Don’t let financial jargon throw you off your game

Investing is a scary prospect, and most of us don’t invest in the stock market or if we do, we invest poorly. Market upturns, and market downturns leave many investors hopeless for various reasons. If we need our money to grow to help us when we retire, and because of COVID or market uncertainty our portfolio values (which is the amount of money we have in our investments) have declined, then we find that income levels which rely on the value of our portfolio may have also declined. This leaves us confused as to what to do about it. So, we educate ourselves and find that we are bombarded with tons of information from various sources. Much of the information and explanations comes from industry experts using terms we have never heard before. My question is how should you know what to do if you don’t even understand what the problem is in the first place?

While it is impossible to control what happens in markets, you may be able to make sense of events by gaining a better understanding of relevant investment terms.

In the hope of assisting investors to make better sense of the myriad of terms being used, we have taken the following from Debra Slabber, Business Development Manager of Morningstar Investment Management South Africa, and we have highlighted a few financial terms that are often used during market downturns.

Recession

The term “recession” in its strictest definition means that an economy experiences two consecutive quarters of negative economic growth because of a significant decline in general economic activity.

During a recession, businesses experience less demand (i.e. they sell fewer products and/or services). These businesses then usually react to this by cutting costs and sometimes laying off staff (retrenched) to protect the bottom line and profitability of the business. When staff are retrenched, this leads to higher unemployment rates.

“Generally, a recession does not last as long as an expansion does. Historically, the average recession (globally) lasted 15 months, compared to the average expansion that lasted 48 months.

Causes of a recession can vary. While COVID-19 has certainly put a drag on the global economy, it remains to be seen whether it will have lasting effects on economic output. It is important to realise that recessions are a normal part of an economic cycle and every person will experience a few in their lifetime,” says Slabber.

Bear Market

A bear market is when a market experiences a decline of at least 20%, usually over a two-month period or longer. Bear markets often arise from negative investor sentiment because the economy is slowing or due to the expectation that it will slow down. Signs of a slowing economy may include a decrease in productivity, a rise in unemployment, a decrease in company profits and lower disposable income. When someone talks about having a “bearish” view, it means they have a pessimistic outlook.

Slabber points out that while a recession and a bear market often go hand in hand they are associated with different issues. The distinction between a bear market and a recession is that a recession is measured by a decline in economic output (also known as gross domestic product or GDP), whereas a bear market is identified by a decline in stock market values in excess of 20% over a prolonged period as a result of negative investor sentiment.

Some other terms that you might come across when reading up on market downturns include:

• A pullback, which is a short-term price decline within a longer-term trend of price increases.

• A correction, which is when an asset's price falls by at least 10%.

• A market crash, which is a drastic market decline over a short period.

• A depression, which is a long-term recession that can last multiple years.

Volatility

Markets have been highly volatile of late, meaning equity prices have bounced up and down rather severely from one day to the next. Volatility marks how much an investment's price rises or falls. If an investment's price changes more dramatically and/or more often, it's considered more volatile.

Price volatility is usually expressed in terms of standard deviation, or how much an investment's price has fluctuated around its average price over a certain period. A higher standard deviation implies an investment's price is more volatile.

“Investments with more uncertain outlooks, like equities, are typically more volatile,” says Slabber. “That is because equity returns are based on a company’s profitability, which is difficult to predict. In uncertain market environments, like the current one, investors tend to be especially pessimistic about how businesses will perform, which can result in steep market declines.”

So, why would you want to invest in a more volatile investment? Because you are likely to be rewarded with a higher return over the long-term.

Risk

Volatility and risk are terms often used interchangeably, although they are very different. Risk should be defined as “permanent capital loss” or the chance that you won’t meet your financial goal.

For a retiree, one risk might be not taking on enough risk. By reducing your exposure to more volatile or "risky" assets such as equities, you could significantly limit your portfolio's potential return over the long run. By remaining in cash for prolonged periods of time you run the risk of increasing your tax bill significantly (due to interest earned being fully taxable) or losing purchasing power due to the eroding effects of inflation.

Slabber explains that even though a more equity orientated portfolio will experience more volatility in environments like what we are facing now, your asset allocation might not be overly risky. “If you're far away from retirement, you have time to ride out your portfolio's short-term volatility and take advantage of longer-term gains that equity markets will generate,” she says.

Loss Aversion

Loss aversion is the theory that investors feel more pain when they lose a certain amount of money than they feel pleasure when they gain an equal sum. In other words, you would feel more discomfort from losing R1,000 than pleasure from gaining R1,000.

Time and time again it has been proven that selling your investments in a downturn and giving up on your long-term financial plan is detrimental to a successful investment outcome.

So where does that leave investors?

Things might not be so hopeless after all.

“Recessions, bear markets, drawdowns and volatility are all part of the world of investing and building long-term wealth. What matters most is our actions and habits during this time. These can either hurt you or help you, but most importantly always remember that ‘this too shall pass’,” concludes Slabber

Retirement Index (France)

France loses five places in this year’s Global Retirement Index, pushing it to the 15th place. With an increase in tax pressures and old-age dependency, the French economy has also suffered losses in purchasing power. This is reflected in the Finances in Retirement sub-index where France dropped from the 46th position to the 58th. In  addition, the income gap has widened and unemployment remains at 9.3% from 2013 to 2014, which moves  France to the 28th place in the Material Wellbeing sub-index. 

