By Karl Anvik, BSc, MA, CIM®, CFP® The word “retirement” can conjure up many emotions: excitement, joy, and even anxiety or nervousness. Reaching retirement is an amazing milestone, but making sure you’re ready for it can be overwhelming, especially if you look at all the unknowns. Thankfully, there are ways to plan for many of the risks and headaches that retirement brings. Let’s look at some retirement planning challenges so you can feel empowered to prevent or work through them. How Is Your Asset Allocation? At retirement, the last thing you want to experience is losing a large portion of your investments due to a misallocated portfolio. It’s important to make sure your assets are handled carefully to guarantee you have money for the long haul. That’s why it’s crucial for your money to be allocated based on your age, time horizon, and personal risk tolerance. Someone who is 20 years away from retirement may be okay with more volatility than someone who is retiring in 5 years and isn’t willing to lose more than 8% of their savings. When you get to retirement, having a portfolio that can generate consistent income is key. In a low-interest-rate environment, generating income is all the more challenging. At Northfront Financial, we specialize in using alternative assets that are used by some of the largest pension plans in the world, such as the Canada Pension Plan (CPP). This allows us to help our clients solve the “income puzzle.” Before you retire, it is important to have a financial professional walk you through the process of determining exactly what level of risk you want to take and can afford to take, how much liquidity you need, and help you design an income-generating portfolio customized to your needs. The Reality Of Inflation Inflation is a reality; not planning for inflation is the risk. CPP factors in inflation through the Consumer Price Index (CPI), but how can you protect your other assets? There are many ways to reduce the risk of inflation, such as diversifying your assets appropriately to strike a balance between principal protection and growth or making a conservative withdrawal plan that accounts for inflation surges in the future. The best way to prepare for the impact of inflation on your retirement savings is to plan for multiple scenarios, seeing how your nest egg will hold up under different circumstances. Outliving Your Savings Perhaps one of the most overlooked items in a retirement plan is your income plan, or lack thereof. We work so hard to get to retirement that we forget to make a plan for how to handle our money after reaching that milestone. Think of it this way: When you climb a mountain, you spend the bulk of your time preparing and strategizing for how you will get to the top (in this case, retirement). But once you’re up there, you realize you didn’t plan for the descent (withdrawing your money in retirement) and are not sure if you will make it to the bottom safely. Having your money last as long as you do requires extensive planning to create a concrete income strategy that is designed to act as a personal pension. This is based on your needs, wants, savings goals, and unique lifestyle factors, which means a cookie-cutter strategy or withdrawal rate won’t give you the security you desire. A financial professional familiar with your situation can help you retire—and stay that way! Don’t Let These Risks Get You Down Retirement is an incredible time of life, one that you’ve worked hard for and deserve. That’s why it’s so important to do more than just save and invest; you need to look at the big picture and prepare for the many variables that could come up. If that sounds overwhelming, don’t fear! That’s what we do best at Northfront Financial. If you are looking for effective strategies for the financial challenges you face in your everyday life, we’d love to talk with you and help you take care of the intricacies of retirement planning. Contact us for an introductory appointment by calling 403-571-8960 or emailing email@example.com. About Northfront Financial Northfront Financial is a boutique full-service financial planning firm serving individuals and families in Calgary, Alberta. We pride ourselves on being a different kind of investment firm. This stems from our humble roots, entrepreneurial spirit, and a culture of integrity and professionalism. Our goal is to offer the best investment products, services, advice, and ideas the financial industry has to offer from our experienced team, which includes individuals with the Chartered Financial Analyst (CFA), Chartered Investment Manager (CIM), and Certified Financial Planner (CFP) designations. To learn more about Northfront Financial and how we can help you, visit their website and schedule a complimentary appointment.
