The Wealthy Barber Podcast - #11 — Robb Engen: Navigating Retirement and Advice-Only Financial Planning

Episode Date: March 10, 2025

Our guest this episode is Robb Engen—creator of the Canadian personal finance blog “Boomer & Echo” and advice-only financial planner based in Lethbridge, AB. In this podcast, Dave and Robb discuss navigating retirement and the world of advice-only financial planning—what it is, why it’s not as common in Canada and Robb’s unconventional career path in finance. Much of the conversation has Robb sharing his expertise on retirement planning, covering everything from when to take your CPP to safe withdrawal rates to planning for big expenses and much more. Whether you’re nearing retirement or just curious about fee-only financial planning, this episode is packed with insights you won’t want to miss! Show Notes  (00:00:00) Intro & Disclaimer (00:00:55) Intro to Robb Engen (00:06:39) What is Advice-Only Financial Planning (00:12:26)  What Type of Clients Are Best for Advice-Only Planning (00:17:09)  Why Isn't Advice-Only Planning More Popular in Canada (00:19:17) Upsizing in Retirement (00:21:04)  When Should You Take Your CPP? (00:25:11) Spending in Retirement (00:29:29) ​​ All-in-One ETFs (00:30:56) Robo-Advisors Turning Into Speculative Investment Platforms (00:35:01)  Safe Withdrawal Rates in Retirement (00:37:47)  Planning for Large One-Time Expenses in Retirement (00:42:57)  Giving Kids Money for a Down Payment (00:44:02)  Housing Prices Are Unfair For The Younger Generation (00:45:49) Postnups (00:46:55)  Options for Accessing Your Home Equity in Retirement (00:50:43)  Giving Money Away if You Have Enough for Retirement (00:53:58) Life Insurance (00:55:43) Grandparents Helping to Fund RESPs (00:57:28) Robb’s Big Three Takeaways (00:59:51)  You Just Retired… Now What? (01:02:40)  Dave's Dad's "Solution" to Financial Planning (01:03:46) Die With Zero (01:04:48) Conclusion

Hey, it's Dave Chilton, the wealthy barber and former dragon on Dragon's Den. Welcome to the Wealthy Barber Podcast, where we'll be hosting some of the top minds in the world of personal finance. Yes, that's to balance me out. The podcast is about making the subject not just easy to understand, but dare I say, even fun, honest. Whether you're trying to fund your retirement, figure out how to build a down payment, save for your kids' education, manage debts,

whatever, we'll be here to help you do it. Before we jump in, a quick but important note, nothing we discuss here should be taken as investment advice. We don't know you and your personal financial situation, so we're not here to tell you where specifically to put your investment dollars. We're here to educate, get you thinking, and we hope entertain. But please do your own research and or consult with your financial advisor before taking any action. Hey, it's Dave Chilton,

the wealthy barber back with the wealthy barber podcast episode 11. Can't believe how quickly they're going by. We had Arlene Dickinson on the last one and today we have Rob Enggen. Rob, tough to follow up Arlene. She's pretty sharp. Tough to follow Arlene, Ben Felix, Preet Banerjee. You've had all the heavy hitters. Yeah, we've had a lot of good guests so far. No pressure whatsoever. I mean, none. None at all. I'm actually quite excited about having you on for a lot of reasons. I mean, you're a very competent communicator. You're very knowledgeable but also you're in a space in the industry that doesn't get much attention. You're a very competent communicator. You're very knowledgeable, but also you're in a space in the industry that doesn't get much attention.

You're a fee only financial planner. We'll talk more about that in a moment and how people can take advantage of that space, et cetera. But I wanna start with a little bit about your background because it's unusual. You didn't come into this field in the normal way at all. You started out, I think, raising money for post-secondary institution

and then got fascinated by the world of finance. Just walk us through all that. Yeah highly unusual. I don't recommend this path to go into the finance industry at all but really started as a hobby and just learning as much as I can about personal finance. My own situation was changing with you know changing careers and we just started a family and you know just kind of learn about the world of RESPs and pensions and that sort of thing. And, uh, started reading a lot of personal finance blogs. So like I'll be able to shout out to like million dollar journey.

That was one of my favorites to kind of pour through the archives there. And, you know, after a few months of really, you know, reading up on these blogs, you know, I always enjoyed writing. I thought it was a pretty, pretty good communicator, pretty good writer. Um, and so I decided to start my own blog and just really document my own journey and, you know, mistakes I've made or lessons I've learned along the way. And it's just sort of grown from there. I got contacted by an editor at the Toronto Star and then started writing a bi-weekly column over there and did that for like eight years and that started growing my subscription

Base and I've got like 10,000 subscribers now that are you know, still reading the blog in 2025 Which is surprising and it is but you have two hundred and fifty thousand visitors a month To your site to look at past blogs etc I mean by Canadian standards Twitter your two thousand a month is huge, good for you, and you're also being humble. You're a very good writer. And I think one of the things that comes through is you're a very authentic guy. And when you first started writing,

you didn't try to be, I know it all, and this is the way it has to be done. You were, again, on your journey of learning and then passing those learnings on. Did it help you to get feedback from the blog readers and you were able to learn what they didn't know and incorporate their questions into the next blog etc? Yeah so helpful and I learned a lot and took all that feedback in and that was a big kind of humbling experience to

you know put my writing out there and then have someone critique it and say well actually you know you only have this very narrow viewpoint based on your own lived experience. Well, here's how it actually is. There's a whole breadth of unique experiences out there. It's not just mine. And that I've learned a lot from my readers and from other bloggers and communicators just about that, not painting everything with one brush. And my own experience is just my experience. Other people have a lot of different experiences with money and psychology and all that and so that's just you know grown and enhanced my writing and communicating over the years. Yeah I love reading the comments section under blogs in general. You know the back

and forth if the writer is actively involved and people are getting in touch with her or getting in touch with him you can learn a tremendous amount from those. And your point there's so many subtle nuances with all this. We can give basic advice. I find that very challenging in the two and three minute videos we're putting out is that you can't really cover off the exceptions,

the subtle nuances, the what ifs. And that frustrates me to some extent. Yeah, that's why I ended up starting the advice only planning side of the business was because I was starting to get more and more questions about, well, you wrote about this, your experience with this, or about this general RSP versus TFSA comparison, but what about me in my unique situation? And meanwhile, they write about three lines. I have no idea. It really depends on all these other factors. And so that led me to wanting

to dive deeper into people's complete picture so that it could give more tailored advice. Well, to that end, I find that part so that it could give more tailored advice. Well to that end, I find that part of your career movement even more fascinating. I mean there are a number of people who've kind of come out of nowhere. They're smart people like you and a good communicator and they've gone on this journey and readers have come along with them. But not that many people take the next step you took, which is to change careers and jump over to the fee only financial planning field.

What did your spouse think of that very bold move? Was she fully supportive? Not at first, but... Good honest answer. Leaving a pretty steady public sector job with a pension, with a mortgage and two young kids, yeah, it was probably like, are you crazy? Basically something you would advise your readers not to do.

Yeah, exactly. You decided to do it. But I started the advice only planning as a bit of a money coaching on the side while I was still working a full-time job and got enough momentum that I figured I could, if I was spending 10, 15 hours a week doing this, if I could dedicate a good 40 hours a week to it,

I can really make things work and it worked out really well. And I made that transition at the end of 2019. So I quit my job, um, plan to start this full time and dedicate, you know, all the time to advice, only planning and doing more writing and, you know, and doing a lot of traveling, right. And so then the world shut down three months later and the blessing there was that everyone got used to Zoom, right? So now I'm working with clients all across the country and they're much more comfortable in that environment. I can count on, you know, one, maybe two hands on how many

local clients I've ever had. They're all in Toronto, Vancouver, Calgary, Edmonton. Now you're using the expression advice only planning. Often people say fee only planning. I like your expression a lot better in that it spells out to me that you're not selling a product, you're not associated with that type of thing and you're just giving advice. Why doesn't the industry picked up on that? It makes sense to me. Yeah, I don't know if I'm going to get in trouble with this, but I think we used to call ourselves fee only planners, right?