However, France manages to maintain its spot on the podium for the Health sub-index, with a special mention to  its high life expectancy and social security system especially favorable to retirees. France also maintains 9th position for Quality of Life, which reflects government policy towards the environment.

Generation Squeeze

When we as a Board, were asked for some names to speak at the SHARE Family Services Annual General Meeting, someone suggested Paul Kershaw and said that his presentation on Generation Squeeze would be interesting and challenging but would fit within our mandate and goals. 

I was a bit sceptical as I was not sure what I as a Boomer could learn from the younger generation. I also thought that what the movement would pit one generation against another as we fight for limited resources. I  was wrong, after the presentation, it was clear to me that it is our children that are the ones being squeezed and we can help them by changing our attitudes and by taking actions. I support the ideas raised by this movement and suggest that you take a look at their website here. 

According to Paul Kershaw, Generation Squeeze is a generation that is squeezed between lower incomes and higher costs for housing, tuition, child care and saving for retirement.  Here are some of his ideas as presented on his website.

High home prices squeeze generations under age 45 with crushing debt, which they must pay with wages that have fallen compared to a generation ago, and in jobs that rarely contribute pensions.

The national response?  Governments spend just $12k on benefits and services per Canadian under 45, compared to nearly $45k for every retiree.

Since two earners barely bring home today what one breadwinner did in the 1970s, we’ve gone from 40 hour work weeks to closer to 80 hours.  The result?  Generations raising young kids are squeezed for time at home.  They are squeezed for income because housing prices are nearly double, even though young people often live in condos, or trade yards for time-consuming commutes.  And they are squeezed for services like child care, which are essential for parents to deal with rising costs, but are in short supply, and cost more than university.

Paul believes that his generation and ours (The boomers) CAN CHANGE THIS.  While the deck may be stacked against us now, we can get “A Better Generational Deal” – one that gives all generations a chance, including Gen Squeeze. Join us to make this Better Deal a reality.

Here is one of his ideas on how to bring about this change:

Restoring better balance between generations begins with incremental change.  We recommend shifting annual spending on each Canadian under 45 from around $12k to $13k, while maintaining spending for retirees around $45k.  Who could object to this?

This small shift could create a $22 billion dollar budget to invest in young people.  We know the policy changes required to Reduce the Squeeze in ways that make family time and services affordable while still leaving room to pay down debt and save for retirement.

But we don’t know all the ingredients for a better generational deal.  You may have other priorities. Tell us.

Problem is, we’re unlikely to achieve any of our priorities for a better generational deal until Canadians across generations actively vocalize that the deal is stacked against younger Canadians today.

So donate your voice to call for a better generational deal.  Here’s how to Get InvolvedNow.

You’ll learn it’s not your fault that incomes are lower, student loans larger, housing costs higher, and financial stability further out of reach.  These problems reflect bad timing more than personal failure.

So change what you know to change how you feel.  The Gen Squeeze campaign is replacing anxiety and even shame among younger Canadians with the confidence to call actively for a new generational deal.

Suspended Coffee

What a great idea and one that more of us should consider. 

Thanks to Norm at Northern Insights for the post.

From the forum at Urban Diner, a Vancouver-based online magazine for food and restaurant lovers around British Columbia. By Publisher Paul Kamon:

"We enter a little coffeehouse with a friend of mine and give our order. While we're approaching our table two people come in and they go to the counter - 'Five coffees, please. Two of them for us and three suspended'

They pay for their order, take the two and leave. I ask my friend: 'What are those 'suspended' coffees ?'

'Wait for it and you will see'

Some more people enter. Two girls ask for one coffee each, pay and go. The next order was for seven coffees and it was made by three lawyers - three for them and four 'suspended'. While I still wonder what's the deal with those 'suspended' coffees I enjoy the sunny weather and the beautiful view towards the square in front of the café. Suddenly a man dressed in shabby clothes who looks like a beggar comes in through the door and kindly asks 'Do you have a suspended coffee ?'

It's simple - people pay in advance for a coffee meant for someone who can not afford a warm beverage. The tradition with the suspended coffees started in Naples, but it has spread all over the world and in some places you can order not only a suspended coffee, but also a sandwich or a whole meal."

10,000 Boomers turning 65 every day for the next 19 years

Governments are worried, because they didn't do any future planning so they are continuing to attack Boomers and their younger siblings and friends through attacks on the pension system. 

Politicians of all stripes are only interested in getting elected. I love and believe the old joke,"How do you know when a politician is lying?" The answer "When they are talking." My advice to all the politicians out there is pay attention to what Boomers care about or you will be out of power fast. Keep hands off Pensions for a start.

Pensions do more than protect older workers, after they retire; they have a distinct and significant impact on the economy and play a role in job creation, according to the National Institute on Retirement Security. The organization released a report in March that provides a look at defined-benefit plans’ impact on the economy.