By Shamez Kassam, CFA, MBA We have been living in this new normal for months now, and although many of us have adapted to the major changes that turned our lives upside-down, a cloud of uneasiness still looms large. Even the term “uncertain times” doesn’t do justice to the scary or frustrating circumstances in which we find ourselves. As expected, the stock market and economy, neither of which like uncertainty, have reacted to things with unprecedented volatility. If you are worried about your financial security, it’s normal to find yourself asking questions such as, “How will I get through this?” and “What does this mean for my future?” While the severity of these events is not to be minimized, we can battle fear and anxiety by going beyond the headlines and educating ourselves with the facts. With that in mind, here are 4 ways you can help prepare your finances for more volatility so you can feel equipped and empowered to take the next step forward. 1. First, Take A Deep Breath When headlines are dramatic, it’s hard not to respond in kind. But remember, news outlets want to catch your attention, which means they are prone to exaggerate information. Instead, keep a clear head by looking at the stats and put current conditions into perspective. This is not the first time the market has been volatile and it won’t be the last. In fact, declines in the Dow Jones Industrial Average are fairly regular events. In fact, drops of 10% or more happen about once a year on average. Sometimes the market fluctuates in reaction to a global or political event, and sometimes it’s just how the market works. The only long-term guarantee in investing is that there will be short-term fluctuations. 2. Keep A Long-Term Perspective Now that we know to avoid the headlines and dig for the facts instead of making desperate moves to potentially save our money, here’s an analogy that helps us understand how the stock market and our investments behave. People’s moods can fluctuate on a day-to-day basis and so can the stock market. However, if you look at someone’s personality over a long period of time, their moods average out and usually improve with maturity. This probably doesn’t apply to everyone you know, but stay with me! In the same way, the stock market grows over time. The value of your investments also grows and matures with time, even with short-term ups and downs. Here is a graph that shows this long-term stability, despite short-term market fluctuations. This is the Dow Jones Industrial Average (DJIA) showing over the last 30 years of investment value, which is a fair representation of the market as a whole. If you remember the 2008/2009 crash, as seen above, the market recovered really well. Our current situation may seem significantly different from anything in the past, but capitalism and human perseverance will once again prevail and lead to improvement in the markets. 3. Leave Your Money Alone Based on what we’ve covered so far, what is going to happen when we ride out the stock market roller coaster and keep investing consistently? We will most likely experience growth, work toward financial confidence, and save ourselves a lot of stress when future downturns come. When the stock markets go down, you can think of it like a Black Friday or Cyber Monday Sale, where stocks and mutual funds are on sale and you’re getting the best deal on your money. However, if you choose to sell in a down market, you will get a fraction of your money back. You’ll lose money. If you consistently invest and don’t take any money out until retirement, you don’t need to worry. Don’t become frantic and start selling back everything you bought for a much higher price. Let it grow and mature. 4. Talk To A Professional About Risk Research will help you keep a clear head and keep you from panic-induced decisions, but when it comes down to it, it’s extremely beneficial to talk with someone who works with this information daily and can help answer concerns specific to your situation and phase of life. Depending on your age and financial situation, you might not feel like you have as much time to let the market bounce back. This is why it is even more crucial to make sure the types of investments you have make sense considering your risk level. For example, consider using alternative investments in your portfolio – these are less volatile investments that have been used by the largest pension funds in the world for decades. Most individual investors are not aware of this asset class. This is something to discuss with a financial professional to make sure your investments are where they should be and are ready for future market swings. We’re Here To Help! Despite social distancing and sheltering in place, remember that you are not alone. We hope you take comfort in knowing that our team at Northfront Financial is here for you. We know the volatile markets, among other things, are likely causing you concern regarding your retirement plan. Let us share your burden. To learn more about alternative investments, schedule an introductory consultation by calling 403-571-8960 or emailing so we can show you your options for protecting your money and setting it up to succeed in any market environment. About Northfront Financial Northfront Financial is a boutique full-service financial planning firm serving individuals and families in Calgary, Alberta. We pride ourselves on being a different kind of investment firm. This stems from our humble roots, entrepreneurial spirit, and a culture of integrity and professionalism. Our goal is to offer the best investment products, services, advice, and ideas the financial industry has to offer from our experienced team, which includes individuals with the Chartered Financial Analyst (CFA), Chartered Investment Manager (CIM), and Certified Financial Planner (CFP) designations. To learn more about Northfront Financial and how we can help you, visit their website and schedule a complimentary appointment. ___________ (1)
