Financial planning methodologies have evolved over the past 30 years with the advent of increasing computational power. Originally, planning was a simple spread-sheet based projection of your current situation, plus some assumptions, such as savings rates, tax rates, investment returns and inflation rates. This would give you an idea of what your final destination would look like with much of the calculations being driven by Future Value and Present Value tables.
John was concerned because his 82-year old mother, Betty, was having trouble generating sufficient income to cover her cost of living with interest rates at rock bottom levels. Along with many other investors globally who have poured some $4 Trillion dollars into government bonds since the 2008 Credit Crises, she wanted to feel safe and have her money guaranteed. But the price of safety in a low interest rate world is higher than you may realize.
As with many retirement savers, it took two stock market crashes (2001, 2008) and a global financial crisis to convince Adam and Sonya that trying to 'time the market' or pick specific sectors was a costly exercise in futility. But, with the value of their RRSPs nearly halved in the 2008 crash, they also recognized that they could not afford to avoid equities if they were going to have any chance of meeting their retirement goals.
In the aftermath of the US housing market bust and the ensuing financial meltdown that led to global stock market declines of 2008, people are getting back to the basics as far as their retirement planning goes. Although the stock market has recovered, many pre-retirees have lost a lot of ground in their retirement accounts and are facing a new reality. Retirement may not be what they had originally envisioned; but with some retirement income 101 basics, most people should be able to get back on track.
Mutual Funds and Segregated Funds provided by the Fund Companies are offered through Worldsource Financial Management Inc., Other Products and Services are offered through Dave Gorman Financial Strategies.