The report, “Pensionomics 2012,” studied data for 2009 from the U.S. Census and IMPLAN, an economic impact modeling system. The report found nearly 19 million retired Americans received more than $426 billion in pension benefits. That $426 billion paid out in pension benefits supported over $1 trillion in output, the report found, including $388 billion in direct impacts, $280 billion in indirect impacts and $341 billion in induced impacts

Ilana Bovie, director of programs for NIRS and the author of the report illustrates pensions’ impact with the example of a retired firefighter. He directly impacts his local economy when he uses his pension income to buy a lawnmower. The indirect impact of his purchase is an increase in income not just for the store where he purchased the lawnmower, but for every company involved in its production and distribution. When those companies benefit from increased income, they can hire new employees who spend their paychecks in their local economies, the induced impact of the firefighter’s purchase.

While a single firefighter buying a lawnmower is unlikely to have such a dramatic impact on the national economy, the combined force of the 10,000 baby boomers who will turn 65 every day for the next 19 years (according to the Pew Research Center) and begin retiring and using their pensions, make that pension ripple effect look more like a wave.

So if you are into surfing, relax and enjoy the wide on the wave, we are now starting to collect our pensions, and we are strong and we will continue to roll through society as we always did so get used to us as "zoomers" or "sonic boomers" but do not refer to us as seniors.

Dealing with control issues

As we get older we are faced with aging friends, relatives, and parents that may cause us some frustration and grief. One thing to think about is that the characteristics of a person's personality often intensifies as they get older. So if someone is narcissistic this personality trait will be more pronounced as they age. One of my friends is dealing with a narcissistic family member and as we talked about the issue, I suggested looking at the site developed by James Messina for some ideas.

This is clipped from Tools for dealing with control issues/learning how to detach). By James J. Messina, Ph.D.

In order to become detached from a person, place, or thing you need to:..:

First: Establish emotional boundaries between you and the person, place, or thing with whom you have become overly enmeshed or codependent on.

Second: Take back power over your feelings from persons, places, or things which in the past you have given power to affect your emotional well-being. 

Third: "Hand over'' to your Higher Power the persons, places, and things which you would like to see changed but which you cannot change on your own. 

Fourth: Make a commitment to your personal recovery and self-health by admitting to yourself and your Higher Power that there is only one person you can change and that is yourself and that for your serenity you need to let go of the "need'' to fix, change, rescue, or heal other persons, places, and things. 

Fifth: Recognize that it is "sick'' and "unhealthy'' to believe that you have the power or control enough to fix, correct, change, heal, or rescue another person, place, or thing if they do not want to get better nor see a need to change. 

Sixth: Recognize that you need to be healthy yourself and be "squeaky clean'' and a "role model'' of health in order for another to recognize that there is something ``wrong'' with them that needs changing. 

Seventh: Continue to own your feelings as your responsibility and not blame others for the way you feel. 

Eighth: Accept personal responsibility for your own unhealthy actions, feelings, and thinking and cease looking for the persons, places, or things you can blame for your unhealthiness. 

Ninth: Accept that addicted fixing, rescuing, enabling are ``sick'' behaviors and strive to extinguish these behaviors in your relationship to persons, places, and things.

Tenth: Accept that many people, places, and things in your past and current life are "irrational,'' "unhealthy,'' and "toxic'' influences in your life, label them honestly for what they truly are, and stop minimizing their negative impact in your life.

Eleventh: Reduce the impact of guilt and other irrational beliefs which impede your ability to develop detachment in your life. 

Twelfth: Practice "letting go'' of the need to correct, fix, or make better the persons, places and things in life over which you have no control or power to change.

Personally, in place of the phrase "your higher power", I put God. I hope this list is helpful.

There are two more things that I want to add that I did not write. These have more to do with relating with someone who has borderline personality disorder, but they are useful elsewhere.

 (SET)Support - Empathy - Truth

Support refers to an initial statement, which indicates the loved one supports the person. It is a statement that begins with "I" and demonstrates concern and a desire to help. It can be anything that establishes a foundation for the relationship or interaction: "I want to try to help you feel better," "I care about you," or "I am worried about how you are feeling."

The support statement is meant to reassure the person that the relationship is a safe one, and that his/her needs matter even during this difficult moment.

Empathy refers to communicating that the loved one is trying to understand what the person is feeling, and focuses on "you." It is not a conveyance of pity or sympathy, but instead a true awareness and validation of the feelings of the BP: "I see you are angry, and I understand how you can get mad at me," "How frustrating this must be for you."

It is important not to tell the person how he is feeling, but instead put his demonstrated feelings into words. The goal is to convey a clear understanding of the uncomfortable feelings he is having and that they are OK to have, thus validating his feelings. Without such a statement of empathy, the person may feel that his feelings are not understood. It is important to use feeling words, as in the examples above.

Truth refers to a realistic and honest assessment of the situation and the person's role in solving the problem. It is an objective statement that focuses on the "it" -- not on the subjective experience of the person or yourself. Often the person may seem to be asking, or demanding, something impossible, not taking an active role or responsibility in resolving the issue, or even presenting you with a "no-win" situation. The truth statement is meant to clearly and honestly respond to the difficult demand or behavior of the person, while placing responsibility appropriately: "This is what I can do.," "This is what will happen.," "Remember when this happened before and how you felt so bad about it later."

It is important to use the support and empathy statements first, so that the person is better able to hear what you are saying, otherwise the truth statement may be experienced as little more than another, and expected, rejection creating even more defensiveness or anger.