How To Invest For Retirement Like The Top Pensions
By Jeffrey Ady Who are the most successful investors that you know of? Names like Warren Buffet and Prem Watsa may come to mind. It’s common to think of individuals when your mind turns to successful investors, but what about those whose success affects thousands or millions of people? The truth is that many of the most successful investors are not individuals, but pensions. Canada’s top 10 pensions manage more than $400 billion and are a major cornerstone of Canada’s financial system and economy. Thanks to these pensions, Canada has one of the strongest retirement systems in the world. Now, institutional investors and pension funds from all over the globe look to them for best practices. (1) Canada has some great pensions, but how does that affect you as an individual investor? Though you will never compare to their size of power, you can still learn from them. You can imitate their techniques and perhaps get a taste of the investment success that they experience. The Pension Difference: Alternative Investments What do pensions do that individual investors don’t? Pensions invest with the goal of reducing portfolio risk by capturing the long-term diversification benefits among stocks, bonds, and alternative assets. The big difference between the way that individuals and pensions invest is the use of alternative investments. Investing in alternative assets like private equities and infrastructure investments can complement and diversify the typical individual’s stock and bond portfolio. This increased diversification helps provide more stability and dependability to pensions who have so many people depending on them. The Challenge Of Pension-Style Investing Clearly, Canadian pensions are doing a good job with their investments. If pensions experience so much success by investing in alternative assets, why doesn’t everyone do it? The answer is simple: many investors would like to but cannot. The challenge is that accessing the kind of alternative investments that pension funds do is difficult for private investors. They often require a minimum investment in the millions of dollars. Most investors do not have enough assets to put that much into a single investment, and most investment advisors that work with individuals don’t even offer them. The Northfront Advantage At Northfront Financial, we specialize in portfolio management that brings alternative investment options to individual investors. Our investment process looks for opportunities to invest like pension funds do in alternative assets such as timber and farmland, private equity, infrastructure, real estate and venture capital that provide a diversified stream of cash flow and growth opportunities, while being less correlated to the broad stock and bond markets. The Northfront Investment Committee relies on staff and outside service providers’ expertise (including investment managers) in executing its investment management strategies. Our goal is to reduce portfolio risk by capturing the long-term diversification benefits among investments to stocks, bonds, and alternative assets, just like the pensions do. To learn more about how we at Northfront Financial can help you invest like a pension, call 403-571-8960 or email firstname.lastname@example.org. About Northfront Financial Northfront Financial is a boutique full-service financial planning firm serving individuals and families in Calgary, Alberta. We pride ourselves on being a different kind of investment firm. This stems from our humble roots, entrepreneurial spirit, and a culture of integrity and professionalism. Our goal is to offer the best investment products, services, advice, and ideas the financial industry has to offer from our experienced team, which includes individuals with the Chartered Financial Analyst (CFA), Chartered Investment Manager (CIM), and Certified Financial Planner (CFP) designations. To learn more about Northfront Financial and how we can help you, visit their website and schedule a complimentary appointment. ______________ (1)
By Shamez Kassam, CFA, MBA Although our daily routines have changed drastically recently, many of us are still working hard and staying busy—just from home. As we’re all just trying to survive this incredibly challenging season, it’s hard to make plans for what comes next, much less for when our working days are finally over. But planning for your retirement should still be a priority, and we’re not just talking about the financial aspects of your golden years. It’s also important to prepare for the emotional and psychological changes that come along with retirement. Retirement isn’t just about having enough money in the bank to quit work. Yes, you need a stream of income you won’t outlive, but it’s also a time to take adventures, grow, and begin a new chapter in life (a chapter that could last 20-30 years). So, let’s look at 3 things we need in retirement to be happy. 