You pay a fee, you get advice and a financial plan. And I think a lot of fee based advisors who are, you know, charging a fee, you get advice and a financial plan. And I think a lot of fee-based advisors who are charging a percentage, but not commission-based, were kind of co-opting that term a little bit. And so they say, well, I am also a fee-only planner, but really they're managing your money. And I wanted to differentiate to say, I think it's important to separate advice from product sales. And I think it's important to separate planning from just investment management as a whole. That's my version of advice only planning. And so I like that term a lot better.

I did too. I know I did too, because you're right, the industry kind of took it not in a horrible way. They just took it because it describes what they're doing. But it's a little blurry. The difference between the two. Tell us more about what you do, because let be honest in Canada advice only planners are not a well-known group Of people in the field so walk us through what you do why it has some advantages for the consumer

Are there any disadvantages that you can see so I think you know predominantly Canadians are going to their their banks. That's the primary advice channel. And I know like Preet Banerjee has talked a lot about this on your, on your podcast before. And so, you know, that that's fine, right? If you can, you can go in there and you get established with some, some early savings and, you know, automate your savings and pay yourself first, right? And all that good stuff.

Uh, great, you know, but you are paying a fee to do that. You know, roughly around 2% is getting charged through the mutual funds that they sell, which is, you know, it's a high fee, right? We pay some of the highest fees in the world. But are you also getting advice with that? Right? You are supposed to be getting advice with that. And if all you're getting is maybe a phone call once a year at RSP season, then I think that, you know, you're overpaying for advice call once a year at RRSP season, then I think that you're overpaying for advice quite frankly. Where the advice only planning comes into play is that I can help you make financial decisions. I can lay out a financial plan, not just using the TFSA and

RRSP that you have at the bank, but looking at your entire picture including your government benefits and how all those puzzle pieces are going to fit together in retirement, your pension if you had one, and to really give you more holistic, comprehensive advice. So I work with clients for like an entire year and put together kind of a current situation and map out their future goals. And then just, the numbers are going to tell me a story about what's possible can you achieve these goals are you trying to bite off too much where are some things that you can optimize and take advantage of what are some red flags to consider and things like that and I think people really are craving

that because they're not getting this kind of advice at the bank on the flip side there are really good advisors out there you've had them on the podcast before you know the PWL group fantastic right but typically those good advisors out there. You've had them on the podcast before, the PWL group. Fantastic, right? But typically those good advisors, they're not tripping over themselves to find clients with a couple hundred thousand dollars of funds, right? So where I try to come in is this, I call it this niche is like regular Canadians with regular problems. And really try to serve that market that is either fledgling kind of doing it themselves and maybe making mistakes or they're still in that kind of bank no advice paying too much in fees situation. And so they pay you a flat fee

for doing this and how do they get updates? I mean as things change their lives they get married, they get divorced, they have a third child, whatever. Do you get in touch with them once a year and kind of look at major changes and see where the projections are relative to reality, etc.? Yeah, so I'm with my clients for a year and I always tell them you know it's a living breathing document. The plan that you get is going to be out of date in a week, you know, if something changes. And so really we're looking for trends, we're looking at the trajectory and to make sure that you know you're on the right

track and you're putting your money in the right places. But certainly, they could reach out, they've got a link to my calendar to book a call with me if something's changed in their life and we need to do an update to the plan. So I'm there with you for a year. And how my model works is that typically, maybe 85% of the time, it's a one-year engagement and then off they go. Right? So they kind of got that trajectory that, you know, maybe simplified some things, automated some things. And if life isn't going to change all that much over the next three to five years, off you go and you save the fees. Maybe you're investing in some low-cost index funds and, you know, that's a pretty good recipe for good financial outcomes. Sometimes there's just more moving parts in the plan.

It's going to take longer than a year to fully implement, or there's some forks in the road that you just don't know the answer yet. And so I offer a retainer where you can buy another year of service for just half of the initial fee. And then that way you've got that continuity as things change until we get some known numbers to really update that plan and give you a good roadmap going forward

The key thing is this is more holistic and that you're not just doing the investment planning. You're doing a state planning You're doing tax planning. You're doing insurance planning. It's the whole shebang the whole aspect of financial planning which you know surprises a lot of people because most people want to talk about investments right and so, you know if I kind of lean on what we kind of think about now with the evidence to say, look, investing's largely been solved with low cost index funds, and there's some great products that allow you to do that, do that. And then let's move on to the more important things, which are about your financial goals and how to best allocate your dollars. Yeah for sure and so

what's the hot spot for you for a client like somebody with $10,000 is probably not coming in yet because the fee is going to eat away too big a percentage of the asset. What's the level that you start getting interest from the clients and what about demographics on the age front? Do they tend to be in their 40s and 50s a lot? Yeah so you know I'm telling on myself with my blog title which is Boomer and Echo and so it skews pretty old. So a lot of boomers retiring every year and I would say the my audience predominantly is in the kind of 50, 55 plus and so those are the ones reaching out primarily and I think that makes sense right? If you're

it does one if you're reading a blog, you have some interest in personal finance, right? And you're probably a good saver already. Retirement is another beast though, right? When you go from earning one paycheck to now multiple streams of income. And I talked about the puzzle pieces. How do you fit all these puzzle pieces together, whether that's from a workplace pension, your RSP, maybe a lira from an old job, you've got your TFSA, then you've got your government benefits

to consider as well. You know, you need some guidance to help put that together. And maybe some part-time income too. Exactly. Yeah, so there's an age difference with your partner too, and so you're trying to figure out how that all fits in, if you're going to retire together or We're a little bit staggered. So like there's lots to consider. So that is the primary sort of target market is the Kind of that 55 to 60 maybe three to five years away from retirement. I certainly work with younger younger folks, but um You know not the not you know, 20 somethings with you know, just starting out with ten thousand dollars to their name You said all that very well and I'm often asked why didn't I write the wealthy barber for retirees the retiring barber? And I've often said it's because you can't I can't give that generic advice

Chapter by chapter about how to do things because everybody's situation is just different enough There's all those moving parts and the book would have to be this thick for me to be able to get through them all. They need individual plans at that point. I could write a book, but it wouldn't take that structure. And so I think you're bang on with what you're saying. And you're right, you mentioned the difference in ages now between some spouses is much more significant. You've got blended families,

you've got second and third spouses, all of these things come into play as you go forward. So I couldn't agree more. So you're working with that group. How do you set your fees? Do you have a flat fee no matter what their situation is or is it based on the complexity of the situation, the number of moving parts? How do you do that? So a number of advice-only planners do price sort of, they'll quote you based on level of complexity. But I try to weed out the complex clients, right? If you've got a professional corp or accounts

in the Cayman Islands, I wanna work with regular Canadians with regular problems who I think fit a certain profile that's gonna take me X amount of hours to put together a comprehensive plan, and so I just do a flat price, right? This is for a regular Canadian, regular problems, here's a price for a single, here's a price for a couple. That's what you get. And do you tend to deal with a lot of couples