PUVAS

(use for complaining and/or blaming)

- Pay attention

- Understand fully

- Validate emotions

- Assert yourself

- Shift/Share the Responsibility

Paying attention to what is happening and what is being said helps us avoid making assumptions.

Understanding what someone is trying to communicate may require seeking clarification so we don't make assumptions.

Validating the emotional statements of the other person will pave the way for further smooth communications.

Asserting yourself is a form of setting boundaries and is a very important piece of the healthy communication process.

Shifting responsibility where it belongs holds each party accountable for their own feelings and behaviors. This can be in response to four different scenarios...

1.) If your person is blaming you for his or her feelings and behaviors

2.) If you are placing blame on yourself inappropriately

3.) If you are trying to fix their problem

4.) If you recognize that you have done something to contribute to the problem.

``Letting Go''

To ``let go'' does not mean to stop caring.

It means I can't do it for someone else.

To ``let go'' is not to cut myself off.

It's the realization I can't control another.

To ``let go'' is not to enable,

but to allow learning from natural consequences.

To ``let go'' is to admit powerlessness

which means the outcome is not in my hands.

To ``let go'' is not to try to change or blame another.

It's to make the most of myself.

To ``let go'' is not to care for, but to care about.

To ``let go'' is not to fix, but to be supportive.

To ``let go'' is not to judge,

but to allow another to be a human being.

To ``let go'' is not to be in the middle arranging all the outcomes,

but to allow others to affect their own destinies.

To ``let go'' is not to be protective.

It's to permit another to face reality.

To ``let go'' is not to deny, but to accept.

To ``let go'' is not to nag, scold, or argue,

but instead to search out my own shortcomings and correct them.

To ``let go'' is not to criticize and regulate anybody,

but to try to become what I dream I can be.

To ``let go'' is not to adjust everything to my desires

but to take each day as it comes and cherish myself in it.

To ``let go'' is to not regret the past,

but to grow and live for the future.

To ``let go'' is to fear less and LOVE MYSELF MORE.

Baby Boomer Handouts Hamper Saving

The following was shared by  Lisa Ann in Active Aging: Baby Boomerfs living life to the Max on Linkedin
 
Ameriprise Financial in 2007 surveyed three generations—boomers, their children and their parents—and learned that less than half of boomers (44%) were trying to save for retirement while also providing support for their children and parents.

Fast forward to December 2011: The portion of boomers saving for their own retirement has fallen to one in four (24%)—but they’re still helping out their families. More than half (58%) are assisting their aging parents, including helping them pay for groceries (22%), medical expenses (15%) or utility bills (14%).

“It’s disturbing that people are still providing the same, intense level of support, up or down, and they’re five years closer to retirement,” says Suzanna de Baca, Ameriprise’s vice president of wealth strategies. “This is not registering with boomers.”

The phone survey included 1,006 baby boomers—born from 1946 to 1964—who have $100,000 or more in investable assets, 300 parents of boomers and 300 children of boomers who were at least 18 years old. The survey had a margin of error of three percentage points for the boomers and six points for the other two groups.

At the same time that boomers are providing all kinds of handouts to their children—paying utility and insurance bills along with college tuition and car payments—they also have “this weird level of guilt and concern” that their children don’t know how to manage money, de Baca says.

Meanwhile, the children receiving the handouts say their boomer parents haven’t talked to them about money—and that they are worried that their parents won’t have enough savings to retire.

“It seems that the people being squeezed right now are the boomers, and that there are two generations in some serious denial,” she says.

Her advice for boomers struggling with their own retirement-savings goals: “You have to cut the cord. And you have to assume your adult children may not be able to provide for you someday.”

The research found that boomers say that given a choice between paying their kids’ credit-card bills or saving for retirement, they’d save for retirement—“but we found nothing backing up that they’re really doing it,” de Baca says

Choosing Your Friend

This is from a post by  Patrick Mathieu  whose work I admire and read.

(Today, I want to ask you lots of introspective questions and give you lots to think about.  After all – that’s what friends do for one another!)

What does friendship mean to you? What kind of friend are you to the people you care about? What kind of friends do you surround yourself with?

For many people, friendships “just happen”.  People come in and out of our lives all the time; and some of them stick around as friends.

Jim Rohn once said “You are the average of the five people you spend the most time with.”

I want you to think about your friends and consider that quote. Next, I want you to think about the path you are on in your quest to Choose the Life You Want. Is there a fit?

Are your friends firmly in your corner, supporting you through your evolution?

Or do you have the kind of friends who want you to stay the way you used to be in “the good ole days”?

Do they look at you now and say: “Wow!  You’ve really changed! I hardly recognize you anymore!” (said with enthusiasm)?

Or do they look at you now and say “Wow… you’ve really changed! I hardly recognize you anymore!” (said with judgement, suspicion and disapproval)?

As adults, it can be very scary to think about facing the disapproval of old friends.  But that fear serves no one.  Keeping someone in your life just because they’ve been there for ages, doesn’t serve either of you if you are moving in different directions.  People change, people grow and sometimes friends grow apart.

I want to leave you with a quote from Marianne Williamson.  Please note the section I’ve bolded.

“Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure. It is our light, not our darkness, that most frightens us. We ask ourselves, who am I to be brilliant, gorgeous, talented, and fabulous? Actually, who are you not to be? You are a child of God. Your playing small doesn’t serve the world. There’s nothing enlightened about shrinking so that other people won’t feel insecure around you. We are all meant to shine, as children do. We are born to make manifest the glory of God that is within us. It’s not just in some of us, it’s in everyone. And as we let our own light shine, we unconsciously give other people permission to do the same. As we are liberated from our own fear, our presence automatically liberates others.”

Let the Band play on.

A friend of mine died suddenly the other day with his family while on holiday in Texas. Bob and I first worked together back in the 70’s when he started teaching Band and Choir at the Inner City school that we both worked at when he started teaching. 

 Bob and I had gone to high school together, (he was three years behind me, but I knew him through my brothers). Bob was full of life and love for music; it was in his soul. Bob build up the band program at the school, working long hours, taking kids on band trips that became legendary (if not among the students, among the people who travelled with him). 

Bob left that school a few years after I did leaving behind a legacy that lives on today for his students as evidenced by these facebook comment from some of his students from his time with me at Whalley:

RIP Mr. Bob LaBonte, you will be missed! I remember the late 70's and the  rough kids we were in Whalley, and how much even then we respected and  loved you. You were a special kind of teacher and person!

So sad to hear...he was my favourite teacher is all of West Whalley. He alway seemed to respect and understand us. I will always remember our band trips. RIP Mr. LaBonte.

Bob moved on to other schools, built wonderful band, and choir programs, and he was always looking for a challenge. When he retired a couple of years ago,  like me he became bored wit retirement and was quickly re-hired by the district and ended up teaching on a temporary contract at Frank Hurt (an Inner city school in Central Surrey). During his first year at Frank Hurt,(two years ago),  he started to build the Band program back up, by his second year it was in full swing, and Bob was hired on a continuing contract to continue his work at the school

His second year was this last school year and I was lucky enough to work with him again. Bob rarely took lunch as he would rather take the time to work with students who wanted extra practice time. When he did take lunch, he and I would talk about the Band program, old times, old friends, his family and how he was looking forward to next year. 

He was very excited that he had expanded the program and he had a lot of grade 8’s coming into the program. We talked about his upcoming trip where he was going to go to Texas, then New Orleans and other areas where he could relax and enjoy the music. We heard today that he had died in Texas, in his sleep. 

His death is such a loss to his family, his friends and to all of the people that he touched. Music was in his soul and my sympathy goes to his wife and children. Bob LaBonte, rest in peace, you will be missed!

Interesting perspectives on those over 65

The following was written by Jennie L. Phipps 

U.S. Census Bureau sent out a host of facts and figures about people age 65 and older. Here are six of the most significant for people doing some retirement planning.

1. We're big and getting bigger. In 2010, there were 40.3 million people in the U.S. who were 65 and older, about 13 percent of the total population. By 2050, as boomers age, that number will have climbed to 88.5 million and 20 percent of the population.
2. Politicians, don't mess with boomers and old people. Seventy percent of people 65 and older and 69 percent of people 45 to 64 voted in the 2008 presidential election.
3. We ladies have to stick together. Among people 65 and older, there are 90.5 men for every 100 women. Among those 85 and older, there are 58.3 men for every 100 women.
4. Florida is the senior-citizen capital. More than 17 percent of Florida's population are older than 65, followed by 16 percent of the population of West Virginia, 15.9 percent of Maine, 15.4 percent of Pennsylvania and 14.9 percent of Iowa. The county nationwide with the highest percentage of residents older than 65 is Sumter County, Fla. (50 miles west of Orlando) with 43.4 percent.
5. We're aging fast. The fastest-growing age group in the U.S. is people ages 85 to 94, increasing in the last decade from 3.9 million to 5.1 million. The census projects that by 2050, there will be 601,000 people older than 100 in the U.S.
6. But we're not ready for retirement yet. 6.7 million people 65 and older were still in the work force in 2010. The census says that by 2018, the number will reach 11.1 million. About 57 percent of those people work full time and 42 percent are in managerial or professional positions

Read more:

Women plan for retirement differently than men

The following was written by Jennie L. Phipps and posted at Bankrate.com on Sunday, January 29, 2012 and I thought it was interesting because as a man, I do not think about retirement in these ways and maybe I should.

Ameriprise Financial has been studying that truth, and it has come up with at least five ways women plan for retirement differently than men. None of them should surprise you.

1. Women want to stay close to family. Forty percent of women say proximity to family is a key factor in determining where they will retire. Only 27 percent of men think that way.
2. Women don't want to get too far away from friends, either. Only 13 percent of men say leaving friends behind would be a retirement issue that would concern them, but 21 percent of women say it's important to keep friends close by.
3. Health worries women. More than 54 percent of women are doing something specific to make sure they stay healthy in retirement, compared to 48 percent of men who have that on their agendas. Some 38 percent of women don't want to stray too far from familiar doctors and health care facilities while 32 percent of men say that's important.
4. Women let the men in their lives manage the money. The Ameriprise study found that more than half of men  -- 54 percent -- report setting aside money in their own investments compared to 46 percent of women who say they’ve done the same. That's probably part of the reason that 31 percent of men compared to 20 percent of women say they know how much money they'll need to retire.
5. Women know how to make retirement fun. More than 25 percent of women say they've spent time figuring out how they'll rest and relax in retirement, while only 19 percent of of men have given that much thought.

