin says the decisions seniors make at this personal wealth crossroads can fundamentally impact how long their retirement nest eggs endure.
“This is a big problem right now. Mr. and Mrs. Smith come in and they say they don’t want to take any financial risk whatsoever. But risk is a relative thing.
“I can put them in a five year GIC (Guaranteed Investment Certificate) with no risk of capital fluctuation. But the best return I can get them is currently 2.4 per cent. The problem is the government requires them to withdraw a minimum income of 5.28 per cent of the capital in their RRIF at age 72. Even with the new lower limits in the 2015 federal budget now approved, the percentage increases every year and the risk of eroding your capital too quickly still exists. Read more»