and do both spouses get actively involved? Yeah, it's interesting, right? Pretty often it's one spouse sort of driving the bus, the chief financial officer who really wants to get a handle on things. But I really encourage you both to participate and I wanna meet you where you are. If you want to nerd out in the spreadsheet or talk about ETFs or talk about the best tax-efficient withdrawal strategies, cool, I can do that. But if you just want some plain

language advice on, you know, I want to make sure I'm fully utilizing my employer match and can we actually retire at age 60? 60. Great okay I'm going to move on and get on with my hobbies. So you know I encourage both to get involved but you know it's going to be different levels for different people. That's all very interesting stuff. Now do you ever worry about implementation? So they come in and they get the plan from you and you tell them the best things they could be doing but how do you make sure they actually walk out that door or in this case get off that zoom call and go and do those things? Right like you can lead a horse to water but you can't make them drink and that is a big drawback

of advice only planning is like even I can share a screen with you and and kind of point you to the direct in the right direction point you to the evidence on why you should be doing a certain thing and here's how it fits into your plan but I can't click the buttons for you. I can't make you walk into that bank branch. I can't do those things for you. You have to take the responsibility to do it. So that's right in my engagement letter,

just to say, look, you're getting advice. I'm going to give you the best advice I can for your situation, but it is up to you. The onus is on you to go and implement this. So that's tricky. It is one of the frustrating aspects of the model but you're giving unbiased advice you're not selling a product why has this part of the industry not taken off more in Canada we see more of it in the US more even per capita in the US why don't we see many Rob's out there in Canada I

think from an advice giver perspective it's not as lucrative, right? So I can't scale this at all because, you know, your situation is your situation and I've got to spend the 8, 10, 12 hours with you over the course of the year that we're together and put together your plan. And I can't scale that, right? So, you know, all I can do is, you know, increase my fees, but I can only do that, right? So, you know, all I can do is, you know, increase my fees, but I can only do that, you know, so, so much and burn out really if I'm going to take on too many clients, right? And then the level of service will drop off.

So, so I think from a service, you know, advice giver perspective or the advisor perspective, it's not as lucrative. And so that's, so there's not as many of us, okay? But I think the demand is there. And I think if more people would- I can tell you from my office, I get called all the time.

People saying, do you know an advice only planner whom you can recommend? And I used to know a few, but they got old, because I'm old. And so they got old and retired. But a lot of people are looking for that. And to your point, they're looking at it at age 50 to 60. And a lot of it, I mean,

I'm normally very positive and upbeat, I I am but we have to be blunt here many people in the industry are doing a horrible job helping their clients with retirement planning figuring out where best to draw the income from some of the most tax-efficient basis front a lot of people aren't providing that pivotal service and it's on the if you look at it incentives right you know the incentive is accumulate accumulate accumulate, accumulate, absolutely, because I'm, you know, I'm, I'm compensated by that asset under management model.

And, you know, not to say it's all nefarious or anything like that, but, you know, there is no incentive to say, here's a really good decumulation plan and let's start significantly melting down your RSP. Let's delay CPP and OAS, right? That's, that's going to cost, going to cost the advisor or their firm money. And frankly, it's just time consuming, right? It's time consuming to put together a plan and spend that time rather than to talk about investment

management. Are you using a lot of software? Yeah, so I use Canadian personal finance or financial planning software to kind of build out that model and that projection. You do some scenario planning with my clients to see, help them make decisions about whether they should downsize or upsize or whatever they want to do in retirement. Upsize, it's strangely, I actually see some of that in the last 10 years where people

have moved to bigger homes. I was telling an economist from one of the major banks once that I had met people who had moved up because they wanted a swimming pool for their grandkids to come over to. And that's real life stuff as opposed to books when we're always seeing everybody down sizes later in life. I've seen in one of your articles,

you've talked about how people are trying to sell their house later and later and age in place more and more. Absolutely seeing that trend. In fact, you know, a lot of people don't wanna leave ever if they can possibly afford to stay there. And so it's interesting all of these trends that we're seeing pick up and you're seeing them and you're writing about them a lot. But there's always so many exceptions that that's why a person like you is needed.

Yeah, and and a lot of the you know media, you know, our news articles come out is very Toronto Vancouver centric, right? Where you know, then you do talk about downsizing because you might be in a $2 million house and you want to capture some of that home equity to downsize, but also to kind of boost up your retirement spending. But I, you know, I grew up in Calgary and I lived down in Lethbridge. Well, guess what?

Retirees don't want to retire in the cold frigid winters that we have, they want to move out to BC, right? And so like, you know, Kelowna and Vancouver would be like, you know, Albertans equivalent of going, going to Florida. Right? And so, uh, so he is an upsize because the housing market is not meant not necessarily a bigger, it's not necessarily a bigger house, but just a more, that's a more expensive market. No, absolutely true.

Okay. Let's start going through some interesting topics as CPP. Uh, you know, my argument very similar to yours, and I think almost all of us look to the math carefully, is most people, not everybody, should be trying to defer and take it later in the game for a lot of reasons. What are the reasons, number one, do you agree with that first off, and then what are the reasons you think most people should delay until age 70 if possible? Yeah, I think there's a multitude of reasons. So I do agree with that in

general. I think you know you get a big boost in your income, your lifetime income, and I think we're moving away from the term like break-even age, like you know how long do I have to live for this to work out? No, it's like a lifetime loss of income of maybe like a hundred thousand000 if you don't delay your CPP. And so more income, more income later in life, when you want things to be simple, just that paycheck is landing in your checking account every month. I don't have to manage a portfolio, make a withdrawal,

do anything like that. It's just coming in. Second is the inflation adjustment. So not only is that enhancement 8.4% a year. Every year you delay past 65%, but it's plus the inflation adjustment. So those really came through over the last few years when inflation was higher. You're getting 6.5% and then 4.8%. You're getting big increases in your benefits. And that's cumulative. So that's going to go on and continue.

So that's a good thing. and just what people are living longer and I feel like we're not good at um thinking about our own you know longevity and mortality right I want to spend the money now and so I have to be really careful with how I communicate this to my clients is that no one is telling you to not live your best life and spend money in your early retirement years. We're just telling you to get the money from somewhere else like your RSP while you delay this enhanced inflation protected paid-for-life benefit. That's it. I mean I think we have to do a better job of teaching people it's not that they're giving up the money they're investing it. Yes. They're letting it grow in essence,

and therefore come out more, come out bigger monthly payments down the road. And to your point, they're getting the money from somewhere else in the short run, because that's what makes the most mathematical sense. To go back to your point about longevity risk, I think that's one of the bigger ones,

especially with what we're seeing in biotechnology and AI now, I have a feeling we're gonna have all kinds of breakthroughs on the longevity front in the next five to 10 years and you could have a whole bunch of us living to be 100, 105, 110 and you want to take some of their risk off the table by waiting. But what are the flip side reasons for why you would take it at 60? Yeah, so I think one is if you just don't have the money to do it. So I think Fred Vettis in his retirement income for life, he talks about that. He's a big proponent of delaying your CPP to enhance your retirement income. But he says it kind of takes about $250,000 at least of RSP or,

you know, some kind of savings to draw from to allow you to delay, right? We're not talking about, again, being, uh, depriving yourself and living really frugally in your early retirement years where you need a pot of money to draw that from and if you don't have that pot then you need to take it early and then another big one is just if you have any inkling reason to believe that you will not have a normal life expectancy right and so then take the money right take the money yeah I couldn't agree more you know I, I really think, and again, people's families' histories, obviously,

are playing a role there. But all of this aside, and you've got your voice out there, you've got a number of other prominent people saying the same things, I'm backing it up, yet the vast majority of people are taking the money as soon as they can. And some of it is- I think 1% or 2% are taking it at 7%.

