A Canadian Retirement Planning Book

First Published: ADawnJournal.com Feb 4, 2009

Bay Street veteran investment professionals and Toronto authors Warren Mackenzie and Ken Hawkins have sent me two copies of their recently published book NEW RULES OF RETIREMENT: WHAT YOUR FINANCIAL ADVISOR ISN’T TELLING YOU. One copy is for my free giveaway and one copy is for me to review. I just finished reading this book today, so here’s my review.

Retirement Planning Is Not Just Financial Planning

The majority of traditional financial planners will map your retirement planning based on your bank accounts. They will not look at the human aspect of retirement, and therefore will miss the bigger picture of retirement. This may sound odd, but remember that financial advisors are working for the financial industry and your bank accounts are what are making deep-pocketed profits for these financial institutions and advisors.

Retirement is a process which is made up of both financial and non-financial aspects. Of course, you will need to be in a stable financial situation to enjoy your retirement years, but you also need to look at it from a broader human perspective. You need to understand, plan, and consider your emotions, attitudes, goals and so on. In order to enjoy your retirement fully, you have to be ready to face different situations than what you have expected, consider different paths based on those unexpected situations, and tackle them with financial and psychological preparedness. The right preparation, expectations, and attitudes will help you make it through your retirement journey.

Things Have Changed

Nowadays, retirement is not the same as it used to be in the old days. In the old days, retirement was meant to be sitting idly and doing nothing but relaxing. These days, retirement is not just living a life of leisure and sedentary activities. Rather, retirement is an opportunity to take you to the second phase of your life. This is the other part of life which will be filled with activities you have always wanted to experience but never had a chance to do—pursuing your dreams, living in a new place, living a life full of activities, or embracing new challenges to live a more fulfilling and self-developed life.

Stay Away From Old Retirement Myths

The authors talk about some old retirement myths perpetuated in our society. If you are still planning your retirement based on these myths, it is high time you review your retirement road-map and throw away these myths. Here is the list of myths the authors pointed out in the book:

Retirement Means Not Working – Myth 1
Retirement Is Strictly An Economic Event – Myth 3
You Can Determine The Age At Which You Retire – Myth 4
Retirees Need 80 Percent Of Their Pre-Retirement Income To Maintain Their Standard Of Living – Myth 5
Retirees Need To Live Off Their Investment Incomes Without Touching The Principle – Myth 6
Retirees Should Take Little Financial Risk – Myth 7
Retirees Should Minimize Their RRSP/RRIF Withdrawals – Myth 8
Retirees Do Not Need Advice – Myth 9
The Most Important Objective In Retirement Is To Maintain Your Pre-Retirement Standard Of Living – Myth 10

The authors discussed these myths in the first chapter, explained why they are wrong, and then pointed out what you should do to protect yourself. The authors did a good job here starting the book with these myths; it gives the readers an idea of what to expect once you cross the door and also it makes coming chapters more riveting.

Thirty Eight Rules

The book consists of thirty eight rules. Each rule is one chapter. Authors talk about a wide range of topics covering a variety of subjects, such as how to plan for retirement, how to construct a simple portfolio, what government services are available to help you with your retirement, and so on.

What I Like

I like those chapters most wherein the authors talk about Old Age Security, Defined Benefit Plan, how early retirement affects your benefits, Life Annuity (a type of product), and how to make the most out of your RRSPs, RRIFs, etc. I believe these chapters provide invaluable information for lots of readers who have very little or no knowledge on these products and benefits. The authors explained them in simple ways and these chapters are what make this book distinctive amongst its peers.

What I Don’t Like

Due to the fact that the authors discussed so many topics in one place, you will have a feeling that it’s just kind of skimming the surface and not actually taking you too deep. This is understandable, however, as this 220-page book would have turned into a 2000-page book had the authors taken a deep dive.

My Take

If you are a regular ADJ reader, you know that I go by three very simple and straightforward ratings for my book review: A Must Read, Worth Reading, and Do Not Read. For this book, I will slightly modify my rating, still keeping within the range. This book is mainly targeted to baby boomers, and the publication timing is perfect in light of the current global financial meltdown (the first batch of baby boomers will be 63 in 2009 and will receive Old Age Security in 2011). If you are a baby boomer, or if you are over fifty, my rating is A Must Read.

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