Nevada Retirement Planners

A paradox: the team that could find a way to pay G.M. retirees and save the government money is being scrutinized by the government.

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Some say the Governmental Accounting Standards Board should make public pension numbers more straightforward; others say its existing rules are sound.

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LONDON (Reuters) – State-controlled Royal Bank of Scotland plans to cut pension benefits for tens of thousands of UK employees as it reins in costs, angering unions which accused the lender of dealing a “body blow” to staff.

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(Photo: Author Jim Otar in his Thornhill, Ont. home. Brett Gundlock/National Post) 

 
Saturday's article and video on financial planner Jim Otar's new book, Unveiling the Retirement Myth,
has stimulated thousands of download requests for the free "green"
non-printable advance copy, available here.

Jim tells me some "FP readers put them on
their blogs, and people from all over the world started downloading for
free. My allowable data transfer capacity was filling up fast, before
my website crashed." So he's stopped the free downloads and is now
charging $3.99 for each.

Yesterday, even two days after the piece was printed in Saturday's paper, the article was the most popular online piece at www.financialpost.com. Jim's thesis is that those
approaching retirement need to be like engineers and plan for the
worst, rather than count on rosy projections of investment returns that may never materialize. He feels most baby boomers and even some Defined Benefit pension plans are in
the "red zone" and not prepared for retirement.

The column can be found here and the first video here: Click on Myths of Retirement. The second video goes up later this week.

As the column pointed out, Otar's mathematical approach has a lot of appeal for financial planners, particularly those in the United States who frequently book Otar to speak at client events. But perhaps his most enthusiastic fan among advisors is Graham Cook — no stranger to this blog — president of Nanaimo, BC-based Composite Finance Inc.

 Cook believes Otar is absolutely on the money and provided links to both the video and column from his  advisory site at Your Wealth Advisor Canada. 

"Jim has earned my respect and he certainly deserves huge accolades for his efforts," Cook says, "Clients and advisors alike need safe and suitable strategies for the distribution phase of life. Thankfully, Jim is leading the way for all of us."

Hot fodder for financial discussion forums 

At least two financial discussion forums are focusing on the book. The thread at the popular Bogleheads forum features a comment by Jim explaining why he had to start charging for the download. You can find it here. As I posted, it had already attracted 40 comments or so.

There is also a discussion of the book at the Retirement forum within the new Canadian Money Forum.  

The three zones. Most baby boomers are in Red Zone

Graham Cook bases his  Practice Standards on investment strategy using Otar's "Zone Approach" that Saturday's column focused on.  Cook elaborates: "The 'Zone Approach,' derived on Jim's Calculator documents the assumptions, provides an illustration of the rationale as well as the math behind the specific recommendation. It is the only safe and reliable methodology to use during the distribution phase and I strongly recommend his approach to all advisors and clients alike. Chalk up a big-one for the Myth Busters," Cook says,  "Jim is an unassuming gold-mine of relevant information and he backs up his assertions with hard and undeniable research (and great diagrams too). Most boomers need to listen to this advice very very carefully, it may be their only hope for a satisfactory retirement."

The piece also drew a long comment from another source who occasionally posts to this blog. Because it reveals a lot of personal financial information, I agreed not to divulge this person's identity:

"Interesting article about Jim Otar," It begins, "I am a bit familiar with his work… For myself yes I am on track for good to go. My wife's RRSP that I manage has $58,507 contributed started 1991 (maxed out including some special severance payments and pay-equity that was allowed in) Value now $256,689, gain $198,000. Her age 49. Usual allocation to stocks is near 100%, but closer to 50% today.
 
My RRSP $67,257 contributed since 1989 (always maxed out including 14k from a severance but typically not much allowed in due to pension), value today $260,405, gain $193,000. My age 49. Usual allocation to stocks is near 100%, but closer to 50% today.
 
Both of us will have pensions from our government jobs as well. About 25 years each at age 55.
 
Non-registered savings only about 25k but that will be increasing rapidly now.
 
RESP for two kids 13 and 14 is at 64k also typically 100% equities (the kids have not been the smartest investors in our house and did lose a lot last year, maybe they should change advisors, haha) 50% cash at the moment.
 
Type of stocks, profitable companies, no bio tech, no pennies, little to no energy or resources over the years, lots of financials. Not buy and hold but far from a day trader approach.
 
We are fortunate to have the pensions but my point is that we have done very well with a near-100% equities approach.  My wife's RRSP is worth more than double her commuted value in her pension plan and she has 20 years in the plan! Right now though I am moving to cash about 50% to re-group, and wait for correction or no-brainer stock picks."

Reader suggests rise of DIY investing will cost poor advisors their jobs

Another reader, Jim Quigley, wrote this:

Good article about the end of retirement for baby boomers.  Remedial strategies?
 
1. If you have a financial advisor, fire them.
 
2. If you can't do that, listen to them and do the opposite of their advice.
 
3. Don't trust anyone with your money.
 
Positive future developments?  The financial services industry will eventually shrink and most of these bozo's will go back to their old jobs at Walmart or MacDonalds

Another reader said this:

 For the most part your article was right on. However when you said public pensions are in jeopardy that is where you lost me. Governments both local provincial and national have a power that  ordinary businesses don't have and that is the ability to take money for taxes with no real recourse for us to stop it.

Try not paying your property tax and see what happens. I don't have to buy a coke but I will be paying my property taxes no matter what service I get in return. For all the people with money well that sounds good; however, don't count on it because some non boomer in the future may say our generation is not going to be saddled with paying interest on debt from 1974 to finance you and will inflate all the debts and the value of money to zero. You just know someday the temptation to do that will be irresistible.

 
–62–
 

Source The Wealthy Boomer : Retirement

Most American workers relying on 401(k)’s fail to amass anywhere near what they will need for a secure retirement, and a thorough revamping of the system is needed.

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New Caution.

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Retirees often fall victim to the same over-reliance on debt that plagues people during their working years.

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RICHMOND, Va. (AP) — Armored car company Brink’s Co. said Thursday it contributed $150 million to its underfunded U.S. pension plan.

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(Reuters) – A coalition of U.S. state pension funds is supporting the private equity industry’s opposition to new rules on takeovers of troubled lenders, the Financial Times reported on its website.

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LONDON (Reuters) – The fallout of the financial crisis is forcing an increasing number of UK companies to close their expensive defined benefit pension schemes in favour of cheaper pension arrangements, new research has found.

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