Yeah, exactly. And basically people are saying, yeah, yeah, everything you say makes sense, Dave. I know you know what you're talking about, but I really don't wanna not take it and then die. And I'll feel that I never got any value out of it. One of my buddies, I think had a great philosophy, he said, you know what, I don't care about that,

because if I die, I'm dead. It's not like I'm gonna be sitting there upset that I didn't take it, I'm gone. You're not breathing. So even though I can really, I think, convince people this is the right move, that doesn't mean they're actually acting on it in the proper fashion. You run into the same thing? Yeah, it's such a such a strange transition to retirement, right? And and so I swear to you half my job is trying to convince my retired clients to spend more money and

and just think about the different these types of decisions a little bit differently. And so, yeah, it's a puzzle, right? So there's a research that's come out that says retirees are more likely to spend, but twice as much they'll spend if they're getting guaranteed income streams from pension or annuity than they would from drawing the equivalent amount from their own savings, that reluctant to spend, to tap into their own savings that were reluctant to, to spend a tap into their own investments. And I think that makes sense. If you've been a good saver all of your life, it is really difficult to, to turn off the savings taps, turn on the spending taps, right? Cause that happens immediately. You retire the next year, you're withdrawing and

you might've just put in that RSP contribution, just put in that TFSA contribution. And now you're taking it out. It goes against all of our intuition. Yeah, so that's something I come across against is just trying to encourage my clients to spend a little bit more up to their capacity. It's a big problem, I think. You know, obviously there are people who haven't saved enough, right? But the type of clients I'm working with tend to be pretty good savers, tend to be pretty conservative, tend to be pretty anxious about markets. Yeah, and so they're worried, right?

They're worried about longevity and they're worried about all this, yet they don't, they're not as receptive to the advice to say, well, then delay CPP, delay your old age security. Makes no sense. Makes sense. But I see the same thing. Annuitize maybe at 70 or 75, take a chunk of money and buy an annuity right and build in some of that longevity protection it's going to encourage you to spend more it's gonna be landing in your in your account and They're just so reluctant to do it

Right and people are happier to all the research has said when they have an annuity or they have that regular income coming in from a pension Etc. It makes a very big difference to their disposition in retirement, it takes some of that fear away. This is why I've always joked to people, you don't have to choose your government, your job to gain access to a government pension, but you should choose your spouse for that reason. Okay, somehow, some way, get that to be a part of your family.

But they're all marrying each other now. The teachers are all marrying the teachers, and so they're doubling up, which is a very wise move. I support that fully. No, I see all of the teachers and so they're doubling up which is a very wise move. I support that fully. No, I see all of the same types of things and like you, I see a lot of people in retirement who probably aren't spending enough but again, it varies from person to person dramatically. One of the fears that a lot of the sharper people have is sequence of returns. They figured out that even though they believe in the markets long term, many have benefited

from the last 20, 30, 40 years of strong market returns. If they have a lot in equities right now and they get hit with a major pullback while they're withdrawing 3, 4% a year, they can be in trouble. Therefore, they're going with more conservative investments almost across the board. And therefore, by extension, spending a little bit less. Do you see the same type of thing? Yeah, it really depends on the market, right? So we've been in a pretty good bearable bull market, I should say, for quite a few years, you know, 2022 aside. And so when people are seeing returns of, you know, 18, 20, 25%, it's, you know, they're wanting to take more risk, they're wanting to invest more money, but on the flip side, not withdraw the money, right? Because they're getting, they're getting such a good return. So it's also dependent on what's happening in the market with their temperament, with their risk tolerance. And so that's again, why I try to, I use really conservative assumptions, right? I assume you live a nice, long, healthy life. I'm going to assume spending rises with inflation all the way till you're

95 years old, even though it might not. And I'll use very conservative investment returns, and they still want to underspend to you know their projections or their capacity. What kind of returns do you use as an assumption for say the equity portion? I know it might be split between Canada states but do you think 5-6% to be ultra conservative or do you go 7-7-8? No I do 6% so like a 4% real rate of return above inflation and I think historically it's been about five, right? But I tell my clients that, you know, historically this has been about five.

I wouldn't quibble if we use seven, but this is your plan. I want to be, you know, a bit conservative. Five is not a guarantee, right? It's just what happened in the past. And then the other reason just frankly today is that stock prices are really high, particularly in the US. So we should probably dial back our expectations for future returns. I think that's probably a better basis to go off of. Are you buying into kind of the one-stop shops of the ETFs that have the global exposure

and the low expense ratios of let's say 20 to 25 basis points? Is that a product you recommend for your clients a lot? Yeah big time. So I think these all in one ETF are a complete game changer for your clients a lot. Yeah, big time. So the, I think these all in one ETFs are a complete game changer for doing yourself investors, right? You had Dan Bordelotti on and I followed Dan since the beginning, Canadian Couch Potato. Um, and he was putting out model portfolios that had 10, 11, 12 different ETFs. And, uh, it would be, I read the comments, there is a nightmare to manage, right?

How do you have to add 5,000 to this one? And especially to rebalance. Exactly. That's the problem. it is a nightmare to manage right? How do you have to add 5,000 to this one and well, especially to rebalance Exactly. That's the problem. It's a complete nightmare So I think what people need to understand is these all-in-one ETFs are it's a bit of an illusion It's seven ETFs or eight ETFs underneath the hood and they just found a way to neatly wrap them up into one Self-rebalancing fund so you don't have to look at the individual parts You don't have to figure out which ones to tinker with and, and add to, or sell. Uh, it's done all for you.

And so it has really changed my advice around do it yourself. Investing used to be really cautious on this, just to say, you got to be really careful, you know, building your own portfolio of a bunch of different ETFs. Like you got to really know what you're doing and, and you're going to be watching it a lot. So you're probably better off with a managed solution or maybe a robo advisor. But now if you can just buy this with a single ticket solution, I think it has really opened up a world of opportunity for do it yourself investors.

The robo advisors out there in Canada and the States who've charged, let's say 50 basis points, a half percent to do all this, they've got to be in trouble with that part of their model because again, you can do it much less expensively using these products now and easily. 50 basis points, a half percent to do all this, they've got to be in trouble with that part of their model. Because again, you can do it much less expensively using these products now and easily. Yeah. I mean, it kind of made the robo advisor service redundant when you can buy the exact same portfolio in an ETF for quite a bit cheaper. Right. And so that's when they're, you know, branching out into other offerings and things like that, because they've got to do, they've got to change up their delivery model. But it makes me laugh because a lot of the robo advisors now, the product offerings to help you with margin accounts and crypto trading, they're all against what they originally came out to be. I mean, they would all give these speeches about we're trying to help the average investor

drop costs. You can't beat the market. You've got to focus long term because that didn't earn the profits they were hoping it would. Now all of a sudden we've had this shift over to craziness and it's crypto and it's margin and now you can buy stocks with nothing down. They're trying to put that through and I just shake my head at the whole thing. Yeah it's crazy and so they probably saw you know what's happening with like Robinhood down in the states and absolutely decided to bring some of that more speculative options trading in crypto and whatnot. I mean, that's where the money is. So it's unfortunate.

So I say, I use one of those platforms, Steven. So I say, look, you've got to be an emotionless robot when you go in here, right? You buy your one ticket ETF, it's free to buy. So that's great. Take advantage of some of the perks they're offering you. Maybe a higher interest rate on your savings and you get some airport lounge passes and a free global mail subscription. Great, right? And then absolutely ignore the barrage of emails that you're going to get about the new private credit and crypto trading and options trading and margin and all that. Turn it off and you're gonna be better off for it.

