Wednesday, October 07, 2009

Product Newsletter 1 October 2009

like a crocodile attack, retirement comes as a surprise for most of us


The Economist, one of global capital’s most prominent and influential magazines, recently ran with an editorial entitled
‘The End of Retirement.’ (print edition June 25, 2009).

Referring back to Bismarck, the German Chancellor credited with introducing the first pension system in 1889, the editorial said that “Whether we like it or not we are going back to the pre-Bismarckian world where work had no formal stopping point.”

Consequently, if we anticipate that more of us will be working longer – say to age 70 – you still have time to invest, even if you’re only starting now.

Contact me – Bernard Kelly – anytime if you would like me to help you explore your options. My email is


The number of Australian’s who say they will delay their retirement until at least the age of 70 has almost doubled since 2006 as a result of the global financial crisis (GFC), according to
Mercer research.

Nearly half of the 519 working Australians aged 40-65 surveyed said they would delay their retirement as a result of reduced retirement savings, with this figure increasing to 60 per cent for those aged over 60.

Meanwhile, almost 20 per cent said the GFC could see them continue to work for an extra six years, while 33 per cent may work up to an additional four years.

10 August 2009 by Corrina Jack, writing in "Money Management”


The “Jamaica Gleaner” 16 August reported that “a recent Ernst & Young retirement-planning survey” done on adults over age 55 revealed:

47% did not calculate the effect of inflation.
81% did not consider the possibility of their parents getting ill.
54% did not plan for personal illness.
53% did not plan for the illness of a spouse.
66% did not consider fluctuations on
debt-repayment needs, such as loans, mortgage, etc.

The conclusion would be that most people approach retirement unrealistically.


Former engineer and financial planner Jim Otar says most Baby Boomers have not saved enough to retire comfortably and should plan to remain in the workforce quite a bit longer.

His forthcoming book, Unveiling the Retirement Myth, adopts a rigorous mathematical approach to retirement planning.

Otar takes the investment industry to task for selling fanciful hopes and dreams that may not pan out in reality. The book repeatedly demonstrates that while, on average, a given amount of capital may last a lifetime, unforeseen calamities can reduce even million-dollar nest eggs to zero within 15 years or so.

Throughout, the Turkey-born Otar -- he migrated to Canada at age 20 -- draws on his early training as an engineer.

One graphic shows a tower designed for an average wind speed of six miles per hour crumbling under a 100 mph wind speed.

"In engineering, you would never design anything for the ‘average,'" he writes. "You would design it for the ‘worst' and then some. Similarly, it is wise to design your retirement plan not for ‘average,' but for adverse conditions."

The average Baby Boomer hasn’t saved enough, Otar warns.

Their best hope is to remain in the workforce as long as possible, which may be fine for those who enjoy their jobs. Those who don't would be well advised to find a new career they can enjoy into old age, Otar says.

Unfortunately, many cherished concepts used by financial planners to market accumulation vehicles don't work for retirees trying to draw income. Among the many concepts he views as "myths" are: asset allocation, frequent rebalancing, asset dedication, diversification and the notion of stocks for the long run.

The 500-page book (self-published by Thornhill, Ont.-based Otar & Associates) won't be available until late 2009, but you can view a free but unprintable "green" version at

Source Jonathan Chevreau writing in “Financial Post” 24 August 2009


It’s nice to know that we are living longer, but as a consequence we are outliving our money.

It’s a gamble.

Will we outlive our funds and end up poor and the miserable on whatever pension the government can afford to pay, or will our funds outlive us and allow us to live a comfortable retirement?

We are targeted by massive financial institutions which are constantly trying to earn more fees from us, but the biggest 'retirement killer' is our simple inability to maximize our retirement savings.

Retirement planning isn't a full-time job, but a full-time job is what you may face if you don’t plan your retirement.

No one will help you when you are sleeping on a bench in the park.

But if you’re still in the workforce, I may be able to help – or at least help you explore your options.

Feel free to contact me – Bernard Kelly – anytime. My mobile is 0414 778 518 and my email is


In early September,
President Obama announced a range of payroll adjustments aimed at helping US citizens save for their retirement.

The measures will allow people to have their federal tax refunds returned as saving bonds, force employees to opt out of employer savings plans (rather than elect to opt in) and allow employees to pay unpaid vacation entitlements into their retirement nestegg.

With nearly half of the
U.S. work force having little or no cash saved beyond their Social Security benefits, Obama hopes the new measures will put more Americans on the path to greater financial security.

source: New York Daily News 5 September 2009