Read more:

More OAS debate

The Illusory Savings of Hiking the Age of Eligibility for OAS, Posted by Andrew Jackson on March 27th, 2012

Former Assistant Chief Statistician Michael Wolfson shows that governments collectively stand to save very little from hiking the age of eligibility for the OAS/GIS.

The math (based on the SPSDM):

In 2011, cutting OAS/GIS from seniors age 65 and 66 would save the federal government $4 Billion.

However, the feds lose $500 million and the provinces $300 million in personal income tax revenues  (since benefits are taxable.)

Plus there is a $300 Million loss in sales and similar indirect tax revenues due to reduced purchasing power,  $200 Million of which would be at the provincial level.

Plus – assuming no increase in employment income and no accelerated draw down on savings – poverty rates for the age group would double, forcing many on to social assistance and increasing other provincial program expenditures.

If the feds cushioned that blow to low income seniors and the provinces by preserving access to the GIS for the most vulnerable seniors “the net effect on the fiscal balances of both levels of government combined – what ultimately matters to taxpayers and the economy – would be essentially nil.”

A peanut joke for my grandson and new names for Boomers

 Some Canadian humour for my Australian Grandson.  Two peanuts were walking down the street. One was asalted.

On  a slightly differenct topic, I am not the only one who think that my age group needs a new name to desribe us. For another perspective on this read this article:

New term for Senior Citizen needed: Baby Boomers may apply, Posted on February 15, 2012 by bcrowley

Barb  is the founder of an online social network for Baby Boomers www.snabbo.com and you can follow her on twitter at @snabbo.

Barb is ahead of me in the online world as you can follow her on twitter, and I am not there yet, although I am hearing interesting things about the twitterverse. Barb has an interesting online social network, so if you have time I recommend you join her and read her views.

More on what drives the boomers

As am early boomer, I have some ideas on what drives us, I have talked about this before and believe that as we understand the boomers we will start to recognize changes that will happen in our society. As the boomers go, so goes society.

 Baby Boomers, between 1946 and 1960, are in their mid 50's a dangerous age. The oldest is 66, (soon to be 67) the youngest 52 with the medium age 56. At the beginning of the century those older than 50 controlled 80% of the personal wealth.  We still do.

By understanding the Baby Boomers you will have a sense of what will be happening in our society over the next few years and why I am hopeful that the promise of the "just society" will return for our grandchildren.
1. The home is still seen as a sanctuary from the outside world and while many of us are in shock because we or friends lost their home, we still need our home to be our sanctuary, and our anger at those who have stolen our sanctuary is growing.
2. The average boomer worked at least 49 hours a week in 2001 compared to 40 hours in the 1960's. Time becomes very precious and as we watch our wealth decline we are inclined to work longer and smarter, as a result we are very aware and very unforgiving of those being wasteful with our tax dollars.
3. As a group, we believe in the youth, so as we mature we will fight the aging process.
4. Concern for the environment, and the ecology which had its roots in the 60's is alive and growing today, and many of the Boomers feel embarrassed that our Government (Canada) withdrew from helping the environment and that our government is a servant of the tar sands.
5. With less disposable income, people still want quality so even with less income, we still demand quality
6. Baby boomers are getting others to do the more routine tasks for them if they can afford to do this.
7. Once the first group of baby boomers pay off their mortgages they will have more disposable income. They will use this income on personal items. Sports such as golf will be very popular.
8. As career and ambition mature, baby boomers will become more concerned about family. The traditions of the 50's are coming back into style. People will spend more time with their families.
9. Baby boomers want to be the same but different than other generations and will work hard to be different.
10. Affordability Not all us are rich. Government taxes, the cost of living, and other life pressures will force us to either go into more debt or cut back on spending and look for the bargains.

Based on the latest stats, many of us are choosing to go deeper into debt, but as the majority get closer to retirement, the spending spree should start to slow down. We will be less tolerant of wasteful spending at all government levels, but we will still demand good health care and a strong pension program.

Pension envy grows as boomers retire

I found this article By Jonathan Chevreau, Wealthy Boomer; Financial PostOctober 29, 2011, interesting.

There were several signs this week that pension envy - or pension apartheid - is alive and well in Canada and likely to intensify as Baby Boomers start retiring, or try to retire.

The great divide is between the lucky 20% in cushy public-sector defined-benefit pensions and the rest hoping to retire on fluctuating RRSPs or defined-contribution pensions.

On Wednesday, pension consultants Tower Watson said those with DC pensions can expect a pension freedom age approaching age 67 - two years beyond the traditional retirement age. And Statistics Canada reported 50-year-old Canadian workers can expect to work 16 more years, three years longer than in the 1990s.

The conspicuous exception to this trend is the minority who live in the protected "Bell Jar," to use a term from a new book from Wiley Canada, Pension Ponzi. It reports the average public-sector retirement age is a spry 59.

To match public-sector DB pensions, the rest of us would need $2million RRSPs, which is why the CD Howe Institute this week urged a lifetime contribution limit of just that figure.