We're in 100% agreement there, like 100%. I mean, that stuff just makes me shake my head. And I've said on past videos, I can't believe how many young men, men in their kind of 20 to 35 are going onto these sites, the amount of money they're losing. I'm not talking about losing a thousand and $2,000 of their $30,000 TFSA,

I'm talking about many instances losing 26,000 of their $30,000 T and the opportunity costs there. Well, as the wealthy barber makes me literally pull my hair out. Interesting. And I've said this on two other podcasts. I don't see young women doing it. This is very much a young man issue that we're dealing with. Some people come back to me and they say, well, it's because home prices are so

high, the cost of living is so high. They feel they have to take excessive risks to maybe get where they need to go. But when I talk to them as individuals that's not what I think is motivating them. I think it's old-fashioned gambling instinct, testosterone, it's so easy to use the sites, get caught up, they hear stories of people being successful and they're pulled in even though their own numbers are often very very unimpressive. Yeah I see that too with young men and more so now on even with, with sports gambling too, right? So it was just kind of pulling in people to, to gamble and speculate. But, uh, but Dave, I'm actually seeing this on with older clients as well. So older clients,

who retired, guess what? Uh, I'm bored. I'm at home all day. I'm going to start day trading and making some money. And then the worst thing that could happen is you actually make a bit of money. You get some success. You think you're good at this and this is my new job now. And instead of going out golfing and you're sitting at the computer all day. Right. And that's no way to spend your retirement and you're probably going to blow

yourself like blow up your portfolio. So I've seen some really bad stories there with margin, line the credit and really, really doing some damage. And at least for the young men, you'll learn a lesson, right? Like even back when in my university days would have been the dot com era and students were putting their student loan money into trading accounts and buying stuff. And then they kind of laugh and when they lost it all eventually, but at least you recover from that.

Right? Absolutely. Because you have a whole work life ahead of you. When you're 60 years old, 65 years old, there's no going back when you just completely blow up your RSP or your TFSA. No, it's very true and it is quite concerning. Okay, let's go to withdrawal rates. So I've got X amount of money and I want to start drawing down from it. Obviously every situation is a

little different, but in general what withdrawal rate are you comfortable having your clients take on? So I get this question a lot but I find it's a little more new and the answer is a bit more nuanced to that. Remember I talked about the puzzle pieces right? So maybe I'm shifting CPP and OAS out of the way. I might have a really aggressive withdrawal rate out of the RSP, but only for a short period of time. Absolutely. Just to allow for that to happen, to allow the CPP to kind of cook in the oven a little bit and give you that enhancement. So that withdrawal rate could be 7, 8% maybe for a couple of years. But then there's other buckets, right? This is what drives me nuts

about the 4% rule or any kind of these spending withdrawal rules is that there's not one pot of money called retirement savings. There's an RSP, there's a TFSA, there might be some non-registered money, there might be some pension income and your government benefits. And it's the way they all interplay. They all have different tax treatments, some you can split with your spouse, but at certain ages, right? So I just don't believe in that there's one withdrawal rate that we can say, let's do this and it'll last you for 30 years, right?

It's going to be- That was a Dave Chilton answer. Right, it's sort of- No, it was, because that's exactly what I say when people ask me and it goes back to what I said earlier. That's why I can't write the retiring barber. Because you'd have to show so many different scenarios that affected different withdrawal rates to your point for

different items RSP versus etc that the book would become too convoluted like it just wouldn't work in the conversational format so I love that answer now let's go to a hypothetical world though the money is all in one magical pot and do you feel comfortable if someone was in that unique situation then withdrawing three to four percent a year? You certainly wouldn't advocate for five to six as I've seen some people in the states do because then again you get the sequence Of returns issue jumping up and it could really bite somebody Yeah, that's really tricky and I think it's something it needs to be evaluated every year So when you look at these more dynamic strategies where I don't think it's

Sensible to set a withdrawal rate and adjust it with inflation. You're an ignore everything that's going on around you. Right. If you get a horrible market in the first year, guess what? You got to go back to the drawing board and start. Right. So again, I just say it's not, it's not, uh, it's not sensible or practical to kind of come up with that number that I think the number is, you know, probably four or three and a half percent, right? But it's so nuanced and you cannot just kind of

blindly follow something for 30 years and hope it turns out okay. Because the flip side could happen too, right? Where you get off to a great start, you could take on more. Exactly. Right. And so, you know, we want to be cautious, but we also don't want to be overly so we're, you know, we're not living our best life in, especially early retirement. Now this is a question I think you probably knew was coming for me and I was quite excited to ask it because you're on the front line you're dealing with an age group that I'm seeing help their kids out a lot right now to buy homes. Are you seeing that a lot and do you think some of them are being too aggressive in the monies they're giving

to help the kids out with down payments that they're jeopardizing their own retirement to some extent? Yeah I think this needs needs to parents want to help and they want to help as soon as possible and I think it just needs to happen a little bit later. So I just wrote an article on this to say you know there's a time to be selfish with your retirement savings and that's probably right away in your 60s when sequence of returns is problematic. When you probably want to be having your bucket list trip and maybe doing some remodeling in the house and maybe buying a new vehicle. You've got to really watch what you're doing. And because you might want to delay your CPP and OAS, you're withdrawing from your own

savings. And so things might be a little more precarious for a few years. That's not the time to be handing out 50,000, 100,000 or more to your kids to buy a house when they're in their 20s. Right? So if you can maybe help with like, you know, FHSE funding, right, you know, something more modest in the, you know, $8,000 a year range let them get some experience with investing and kind of getting off to you know, getting launched and once your benefits have kicked in and you're in your late 60s early 70s then That's probably a better time to to look at doing something bigger Is this something you would use the software for where you can say letter if you're giving each of your two kids 110,000

We're gonna take that 220 right out of wherever and we're going to show you the ripple impact of that going forward. Yeah, the neat thing about my software is in all retirement planning software really is that we always focus on the spending, right? Can I spend 60,000, 80,000, 100,000? But life doesn't move in a straight line.

We've got to weave in these things. So I would say there's like four big one-time expenses that are going to happen throughout retirement. So we've got a vehicle replacement, right? You can drive the same vehicle for 30 years. We've got some home renovations or repairs, frankly. We've got your own sort of bucket list travel experiences that are outside of what you normally like to do. And then there's the help for your kids financially. And so we weave those in where you could see the timing out of them, right?

If you're trying to do all of this in this pocket of time before your government benefits kick in, boy, you're really gonna deplete all of your savings and it's gonna potentially put you in a bind. And so we look at staggering them, right? And again, I always say numbers tell a story and when we're trying to do too much in here with too little of resources,

there's red flags galore going off in the software. And then I can point that out and say, well, okay, well, if we shift that a couple of years, then you know, you're in better shape. I'm thrilled to hear you bring up the home rental part of that argument, because I find dealing with a lot of older people doing this planning, they think, yeah, we'll have to get a new car at some

point they've already thought about the bucket list trips to your point and they're gonna give the kids some money but the home rental one for some reason they don't think of and yet they're they want to stay there for another 15 to 20 years in some cases maybe even longer they haven't done a rental in many instances for a long time they've got some problems and again to your point it could be just ongoing repairs, but no matter how you look at it, it can add up to a lot of money.

It has to be factored into the budget, to the spending projections. Yeah, and even throw out the whole kind of rule of thumb of like 1%, you might be in the 2, 2.5%. Right. Right, as things start aging, your appliances go, the furnace, the roof, the driveway, right? Yeah, the deck, right?