1. A Structured Schedule Most of your life you’ve lived by some type of schedule, but retirement is arguably the only time in your life when you have no structure at all. The calendar is completely blank, and you’re free to plan out your days how you wish. This newfound freedom is fun at first, but a lack of structure can lead to restlessness. The days turn into weeks, weeks turn into months, and before you know it, you don’t know where the time has gone. To help with this aimlessness, keep some type of schedule when you retire. You don’t have to plan out every second of every day, but implement some routines to keep yourself from getting bored. Even better if those routines help you achieve your goals as well, like signing up for workout classes so you can stay healthy, or scheduling a weekly lunch date to stay in touch with friends. Create a schedule that gives you something to look forward to. 2. A Sense Of Purpose For most of us, we find our purpose in our careers. Our work is ingrained in our identity and it’s hard to find new passions once we retire. So, what will your purpose be in retirement? How will you stay engaged and content? According to a recent retirement survey, 76% of retirees who engage in 10 or more activities are very satisfied in retirement, compared to only 52% for those engaged in 1-4 activities. (1) Some activities that give retirees a new sense of purpose include: Spending time with family Socializing with friends on a regular basis Gardening and improving the home Traveling Volunteering Joining a club or organization And don’t think it’s too late to find your life’s passion. A recent study found that people with a sense of purpose have a 15 percent lower risk of death compared to those who are aimless. (2) The study also found that it doesn’t matter when you find your direction. Even if you’re in your 70s, it still leads to a longer life. 3. A Strong Community Last but not least, surround yourself with people you love. Many retirees admit that they miss their interactions with colleagues after they retire. (3) If you stop and think about it, this makes sense. We spend the bulk of our time at work and friendships naturally form in the workplace. Once retired, it can be difficult to replace this type of day-to-day connection with others. The good news is, engaging in the activities listed in point #2 (spending time with family, volunteering, joining a club, and so on) is a great way to stay connected and add meaning to your life. Let Us Help You If you’re feeling uncertain as you prepare for retirement, you don’t have to walk this journey alone. Let us at Northfront Financial be your guide, and we’ll start taking steps today to make sure you’re financially, emotionally, and psychologically prepared. Schedule a complimentary consultation to see if we are the right fit to help you secure your financial future and plan for a happy, worry-free retirement. Contact us by calling 403-571-8960 or emailing email@example.com. About Northfront Financial Northfront Financial is a boutique full-service financial planning firm serving individuals and families in Calgary, Alberta. As one of Calgary’s leading wealth management teams with highly skilled, certified team members, they help create financial capacity for their clients by deeply understanding their needs, opportunities, and strengths through their unique Northfront Process™. To learn more about Northfront Financial and how they can help you, visit their website and schedule a complimentary appointment. ___________ (1) (2) (3)
By Karl Anvik, BSc, MA, CIM®, CFP® How are you feeling about 2020 so far? Not what you expected, eh? The world as we know it has been turned upside down by five letters and a number: COVID-19. While the coronavirus pandemic is at its core a health issue, the downstream effects of it on other aspects of our society have been significant, perhaps the greatest being economic. As we reach the mid-year mark of 2020, let’s look at what’s ailing the economy, most of which can trace its roots back to COVID-19. Stock Market Developments The year started off strong, with the S&P 500 reaching all-time highs and peaking on February 19. Then it all fell apart. In a little over a month, the index fell 34%, bottoming out on March 23. It’s been a bumpy ride, but the market has climbed out of the hole it was in and gained back 36% (as of May 27) from that low. (1) Now, it may seem as if the S&P 500 has made up for all of its losses if it lost 34% and then gained back 36%. However, that is not the case because each percentage is based on its relative high or low. The index peaked at 3,386.15 points before falling 34% to 2,237.40. That loss was 1,148.75 points. Growth of 36% from the low point only accounts for 798.73 points, which means that the index overall is still down 10% from February’s high. In addition to stock prices improving, volatility is calming down as well. In mid-March, things were swinging around so fiercely that the S&P 500 achieved double-digit movement in single days. Things have calmed down a lot since then, but volatility is still higher than it was pre-crisis. Things just seem calm now compared to the craziness of what has been called the longest March ever. (2) Daunting Unemployment Numbers Perhaps the area that has been impacted the most by the COVID-19 containment efforts is employment. It’s hard to keep a job when companies are shutting down and people aren’t allowed out of their homes. The official unemployment rate for April is 13%, more than double what it was in February. (3) The true number might be even higher, as this number does not capture the true picture because it doesn’t include those not looking for work or the 2.5 million people who worked less than half of their usual hours due to