The book's co-authors, Lee Fairbanks and Bill Tufts of the Fair Pensions for All blog, recap how Canada's public-sector unions won their members huge salaries "that far outstrip anything comparable in the private sector and incredibly generous pensions." The beneficiaries all rate chapters in the book: government workers and politicians, teachers, firefighters, police officers and the armed forces.

Rather than bring the 80% up to their level, Fairbanks and Tufts would make the Bell Jar less cushy. They liken the status quo to a "pension Ponzi scheme" that will eventually collapse. Despite the complacency of the 20%, Canada is a small country with a large ($1-trillion) public debt. The authors expect the chickens to come home to roost, as they have in Ireland and Greece.

It's true some non-unionized private-sector workers still have DB pensions but these are rarely the Cadillac inflation-indexed plans unions negotiated for the public sector. And the trend for large corporate employers is to close DB plans to new hires, switching to DC pensions, which - like RRSPs - lack the "defined" promise of a guaranteed monthly income in retirement.

While DC plans and RRSPs may do well in protracted bull markets the reality of the past decade has been the opposite. The result is what Towers Watson terms a "double whammy" for those not in DB plans.

You could argue all workers qualify for a public DB pension in the form of the Canada Pension Plan (CPP). But average annual CPP benefits are $5,919, compared to $42,900 enjoyed by the Ontario Teachers' Pension Plan (OTPP), a difference of seven times.

When I cast my envious eye at contemporaries retired in their fifties, invariably they joined DB pensions early in their careers and stuck it out. One couple has TWO teacher pensions.

But it's by no means certain these pensions can meet their obligations. The OTPP is $35-billion short. (The author may intend to imply the OTPP is in big trouble, read the next paragraphs for another perspective)

The following is from Sue at Boomer Bucks which has a different perspective than the previous statement

The envied defined benefit Ontario Teachers Pension Plan posted record income in 2010 above its target benchmarks during the year, but this was not enough to stop its funding deficit from growing to $17.2-billion from $17.1-billion, as liabilities outpaced assets.

Further impacting this plan, not only is the Boomer demographic now beginning to influence the liabilities but on average in 1990, retiring teachers received benefits for 25 years after working 29 years. Now, members draw a pension for 30 years, after working 26 years.

With low interest rates and a staggering and uncertain stock market, it will be impossible to eliminate shortfalls through investment returns alone and the retirement demographic is blooming with Boomers.

While this Ontario Teachers Pension Plan is solid for now, and can pay benefits for years, there will need to be a plan to ensure funding to pay pensions to the younger teachers decades from now.

Look no further than Greece to see how countries can default on public-sector paycheques and break pension promises

My thoughts and some others are this,  here we go again. Instead of acknowledging how unfairly to varying degrees workers in the private sector are frequently treated by their employers, how exploited they are in the name of profit since they are the most vulnerable component in the production process, these writers, like so many on the right spectrum of economics, once again choose to resent the just achievements of collective bargaining in both the private and public sector. Teachers, firefighters, police officers, armed forces, government workers: our esteemed authors - probably graduates of the CD Howe Institute of Right of Centre Economics - are saying they do not deserve their defined benefits pensions. Why? Because most of the private sector employees don't get the same sort of benefits. What bunk!

Okay, all you folks in the private sector without DB plans who feel that way do something about it by confronting your employers instead of resenting the negotiated achievements of collective bargaining. I know that's a tough thing to do when almost everyone in the private sector is in effect a just-in-time worker living in fear, who can be axed at any moment. You are instantly replaceable, and you know it. You feel powerless and your are, caught in the vicious web of capitalism. So join the occupy movement, wear a mask if you have to, and check out senior mangement's paycheck if you still want to feel envious and resentful.

older really does make you wiser.

As we  move into 2012 there is finally proof that older is not only better, but we are wiser as well. This article posted in the Mailonline Newspaper in October offers the proof. The article is below
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Here is the evidence parents have longed to arm themselves with in disputes with their children – getting older really does make you wiser.

The over-55s use their brains more efficiently than their younger counterparts, as they are much more likely to shrug off mistakes, say scientists.

And while they may take more time to come to a decision, they are simply conserving their energy.

Younger people, by contrast, give the impression of being sharper, simply by coming up with answers more quickly. But this, say the researchers, may be a sign of inexperience rather than wisdom.

The Canadian scientists set two groups of participants tasks that involved sorting words into pairs, and scanned their brains as they completed them.

The tasks included pairing words according to category or initial letter and picking out words that rhymed.

Initially, they were not told what sort of pair to look for. Instead, the game helped them work it out by telling them if they had made the right choice or not. Over time, the categories were changed.

Neuro-imaging scans revealed striking differences between the brains of the older and younger participants when they made a mistake.

In the younger ones, the error instantly activated several different parts of the brain to help them decide what to do next.

The older people, however, held their fire until the game restarted. Only then did they start thinking about what they were going to do.

Study author Dr Oury Monchi, of the Institute of Geriatrics at the University of Montreal, said: ‘When the young participants made a mistake and had to plan and execute a new strategy to get the right answer, various parts of their brains were recruited even before the next task began.

‘However, when the older participants learned that they had made a mistake, these regions were only recruited at the beginning of the next trial, indicating that with age, we decide to make adjustments only when absolutely necessary.’

He added: ‘The older brain has experience and knows that nothing is gained by jumping the gun.