There's lots of big projects that you might have to take on. And so, yeah, the driveway, right? The deck, right? There's lots of big projects that you might have to take on. And so, yeah, you're absolutely right. You need to consider these. And this is part of the reluctance to spend, by the way, Dave, is I see not only the reluctance to spend up to their capacity on a regular basis, but I see a reluctance to fork out the big dollars for some probably much needed home repair, because they don't feel like they can do it. Right. So again, in my plans, I'm really trying to emphasize that, uh, we need to start thinking about these things and weaving them into the plan to

show you where, you know, draw the lines. Where is this going to come from? Is it from the TFSA? Uh, is it from some existing sort of pot of savings that you have? Uh, do you have to sort of forego a trip that year because you've got to take care of some stuff around the house, right? It's no different than you know working years. So you're gonna make those I like the way your process makes them think all these things through I mean that alone is an extremely healthy part of this whole thing I find a lot of people just don't do that. By the way, I'm dealing with three leaks in my house right now Yeah, you know, I've had this house for 30 years I've had one leak total, but this winter with the

bizarre amount of snow, it's overwhelmed the infrastructure of the house. And I've got three leaks and those are kind of expenses that can jump up and really annoy you and be a lot more than you anticipated for sure. Well, as Canada's worst handyman, self-professed, um, you know, this is why we have to budget in buying a brand new house every 10 or 12 years.

So this is, I just can't deal with that stuff. I'm right with you by the way. I have no, I actually have no skill in anything, whether it's music, whether it's fixing things, whether it's cooking. I'm one of the least skilled people ever put on earth. I really am. I can't believe I made it this far to tell you the truth. No. Okay. Let's go back to the lending the kids money. I just did a video on it this morning and I, I made a minor point, but I think you'll like it.

I was saying I'm seeing a lot of cases where parents will give one of their children a hundred thousand because the person needing to help but they don't necessarily have to give it to a brother or a sister or two brothers and since they're already in the market or they're doing better so they say we'll even it out in the will and they do it fine they say the first you know hundred thousand goes to each of you two and then we'll even it up there. The problem is that may not happen for 30 years that hundred thousand is worth way less than the hundred thousand the other kid got now and I think they have to do it in the will where they get a hundred thousand in two thousand and twenty five dollars.

Have you ever come across that? I have. I've done that in some plans before where I'm showing a gift at a certain age down the line and the gift's potentially pretty big and I say well yeah because you gave your other kid a hundred thousand then well it's got to be 200 you know if you're that one's not gonna happen till much later it's very interesting but you're right a lot of people don't think about that or they look you know the eyeballs bulge out and they say like I can't give two hundred fifty thousand dollars and it'll be like well that's like giving a hundred thousand dollars that you just did. This whole thing is sad it's too

bad that so many parents have had to get involved. I mean, as Preet has said, choose your parents wisely, has become such an important part of financial planning now for people in their 20s and 30s. And I'm amazed by the way, even today, we put a short video out how many people, older people, 50, 60, 70, don't realize how much tougher it is to buy a home now than it was 30 and 40 years ago,

except for that one spike in interest rates. I mean, home prices have gone up much faster than incomes. It's that simple. And even putting together the down payment, can you imagine buying a $600,000 house, you wanna put down a 20% payment, it's 120,000, saving $120,000 after tax over a two, three, seven year, that's not easy to do.

And you have the, you know, what happened with house prices running away is that you can't, you know, the house prices are rising faster than you can save up that down payment. Right. So just always playing, so it's playing catch up. And I'm seeing this a lot with the singles, right? So if I've got singles who are living in, even in, you know, even in Calgary, which is not as expensive as a Vancouver or Toronto, you know, he still,

if you want a five, $600,000 house, it is really tough as a single to make that work and not put your retirement in jeopardy. So again, that's the point I make all the time is that a lot of times you can make this work, but you can't save any money. That's kind of the trade off. And so then I say that you have to really think hard about selling the house in retirement.

Where I do a lot of plans for people where they said this earlier, age and place, it's a backstop if you have to sell it, right? That's fine. But you're not, you know, need to, right? Right. It's not going to wreck your finances. But for in a lot of these cases with singles, they're going to need to factor in maybe selling that, selling that house. So then you think, well, do I want to put all this effort into owning my house if I can only own it for 20 years? And then I've got to sell and rent again, is it going to be worth it? So all those are interesting questions. I mean going back to the giving of the money to the kids. Another thing I'm seeing a lot of now is requests for information

around post nups because the parents are coming in and saying we're going to give you a hundred and something thousand to help you with the down payment but if your marriage dissolves in the next year or two because the matrimonial home rules We're worried that the partner leaving not our child is gonna get half that money and I get asked that a lot by the way Like that's a once every few weeks question now So all of these things we didn't talk about before we didn't deal with before coming into play Are you ever hearing that question? Do you ever get any questions about? I've seen it happen. Unfortunately where there's no, you know kind of post-nup or no agreement on that money

in place because you're just assuming things are going to work out, right? Right. Yeah, it can be quite contentious. One actually where, you know, the husband ended up dying and the parents were the ones that funded a big chunk of the down payment. So now there's a big fight with, you know, the surviving spouse. So yeah, it can get pretty messy. Yeah. I did say in the video though, that asking for a post and up tends to make for a challenging holiday period.

You know, that's a tough one. Yeah. No easy answers. Okay. Let's go to one other thing. How do you handle the planning when you're using your software around homeownership? So they've got this asset, some kinds it's worth a million, million and a half,

two million, sometimes a little less. How do you put it into the plan? Like if they sell it, they have to go live somewhere. So a good part of the proceeds, you're gonna have to spin off an income to cover rent or whatever else. How do you handle all that? I mean, you've just got to talk to them

about what their hopes are. Yeah, so a couple of ways we handle that. One is just think about like, when would you, some people have a good idea of like, yeah, we'll probably live here till we're 75, 80 years old and then we'll sell. And so the plan would be to downsize. So we kind of figure out, well, what would you downs some people have a good idea of like, yep, we'll probably live here till we're 75, 80 years old and then we'll sell. Right. And so the plan would be to downsize.

So we kind of figure out, well, what would you downsize to? Then we do some future value calculations and figure out what the, what they would net out of that sale, right? And then that would get passed back into their, you know, we triggered a sale in the software to the purchase of the downsize home and then the remaining balance would go fill up their TFSAs and their other savings and then they can kind of carry on living their life. But in the sell and rent, you're exactly right. We have to factor in that they gotta live somewhere

and they're gonna have to pay. And so we just, again, try to assume, you know, what would the going rate be for something that you're gonna rent in to increase their spending accordingly. My friends downsizing efforts for the most part have sucked. Yeah. They have not downsized. So they've maybe gone to a smaller home,

but it's been so nice that it almost cost about the same as the place they're leaving. Or they go to a condo that's so fantastic that once you add in the condo fees and everything else, financially it's been awash. In fact, I've seen some of them go backward. So I'm always cautious about counting too much of the home equity value going forward

in terms of where they're gonna be accessing capital. But what are the different ways they can get at that home equity that they've built up to help them in retirement if need be? Yeah, so first I'll just say that is a great point and that's why typically in the plan, unless I'm seeing red flags, I'll say, this plan has you staying in your home

or home of equivalent value. So it's a lateral move. I think that's very smart based on my friends. They would all nod their head and say, you know, this plan has you staying in your home or home of equivalent value. So it's a lateral. I think that's very smart based on my friends. They would all nod their head and say well done Rob. Yeah. Yeah So then but then how do you access it? I think that we call this a home equity release strategy, right? So what uh, what is that? So that's a traditional downsize where you're gonna sell my home and move into a condo or townhouse and um, Yeah, and kind of pocket the difference right? Your uh, or more that we're seeing now is sort of you leave Toronto and you move out to the Maritimes or you move out outside where it's a cheaper cost of living area. And so you pocket that difference.

