The Wealthy Barber Podcast - #67 — Alexandra Macqueen: How Retirement Planning Has Changed Over the Years

Episode Date: August 11, 2026

Our guest this episode is Alexandra Macqueen — CFP professional, Vice President of Learning, Development and Professional Practice at FP Canada and one of Canada's leading voices on retirement income planning. Alexandra has been a practicing financial planner since 2005, taught personal finance at York University's Schulich School of Business and co-authored the bestselling book "Pensionize Your Nest Egg." In this episode, Dave and Alexandra dive into how retirement planning has changed over the years, from the way rising longevity has reshaped Canadians' awareness of retirement risks to the assumptions that underpin every retirement plan. They cover why financial planning has become harder, when professional advice can pay off for retirees, and the roles FP Canada and the QAFP designation play in raising the standard of advice. Alexandra also breaks down the factors to weigh when deciding whether to commute a defined benefit pension and makes the case for annuities as a retirement planning tool. The conversation also explores reverse mortgages and how they compare to HELOCs, the "Die With Zero" legacy approach, lessons from "The Millionaire Next Door" and why the timing of CPP and OAS is different for everyone.  Whether you're nearing retirement or simply want to understand the decisions that will shape it, this episode is packed with practical insights from one of Canada's most respected retirement planning experts.    Show Notes (00:00) Intro & Disclaimer (00:55) Intro to Alexandra Macqueen (03:07) Why Alexandra Specialized in Retirement Income Planning (04:32) Why Longevity Has Changed the Awareness of Retirement Planning (06:56) Assumptions in Retirement Planning (10:14) Financial Planning Has Become Harder (12:55) Why Professional Financial Advice Can Pay Off for Retirees (13:51) What Is FP Canada? (15:23) What Is the QAFP Designation? (17:45) The Factors When Deciding to Commute a Defined Benefit Pension or Not (22:15) Annuities as a Retirement Planning Tool (25:13) Are Reverse Mortgages an Underappreciated Financial Tool? (26:30) Reverse Mortgages vs. HELOCs: Which Makes More Sense? (28:08) Evaluating the Die With Zero Legacy Approach (29:17) Lessons from "The Millionaire Next Door" (32:01) It's Harder to Navigate Financial Planning Today (36:17) The Value of an Outside Voice in Financial Planning for Spouses (37:54) The Role of Active vs. Passive Investing Strategies (39:23) When to Take CPP and OAS Is Different for Everyone (41:20) The Increasing Costs of Assisted Living (42:44) Teaching Financial Planners the Psychological Aspects of Working with Clients (45:18) The Reality of Family Adjustments After Retirement (46:03) The Improvement of the Financial Advice Industry (47:54) Conclusion

Hey, it's Dave Chilton, the wealthy barber and former Dragon on Dragon's Dent. Welcome to the Wealthy Barber podcast. Well, 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 this 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, will be here to help you.

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 we're 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 with the wealthy barber podcast. I want to start by saying something I hit on most weeks. Thank you so much for tuning in as often as you are. I noticed yesterday the podcast was number one in the country at Apple for all business podcasts. And that's not number one Canadian. That's number one in Canada,

including the international ones. It's been remarkable. The feedback that the podcast has generated, the number of comments and suggestions and criticisms and everything else we get. It's been great to hear from all of you. And we're continuing it on now. And really, pleased with today's guest, Alexander McQueen. We met long ago. She is truly one of the most well-known and respected people in the financial planning field in Canada. She was one of the first people to talk about retirement income planning, a subject that we have now discussed a lot in the show. She'll bring some fresh insights to that. She wrote Pensionize Your Nest Egg. I think back in 2010, 2011 was I came across. It was the first book of its type like that in Canada and helped a lot of people.

She has taught at the Shulik Business School. She's now with FP Canada doing a lot of their course development, helping them to figure out what's the best direction to take their educational efforts to help the financial planning industry. When I first met her, it was very clear to me very quickly that she was extremely intelligent. Are you still extremely intelligent all these years later? That's probably the most important question. Thank you for that introduction.

I think that what set me on this course, right? I think you're responsible for it. You're probably responsible for my entire career. Before we go any further, I need to note, of course, that I'm a co-author on pensionizer Nesteg with Dr. Lvinsky, right? Yeah, and he's a guy that I have great respect for. Yeah, for my career. But why are you responsible?