the coronavirus. (4) Federal Reserve & Government Intervention The U.S. Federal Reserve stepped up early on in the pandemic to slash rates to near zero. And of course, we’ve all heard of the $2 trillion CARES Act Congress passed to help individuals and businesses and keep the economy chugging along. In Canada, the government passed a bill to provide $52 billion in aid to individuals and businesses and $55 in tax deferrals, including a freeze on student loan repayments, loans for commercial landlords, business loans, and an increase to the Canada Child Benefit. (5)(6) The Economy’s Struggles As we begin to ease out of lockdown and restrictions are being loosened, there has been an uptick in economic activity, though not enough to stop the economy from contracting. The leisure and hospitality industries have been devastated (7) while the service sector is still struggling under social distancing guidelines. (8) Factory activity is still down (9) and agricultural conditions are deteriorating. (10) Overall, pessimism reigns supreme over the economy even while some Federal Reserve policymakers believe we are either at or near the bottom and are expecting a rebound in the second half of the year. (11) The global economy is continuing to decline, but at a slower pace than it did in April, (12) which seems to confirm their predictions. How Should You Respond? As you can see, this year has been anything but normal so far, and there are more than likely going to be even more plot twists as we enter the summer and fall. While the global economy seems to be gasping for breath, it is not the end of the world. We may have some hard months and years ahead of us, but it isn’t the first time we’ve faced challenges like this. While our economic woes may not be historically new, they very well could be new for you. In difficult times like these, it is helpful to have a trusted advisor that you can turn to for financial guidance and support. If you don’t want to go through this economic crisis alone, our team at Northfront Financial Inc. is here for you. Give us a call at 403-571-8960 or email so we can have a no-obligation conversation about where you are and how we may be able to help. About Northfront Financial Northfront Financial is a boutique full-service financial planning firm serving individuals and families in Calgary, Alberta. The firm specializes in pension-style investing so that the quality of your retirement is not dependent on the stock market. As one of Calgary’s leading wealth management teams with highly skilled, certified team members, they help create financial capacity for their clients by deeply understanding their needs, opportunities, and strengths through their unique Northfront Process™. To learn more about Northfront Financial and how they can help you, visit their website and schedule a complimentary appointment. __________ (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)
Do Your Friends And Family Need Financial Guidance? We’re Here To Help
By Jeffrey Ady We are living in unprecedented times, with hourly briefings and updates that cause many of us to panic or at least lose sleep at night. We get it. Life is going to look very different for a while, but thankfully one thing that won’t change is how our team at Northfront Financial is committed to you, your life, and your finances. Whether you have questions, concerns, or need help processing the market roller coaster, you have us to rely on. Do your friends and family have this kind of support system? A Helping Hand In Hard Times Most of us are now at home with our families day in and day out. We’re reminded of the importance of our friendships and other relationships and learning how to be there for each other in creative ways. We know that you are not just concerned about yourself, but also your loved ones. There is a lot of fear in our world right now, and fear can make people do unwise things with their money. Our goal is to see you and those you care about weather this storm with confidence and come out the other side ready to move forward and work toward your goals. If you have friends or family members who are in need of financial guidance during this stressful time, we’d love to be there for them like we are for you, analyzing and evaluating their financial picture and sharing solutions to help them stay on track to reach their goals despite market turmoil and economic uncertainty. We Are Here For Your Friends And Family…Virtually We want to let you know that we are still working and operating our business…just not in the same way as before. Just because you are quarantined, locked down, or adhering to social distancing guidelines doesn’t mean you are alone. If you or your loved ones have any financial questions or concerns and need a shoulder to lean, we are available virtually. Contact us anytime at 403-571-8960 or email to schedule a complimentary consultation. About Northfront Financial Northfront Financial is a boutique full-service financial planning firm serving individuals and families in Calgary, Alberta. The firm specializes in pension-style investing so that the quality of your retirement is not dependent on the stock market. As one of Calgary’s leading wealth management teams with highly skilled, certified team members, they help create financial capacity for their clients by deeply understanding their needs, opportunities, and strengths through their unique Northfront Process™. To learn more about Northfront Financial and how they can help you, visit their website and schedule a complimentary appointment.