The other one is just a sell and rent, right? So selling your home and then you're gonna rent that condo or that townhouse or an apartment or whatever. Again, pocketing the proceeds and adding that to your, uh, to your pool of capital. Um, but you can utilize a line of credit, right? To kind of top up your savings if you already have one in place. And then more and more now we, uh, just, uh, it's just becoming more common. His, uh, is a reverse mortgage, right?

And I think, you know, it's got some stigma to it, but, uh, I think used appropriately, it's not a terrible idea if taken at an appropriate age, maybe age 75 or something like that, you know you're not going anywhere, right? I am not. I'm so stubborn. I'm not going to move out of this home. OK, well, how do you access some capital?

And that's a way to do it. Right? And it's going to eat into a bit of your estate. What about using the line of credit as a quasi reverse mortgage? Often the interest rate can be a little lower and you can manage it that way. Do you have clients do it that way? I like it better, but it needs to be in place I think before. Right ahead of time.

Ahead of time and enough. Whereas with a reverse mortgage, you know you can get a good chunk of access to a good chunk of equity whereas you know typical line of credit maybe was maybe when you started was only like fifty thousand dollars or hundred thousand dollars so it needs to be significant enough significant more you can top up here your your spending or you know use it for a renovation and things like that you must have clients that have more money than they need so they for sure don't have any issues. Do you have them give the kids some money

early because there's certain things that kids can do with the money that give them better mathematical returns than the parents can. Maximizing the FHSA is a classic example an easy one but do you see a lot of that? I mean I'm definitely running into that more and more and I say to the people help them out now plus you get the joy of seeing them benefit from it. Yeah. So a big believer in that. So first of all, I would say, you know, put on your own oxygen mask first.

So let's test out your plan and make sure that you can meet your spending needs. A lot of times I do a spending capacity check, right? So it's like you've been living your entire life at $60,000 a year or $80,000 a year. You have the capacity to spend one 20. Okay. Well, what's the likelihood you're going to do that? Like I said, the turning year, you have the capacity to spend 120. Okay. Well, what's the likelihood you're going to do that? Like I said, the turning off the savings taps and turning on the spending tax is really difficult.

It's not going to do it. I might nudge them to say yes to the vacation or, you know, if you've always stayed at a best Western, like you can afford to stay at the Four Seasons or take that business class trip, but they're not going to change who they are. Right. And so maybe they keep spending the 80 or nudge them up to 90, but they're certainly not going to spend 120. Okay, so now what can we do? So that's when the generosity factor comes into play with some early inheritances or give will you live or give with a warm hand as they say.

And yeah, it's so much more meaningful to give, let's say, $50,000 when your kid is 25, 30 years old, then $500,000 when they're already ready to retire and they get that out of your estate. So I like your also your comment about they're seeing the joy of it, right? So one thing I love to see, Dave, is it's not just money for like, we always talk about money for the house down payment, right? So yes, that's, that's a primary concern for a lot of people. But what about like actually creating more memories and time with your family, right? So I have one client who pays for their account, so they pay for the entire family. So two kids, spouses, grandkids go out to, go out to Hawaii and they take care of the flights and everything like that and that's you know not only it's selfish in a way because you're gonna create this family vacation right but also you give you reward your your kids

and grandkids with this with this time but also probably well deserve vacation when they're really going through it right so it doesn't all have to be monetary and no that's a great example I'm a huge believer in that one in fact we we do that we take my dad's money and we go on a family vacation, but we don't take my dad. So it's really a little unfair. It's a bit of a wrinkle on what you described. But it's, no, we do the exact same thing. No, I am seeing that one a lot. And you're right. You're creating memories. You're creating great joy. And I think it's more fun for a lot of the older people to travel with the kids and grandkids. And you were

talking about people moving to less expensive areas. certainly we see some of that but what holds a lot of people back is the grandkids. They don't want to move away from the grandkids and I get that totally. I'll be that way. Like I would never buy a house down south. I mean forget the US challenges right now. I wouldn't buy one anyway because when my kids have kids soon I want to be close by. So that's a tough one. Yeah, being close to the grandkids is one reason to kind of stay put or stay close But I've also seen I'm gonna move where they go, right or somewhere around there So I can be there to you know, give childcare support or just you know be in their lives

So it kind of works both ways Do you see much use for life insurance late life life insurance? Not so much to cover off the need, but because it's being used as a savings vehicle. Or are you still very much an advocate of you buy term when you need it and you invest the difference and late in life it normally doesn't play a big role? Yeah, very much the latter, right? I think you know you want to get yourself to a place of you know quote-unquote self-insurance where you have that you know if there's a specific need you know pay the capital gains on a cottage or or something like that or it's a legacy plan that was in place and and you're just gonna see it through

it's a paid-up policy otherwise I don't really and by the way again I'm seeing regular Canadians with regular problems so I don't see a lot of I've got the million dollar cottage to leave. The ultra wealthy. Yeah exactly so probably it's more than that. Even then it's interesting. I mean, I've been open-minded to all of those ideas over the years because frankly, early in my career, I got mad of insurance people being mad at me. I got tired of that.

And so I was open-minded. I always look at the math carefully. I've even taken it to University of Waterloo. I've had actuaries go through so many of the presentations, so many of the projections. I still end up coming back to term and invest the difference. Term to 100 invested in it, whatever. I see very few times, I have seen a couple where I thought it made sense to go the other route. I mean, do you not find the same thing?

Yeah, exact same thing. And term coverage is so cheap and plentiful when you're young, right? Young and healthy. It is. So there's no reason not to extend your, you know, your workplace benefits are probably not enough, not adequate, especially if you've got kids in a mortgage. But you could go and shop a private policy and pay, I don't know, 25, 30, 35 bucks a month to get, you know, pretty substantial coverage at the top up. And you buy it for 20, 25 years until you're retired and then you're done with it. And it's just basically renting it. I agree with all of that. Do you, I mean, I'm a big push.

I try to get the grandparents involved in the RESP at all. I'm not above manipulating grandparents to get involved in RESPs. It's pivotal. Yeah, absolutely. Again, that's the other, you know, if the grandparents are there to fund 2,500 bucks, right? It's a, it's a, it's a small way to help. Um, and it's much needed at that time when you're, you know, young and raising a family. For sure. I see time when you're, you know, young and raising a family. For sure. You know, I see all these articles on, you know, how to maximize your RSP or RESP by

funding, you know, do you front load the first 16,000 and then how to maximize the grant? I'm like, I'm dealing with people that are trying to put together 50 bucks a month or a hundred bucks a month. Like if the grand grandparents can come in over the top and take care of that expense so I can deal with childcare and the mortgage and and my own retirement savings like that's such a blessing. I think I I've had an advantage and you are now having it too of dealing with real people and it's why some of the times you read these books and they go holy smokes like who are they writing for because they're telling for each

other. Who's the smartest advisor out there because Because, you know, every article is like, here's how to maximize your tax savings, but you're always in the maximum, you know, marginal tax bracket and optimal compensation from your corporation, but you've got like unlimited funds. So you can of course pay yourself the most to max out your RSP and still leave money behind to invest in the corporate.