‘Being able to run fast does not always win the race – you have to know how to best use your abilities'

Dr Oury Monchi, study author

'We now have neurobiological evidence showing that with age comes wisdom and that as the brain gets older, it learns to better allocate its resources.’

Dr Monchi compared the results to Aesop’s fable of the tortoise and the hare, saying: ‘Being able to run fast does not always win the race – you have to know how to best use your abilities.

‘This adage is a defining characteristic of ageing. It is as though the older brain is more impervious to criticism and more confident than the young brain.’

Overall, the older group, who were aged between 55 and 75, took longer to complete the game but did roughly as well as those aged 18 to 35, the journal Cerebral Cortex reported.


Read more here

Memory loss? Try walking

As we age, we sometimes forget names, this could be part of a neurological condition called mild cognitive impairment,  which manifests itself through lapses in word-finding and name recall, along with other challenges like remembering appointments, difficulty paying bills or losing one’s train of thought in the middle of a conversation.

Though not as severe as full-blown Alzheimer’s disease or other forms of dementia, mild cognitive impairment may be a portent of these mind-robbing disorders

Some cognitive rehabilitation exercises, like computer games that enhance focus, may be helpful, Dr. Petersen, a neurologist at the Mayo Clinic College of Medicine in Rochester, Minnsaid said in a New York Times article, published Sept 6, 2011, but there have been few good studies to demonstrate a benefit. Compensatory techniques, like taking notes, creating mnemonics and making structured schedules, can be useful aids, he added.

But most promising is regular physical exercise, which in animal studies was found to reduce the accumulation of amyloid in the brain. An Australian study in patients with memory problems showed that brisk walking for 150 minutes a week improved cognitive function.       

So what is your excuse for not getting out and walking?

Social Media

Many of us use social media and use it wisely, however there are some who don't.   For those of us who feel that we want to help those who misuse social media, Mike Brown, posted a blog with what he called the he world’s simplest social media policy. Now Mike was writing for business but I think his idea could also be promoted as a personal policy and could be passed on to those you know and like/love that are misusing social media.

Behold the world’s simplest social media policy:
“Will what you’re about to share online offend, surprise, or shock your

• Spouse
• Mother
• Employer (current or future)
• Clients (current or future)
• Business partners (current or future)
• Coworkers
• Children

in a way which critically jeopardizes your relationship? If you answer even one “Yes” for this short list of people, think long and hard before publishing your content.”
What do you think?
Please feel free to edit it as you like.
If you think that someone you know could use the above advice, pass the message on to them.

Boomers/Seniors and the Net

Eric Zorn in his blog, Change of Subject, of Sept 3, refers to Aylin Zafars article where she discusses the increasing use of Social Media.

 

 

From Aylin Zafar's Atlantic article, "Facebook for Centenarians: Senior Citizens Learn Social Media."

More than just a tool or channel for information, the Internet (and social networking, more specifically) has become a way for aging adults to connect to their loved ones and maintain their communities and relationships in ways more powerful than anything they ever imagined.....

An upcoming study to be published by Dr. Shelia Cotten, a sociologist and Associate Professor from the University of Alabama, Birmingham, reveals that Internet use was associated with a 30 percent decrease in depressive symptoms among older adults who used it regularly, while other studies have shown similarly impressive results.

The 74-plus demographic is the fastest growing demographic among social networks, according to the Pew Research Center's Internet & American Life Project, and social networking among Internet users ages 65 and older grew 100 percent between April 2009 and May 2010, jumping from 13 percent to 26 percent. Facebook, Twitter, and Skype all show the most growth in the older adult demographic and with 39 million people currently aged 65 and older -- and an estimated 55 million by 2020 -- social networks are sure to continue to see a surge in their older base

Social networking is proving to be not just a way to exercise the mind, but a way to lift spirits and boost morale. But in order for older adults to get the full benefits of these platforms, companies need to understand the way in which older adults engage with these sites. Without making some accommodations to the specific needs of older adults, tech giants could be missing a huge market.

"Facebook, even Gmail -- it's ridiculous that they haven't created easier user interfaces," says Cotten, who is planning on writing a Google grant that would help developers understand the specific aspects of the user interface that prove problematic for older adults. "There are a lot of small, niche companies out there who are [catering to older adults' needs]. They're creating their own very basic email services, social networking sites, etc., with easier-to-use interfaces. Generations Online is one of those companies that have done that."

Generations Online simplifies the Internet for older adults, creating easy-to-use, intuitive interfaces for services like email and general Web surfing. In effect, they live up to their motto of being "devoted to Internet literacy and access for the paper generation;" emails take on the visual appearance of postcards, while Outlook address books transform into rolodexes, helping users cross the digital divide.

Judging from the feedback of older users about the impact of social networking and its benefits on the morale and mental health of seniors, you'd think that companies like Facebook would be considering interfaces that would be better suited for the senior experience.

Older adults and younger users use Facebook differently; younger users use the service as a celebration of self, a place to post about their life, their friends, pictures, updates, check-ins, says Coughlin. The 50-plus group uses it to connect with new people with similar interests, to seek out information about health care, caregiving, and find communities to belong to, in addition to the pleasure gained from seeing photos of family and friends.

For the rest of the post go here