Worried About Your Financial Plan? Schedule A Q&A Call Today
By Shamez Kassam, CFA, MBA Has the coronavirus pandemic and it’s far-reaching implications caused you to wake up worried or go to bed at night with your mind racing? For most of us, our schedules have been turned upside down; we don’t know what’s going to happen with our businesses or jobs; we’re concerned for loved ones; and we’re apprehensive about the markets and the economy. We get it. We are living in unprecedented times and there is no crystal ball to tell us what our world will look like in three months. But we believe there is one thing that should not be causing you to worry, and that’s your financial plan. A Plan To Avoid Worry The purpose of having a financial plan is so that you can experience confidence and be ready when chaos comes. Taking the intentional steps of examining your life situation, identifying your goals, and mapping out the path to achieve them brings peace of mind and gives you a financial future to look forward to. If you aren’t sure if your plan is set up to withstand our current economic circumstances or you are wondering if you need to make any changes to weather this storm better, we are here to help you thrive. Meet With Us Virtually! You are our number-one priority right now. So if you have questions or concerns about your money, your goals, asset allocation, risk, what the markets are doing, or anything that’s causing you financial worry, we are here as your shoulder to lean on. We know this is a stressful time and, as always, we are here to serve you in every possible way. Call 403-571-8960 or email to schedule a Q&A call today so you can cross at least one worry off your list. About Northfront Financial Northfront Financial is a boutique full-service financial planning firm serving individuals and families in Calgary, Alberta. The firm specializes in pension style investing so that the quality of your retirement is not dependent on the stock market. As one of Calgary’s leading wealth management teams with highly skilled, certified team members, they help create financial capacity for their clients by deeply understanding their needs, opportunities, and strengths through their unique Northfront Process™. To learn more about Northfront Financial and how they can help you, visit their website and schedule a complimentary appointment.
By Shamez Kassam, CFA, MBA There’s no denying it: money, and how you handle it, can make or break your life (and your stress levels). I saw firsthand the importance of financial planning and the difficulties created by poor plans when a family member passed away and his wife suddenly had to manage her family’s finances with little guidance. There’s nothing more overwhelming than trying to learn new skills and muddle through financial matters in a time of grief. I saw the incredible value a financial advisor could bring to people’s lives, helping them rest easy no matter what life or the stock market throws their way. That experience was a turning point for me in my career and is the primary inspiration behind my decision to become a financial advisor. Starting Out After earning my bachelor’s degree from the University of Alberta and working as an occupational therapist for 5 years, I obtained an MBA in accounting and finance from Columbia Business School and made a career change. I spent a handful of years in various roles within the financial industry, working with both institutional and individual investors. I started working as a financial advisor in 2010, striving to make pension style investments typically reserved for the uber-rich available to anyone. During this time, I also earned the Chartered Financial Analyst (CFA) designation and used my passion and knowledge to author Your Money’s Worth: The Essential Guide to Financial Advice for Canadians to help people navigate their financial lives and feel empowered to make wise decisions. I am currently a financial advisor and partner at Northfront Financial, one of Calgary’s leading boutique wealth management teams. What I Do Today Now, after more than 15 years in the industry, I spend my days bringing pension-style investing to my clients, using high-quality alternative assets to reduce volatility in their portfolios. Northfront’s proprietary platform gives our clients the opportunity to access the same quality of investments that are used by the Canada Pension Plan, investments you won’t find at banks or traditional financial firms. Not only does this allow my clients to relax when the stock market goes through a rough patch, but it also gives them the financial margin to make an impact with their wealth and feel confident about reaching their financial goals. I prioritize relationships, taking the time to understand my clients’ needs, apply my battle-tested industry knowledge, and lead my clients to their goals. I educate my clients so they are equipped with everything they need to avoid preventable financial mistakes and pursue success. While I serve a broad range of clients, I specialize in working with women, professional athletes, and retiring business owners. Regardless of their differences in age and profession, my clients tend to have one thing in common: they’ve received significant sums of money in a short amount of time and want to delegate wealth management to someone they can trust, someone who will help them preserve their wealth, avoid mistakes, and create a pension-style stream of income that will last the rest of their