I'm like, these are not real life situations. No, I mean, look at all the people out there who have people maximize their RSP, their TFSA, their RSP and their FHSA. I don't know any people in their 20s, 30s, 40s like that. Not even people who seem to be doing quite well can handle all of that. So yeah, it's prioritizing and making all the decisions

and all of that. I'm not gonna bore you with asking you about RSPs versus TFSAs. We'll cover that off with someone else. So let's go back to the retirement planning. Give me the three biggest concerns you have as we wrap up here. What are the things you're seeing out there that you wish were a little different or that you wish people knew? Yeah so I think from an investing standpoint, you know fees are still really top of mind for a lot of people

so you have to have a really good handle on the kind of fees that you're paying. And are you getting actual retirement planning or financial planning advice to go along with it? And so I think gone are the days where we've got these stock picking, you know, investment managers. Again, if we kind of use that analogy that investing's largely been solved with index funds and providing value elsewhere, right? So that's one thing is because, you know because it's one thing when you're in your 20s and 30s and just getting

started, the stakes aren't that high when you're paying one and a half, 2%. But in retirement, you've got $500,000 or a million dollars, suddenly you're paying $20,000 a year in fees. That's your vacation. That's your help to the kids and grandkids. And so, vacation. That's your help to the kids and grandkids. And so, you know, the fees have got to be top of mind. Getting an actual plan, I think is paramount because I talked to so many people who one are in really good shape, but don't believe that they can retire. Right? So they just go, they suffer from one more year syndrome and just keep working. Right? So you need a plan to show you again, how all those puzzle pieces fit together and to show you, you know, what, uh, what's possible. And then I don't know, I think on the decision making around, you know, how much do you actually spend?

I think a lot of people that don't budget, uh, the time to come up with a budget or, or like you call it a spending summary is in the couple of years before retirement. Like what do I actually spend? Because we can follow all these rules of thumb of all spend 70% of my pre, you know, my work, my working income. It's, it's not that simple. You spend what you spend. So let's track it and, uh, and do that for, you know, good three, six months, or maybe even a year, if you really want to nail that down and then really map out some of those one-time things, right? Cause they're going to come, right?

When do we need to replace the vehicles? Yeah. When do we need to remodel or repair things in the house? Uh, what are we going to do with the kids, uh, different ages and stages for financial help if we can. Right. And so it's so critical to think about those things, you know, keep your fees, uh, low, make sure you're getting good value out of your

financial advisor and, you know, do a good job kind of putting together your needs for retirement. The other thing too, Dave, it's not financial, but like, especially on the male side, I see this is like your whole, your whole personality and identity was wrapped up in your job. And so what are you going to do? And literally what are you going to do in retirement? And if you haven't thought about this, you're gonna have a pretty miserable time twiddling your thumbs. I bet some friends really battle it. I mean they

define themselves by their job. To your point, the research supports exactly said it's more males that tend to have the trouble adjusting to retirement on that front. And especially in the winter, if they're not going south, they're not able to play golf and get out. They're really scuffling and how do they rebuild an identity now a number of them have done a very good job of going back into the workforce in a part-time way it's given them a little income but it's given them a reason to be a way to add value a way to stay involved in the community in fact sometimes it's community work it's not even for a monetary compensation i think that more people should look into that, especially with so many people retiring relatively young.

Yeah, I'm a big fan of that. And I do a lot of plans for people where I show them like, here's what your plan looks like if you never work another day after maybe age 58 or 60. Right. But then let's look at how realistic that is, right? Maybe you want to, not for financial reasons, right? Because we've already shown you that you can do it

without earning another dime, but now for a lifestyle socialization Sense of purpose all those things come to mind It helps you transition right you don't go from full stop or full-time work to full full-time leisure mode You you know ease into it work a couple days a week whether for money or in the community Doing community service. I think it's a it's a wonderful way to kind of bridge that gap. This isn't a very deep observation, but when you look at people who have transitioned well,

a lot of them are hobby-centered people. They have a lot of hobbies. People like my father loves to read, loves to play tennis, loves to play bridge, loves a lot of inexpensive hobbies. So it's great. He doesn't have to put a lot of money, but he's getting tremendous joy, but he's also getting social connection.

And that enabled him to transition relatively well. I think the community involvement one is a big one and boy am I ever seeing a lot of that. I live in Kitchener, Waterloo and I go back and forth to Sarnia and in both communities a tremendous number of retired people have found ways to give back. And so again, they're excited about the fact they're adding value. They're getting that socialization whatever environment they're placing themselves in, they're staying busy, it hasn't been as difficult to transact and transition mentally. I think it's all positive. Every perspective it works well. Yeah I had one you know great example of a retiree who tried everything right, tried all kinds of volunteer service, worked at like a suicide hotline, she worked at a birds of prey center, I really loved

that and ended up going on a trip with them to Costa Rica to do some community work So really found kind of some of the she tried a bunch of different things but found her passion and it's again it's that sense of purpose that We all need the socialization everything that you need. Absolutely My father as a way of ending at you'll this, said a couple years ago when he was 90, that he thinks that the way we can make all this financial planning easier is if we all kill people who are 85. And he said, then we know exactly when we're going to go and it makes the planning easier. And I said, it seems a little harsh, Dad. And I said, but also do I have to point out that you're 90?

That's right. And he said, no, he said I'd be grandfathered in because I thought of it. So he said, I'm safe. But he said, anybody else above the 85 has to go. But kidding aside, he was obviously kidding. He does make a point about the most challenging thing you and I deal with when we help people.

We don't know how long they're going to live. That's the single most difficult thing. Yeah. When you say, when can I retire? How much can I spend? How long is my money going to last? When are you going to die? Exactly., I can answer all that for you. But until we can answer... It's the key variable in the equation and we don't know the answer.

And we don't really know the answer to returns etc either. So there's a lot of guesswork here, you have to use common sense and to your point earlier, you almost have to be conservative. I mean if you don't end up pointing out that you can really get bitten at some point. Well, one book, Dave, that I've seen come up in the last five years, it's been really impactful for a lot of people. Dare I say more so than the wealthy barber. No, I'm kidding. No, you don't say that.

That's just been edited out wrong. No, but it's Bill Perkins, die with zero. Yeah, it's just a way to think about, you know, maximizing your life enjoyment and all the things we talked about, about giving, it's Bill Perkins die with zero. Yeah, it's a way to look at it It's just a way to think about you know maximizing your life enjoyment and all the things we talked about about giving it's not just Fending on yourself but giving experiences early to your kids and grandkids and obviously it's impossible to You know have your last trip last check bounce, but it's a way to kind of think about you know What did you do all this work for and accumulate all this capital for? about you know what did you do all this work for and accumulate all this capital for if you're not going to go and live your best life and and help out your community and your and your family around you so no it's an excellent i'm going to get bill on the podcast and i i had joked that i bought

the book and set it down and my daughter stole it did not want me to read it does not want that to be my plan in any way shape or form she's no dummy you know you know you're a great guy to have on the show you seem like a very nice person thank Dave. You come across that way in your writing, you come across that way with your Instagram postings and just dealing with you today. You come across as a real gentleman. And so it's a real thrill to have you on. Dave, I just want to close with one quick story is I had been blogging for maybe a year and the wealthy barber returns came out. So that would have been, you know, in summer 2011, I think. And so I wrote a review. Probably the first book review I've ever written. It was probably horribly done, but I was very, very kind

in my pre-is about the Wealthy Barber Returns. Very excited that it came out because the original Wealthy Barber is so transformative and impactful for me. And so I was shocked, floored when I got a message on my blog from Dave Chilton at the wealthy barber that said, all it said was, what's your number? And I replied back and gave my number and you called me. You called me and you thanked me for the review and you're so kind and honestly I'd been writing for a year, didn't know what the heck I was doing, I was a nobody in this space and I always remember that you reached out to do that.

So thank you for that. I've been really supportive of the community here. Well, it's my pleasure and again, I'm a big fan. So thank you for having you on and we'll get you on again. All right. Sounds good, Dave. Thanks a lot. Okay. Give my best to your family.