lives. I am also proud to consider myself a women’s investing advocate, walking alongside women who have found themselves suddenly single and dealing with the financial repercussions of their life events. The Best Part I got into this career because I had a desire to help others. That’s why there is nothing more fulfilling than seeing my clients live the lifestyle they dreamed of and achieve financial security because of our work together. I work hard every day to make that a reality for more people and guide my clients from point A to point B. If you are ready to see your options and partner with someone who will be your financial advocate, I’d love to help. Call 403-571-8960 or email to schedule a complimentary 30-minute consultation. I look forward to meeting you! About Shamez Shamez Kassam is a financial advisor and partner at Northfront Financial with over 15 years of industry experience. He earned a bachelor’s degree in rehabilitation medicine from the University of Alberta and worked as an occupational therapist for 5 years before making a career change. He received an MBA in accounting and finance from Columbia University’s graduate school of business and obtained the Chartered Financial Analyst (CFA) designation from the CFA Institute. Shamez spent the first several years of his finance career working with institutional investors, including BNP Paribas and Alberta Investment Management Corporation, and then began working with individual Canadian investors in 2010. Shamez firmly believes that all investors can be successful by following key principles, managing their emotions, and avoiding big mistakes. He is passionate about improving the financial literacy of Canadians, with a focus on improving financial education in the Canadian school system. As a person who stutters, Shamez serves on the Boards of the Institute for Stuttering Treatment and Research Foundation. He lives in Calgary with his wife and son. To learn more about Shamez, connect with him on LinkedIn.
The Top 5 Financial Planning Challenges In The First 10 Years Of Retirement
You’ve had your retirement party, cleaned out your desk, and are enjoying your long-awaited retirement years. Lots of things end when you retire and enter a new phase of life. But do you know one thing that shouldn’t end? Financial planning. That’s right. You may have thought that years of saving, investing, calculating, and planning are over now that you’ve reached your goal, but that’s just not true. You still have decisions to make, actions to take, and plans to strategize so that you can experience a fulfilling retirement, free of worry and regret. We’ve found that most retirees face the same 5 financial planning challenges during the first 10 years of retirement. Read on to learn what they are so you can be prepared. 1. Not Creating A Withdrawal Strategy You’ve saved for years, and now you need that money to live on. How you take it out is just as important as how you put it in. That’s why you need to capitalize on your wealth by determining the most tax-efficient way to withdraw funds in your golden years. Different financial accounts are taxed at different rates. RRSPs get taxed at the ordinary income tax rate when you withdraw while TFSAs are taxed beforehand, so the money is withdrawn tax-free. Funds in a taxable investment account are taxed at the capital gains tax rate, which is different than your ordinary income tax rate. As you can see, calculating the best time to pull from each account is enough to give anyone a headache. But the last thing you want is to get hit with a hefty tax bill when you’re trying to stretch your money for decades. Create a withdrawal strategy with the help of a trusted professional who can make sure you’re withdrawing funds at a sustainable rate and that you’re doing it in a tax-efficient way. 2. Throwing The Budget Away Many people spend their retirement years doing all the things they never got to do when they were working—starting a passion project, remodeling the house, traveling the world, and more. It’s easy to underestimate the amount of money you’ll spend during those first few years when you don’t account for all these “extras.” Overspending, even for a short period, can shave years off the longevity of your assets. The solution? Create a spending plan. Calculate your monthly income given your withdrawal strategy and then create a budget, tracking your money along the way so you stick to your goals. 3. Ignoring Inflation Another major challenge we see new retirees face is the desire to play it safe in the stock market. This does more harm than good as it leads to inflation risk. Too often, investors focus on the dollar value of their portfolios without considering their purchasing power. As the prices of items increase, today’s dollars will buy less in the future. Since 1960, inflation has increased an average of about 3.7% per year, though it does fluctuate over time. (1) If we assume that prices will continue their long-term trend and rise about 3% per year for the next 30 years, an investor who currently needs $50,000 to cover annual living expenses will need approximately $67,000 in 10 years, $90,000 in 20 years, and about $120,000 in 30 years. And this is just to maintain the same purchasing power. As tempting as it may be, resist the urge to worry about short-term stock market volatility. With a retirement that could easily last 20 to 30 years, inflation is still a significant threat to your nest egg. Sit down with a trusted professional who can help you strike a balance between protection and growth. 4. Neglecting To Create An Emergency Fund Could you comfortably pay for an unexpected, major expense in retirement without jeopardizing your financial future? For most of us, the answer is no. Just as you were taught to have an emergency fund in your formative years, it’s even more critical to have one in your retirement years. Most professionals recommend having at least 12 to 18 months of expenses in an easily accessible savings account. (2) This may sound like a lot, but an emergency fund serves two purposes: it covers unexpected expenses and it provides stability during economic downturns. This means you can optimize your portfolio to beat inflation, as suggested above, while having a safety net to fall back on. 5. Planning On Your Own It took decades of strategizing to grow and protect your wealth up until this point. Don’t just wing it in retirement and try to manage your money alone. Having a trusted financial advisor by your side can be the difference between having a retirement fund that dries up and having one you can’t outlive. If you want to experience a secure retirement, let us help. Call 403-571-8960 or email to schedule a no-obligation conversation. About Northfront Financial Northfront Financial is a boutique full-service financial planning firm serving individuals and families in Calgary, Alberta. As one of Calgary’s leading wealth management teams with highly skilled, certified team members, they help create financial capacity for their clients by deeply understanding their needs, opportunities, and strengths through their unique Northfront Process™. To learn more about Northfront Financial and how they can help you, visit their website and schedule a complimentary appointment. ____________ (1) (2)
Wouldn’t you love to have the financial margin to not only secure your future but also impact your family, community, and pursue your goals? It might seem like a pipe dream, but with the right strategies and team on your side, it’s not. At Northfront Financial, this is what we do best. Who We Are Northfront Financial is one of Calgary’s leading boutique wealth management teams with highly skilled, certified team members. We specialize in pension style investing so that the quality of your retirement is not dependent on the stock market. We’ve been faithfully serving our clients since 1979, specializing in goals-based financial planning that puts the client first, always. What We Do Since day one, our mission has been to provide a world-class wealth management experience built on an in-depth understanding of our clients’ lives, dreams, concerns, and needs. Through our unique Northfront Process™, we first analyze the challenges, opportunities, and strengths of each client’s financial situation. We do this to help our clients establish a vision of what they can achieve, guide them down the path to reaching their goals, and continually follow up with them along the way. Once we know what you want and what makes you tick, we then apply our comprehensive wealth management strategies and services to your situation, including retirement planning, tax planning, investment management, insurance, and estate planning to make sure every aspect of your financial life is addressed. We even offer pension-style investing options to those who might not have such an option otherwise. Through our platform, we are able to offer access to the highest quality pension investments that are normally only available to the ultra-wealthy. The goal is to limit portfolio volatility, and help you create financial capacity and freedom so you can align your money with your values and impact those around you. The Northfront Difference Financial planning can seem intimidating, but if you knew you could take control of your financial life in an inviting atmosphere with friendly staff who make the experience comfortable, would you take the leap? We believe our knowledge, expertise, unparalleled service, and access to high quality pension investments is what draws people to work with us. Clients know they will receive focused and personalized service and work with helpful staff who are passionate about doing what’s best for them, making sure their needs are met, and helping them create a financial future they can look forward to. Our Goal For You What it comes down to is this: we want to see you thrive, both now and in the future, and your financial situation plays a significant role in making that happen. Whatever it is you dream of, whether it’s financial security in retirement, supporting your community, saving for your child’s education, or traveling and making memories with your family, we want to help you make it a reality. If you’re ready to see what your financial life could look like with the right team behind you, call 403-571-8960 or email to schedule a free introductory meeting. We look forward to hearing from you! About Northfront Financial Northfront Financial is a boutique full-service financial planning firm serving individuals and families in Calgary, Alberta. As one of Calgary’s leading wealth management teams with highly skilled, certified team members, they help create financial capacity for their clients by deeply understanding their needs, opportunities, and strengths through their unique Northfront Process™. To learn more about Northfront Financial and how they can help you, visit their website and schedule a complimentary appointment.