Because I was a young, perhaps intelligent, 22-year-old when my dad handed me a copy of the wealthy partner and said, this is what's going to set you up. That's great to hear. I mean, it really is. I didn't know that the book had had that kind of influence. And, you know, it sounds corny to say this, but you've gone on to help a tremendous number of people. So I'm very proud that the book played a role in your career because, again, you've become very famous in our industry. What did draw you to retirement income planning?

Because, again, back in the day when you first looked at it, let's be honest, most financial advisors weren't discussing it at all. That book, some we're talking about books maybe for the entire hour. Remember that book called Boom, Bust, and Echo? Very, very well. One of the best selling books ever in Canadian history. Right. So boom bust and echo was about generational changes, demographic changes. What was going to happen after this giant boom of baby boomers moved through the life cycle?

And what they were going to do at the end of their lives was retire. So it is interesting to think about the extent to which retirement income planning is kind of the flavor of the day now. I feel like if you're in your 20s and 30s, you're probably over-consuming retirement. Retirement income planning material. I agree. Generational, that's what people are evolved in. So anybody who could look forward to see where are people going, while they're going toward retirement,

and what do they need? Will they need planning support for that? No, I couldn't agree more. Boom, bust and Echo, by the way. I mean, it sold hundreds of thousands of copies in Canada, unheard of at that point of time. And then remember, the pig and the python came out by David Cork looking at demographics.

And it also sold a crazy number of books. very well-done book. And it's tougher to do that nowadays, of course, with you competing with the internet and social media and everything else out there. You know, when I first started getting back into personal finance, I complained that a lot of the advisors in the industry weren't helping their clients at all with the decumulation stage, with optimizing for taxes, with looking at retirement planning and retirement income planning specifically. But as you noted, that's changed fair to significantly the last three, five, seven years. It's now getting a lot of attention. You deserve a lot of credit for that. What's changed out there? Is it just the demographics?

The baby boomers required the advice and so the marketplace has responded? I think the biggest single change is longevity. So if we tend to get financial advice from the people around us and from our parents particularly, right? What did mom and dad do? So either you want to do what they did or you want to do something very different. So either they serve as an example or a warning. My parents, very interesting, right? Like my dad was a university professor and then civil servant. My mom was a teacher. So they retired with DB pensions. And when they were making decisions about retirement, it just was a completely different environment. So stepping back even before they retired.

So my parents got married, had children, had four kids. They bought a house because you had to put these kids somewhere that you couldn't kind of really prevent from arriving. So my mom had all her kids by the time she was 30. I had my first child when I was 34. So they had like a full decade of saving, having that mortgage, paying it down. Do you remember mortgage burning parties? Absolutely. They were huge.

So mortgage burning party when they were in their early 50s and then they had these debentions. But the last 15 years of their working lives was dedicated to saving for retirement because the mortgage was paid and the kids were gone. Right. Every single element of that story has changed. People don't get married and don't. buy houses in their 20s. It's in their 30s now. So you've lost a decade, and the remaining decades you've got need to do more work in terms of saving for retirement. And then when you do retire at whatever age that might be, you can expect many more years in retirement, your parents

and your grandparents. On average, obviously, you can't predict for any one person. But the single largest change is that we're living longer in retirement. And if you think about what I just said, we have fewer years to prepare for it because we're all getting started later. Yeah, I agree with all of that. And, you know, when you look at retirement planning, it's funny. I'll have friends say to me, hey, can you give me a financial plan, a retirement plan, help me look at mine, et cetera. They're hoping for a lot of precision, but we don't know how long they're going to live. We don't know what the returns are going to be. And we don't what the, we don't know what the inflation rate is going to be. Those are three pretty important

variables in the planning process. So how do we deal with that? Do you do a range? of different things that can happen, and you have models that can encapsulate all of the different possibilities? Well, it's a really, again, I'm just going to keep saying this is a really interesting question. Thinking about formal education, I said that my dad handed me a copy of your book when I graduated from university. One of the things I learned at university that has stayed with me that entire time is a prof casually saying, problems don't stay solved.

So if I developed a retirement plan in my 20s, I know that I would need to adjust it many, many times until actual retirement arrives. So is this idea of continual course correction. So is there a range? Yes, FP Canada, my employer, publishes every year the projection assumption guidelines, which are a set of assumptions about how long people might live, what returns might be, what inflation might look like, what asset classes are doing, intended to guide planners in making financial plans. But that question of how long, right? Like you're not picking a single age. I think I'm going to live until 95. Well, then what happens if you off by one or the other? It's the idea that you need to have a plan that is continually reviewed and adjusted. I couldn't agree more. When they're

looking at those numbers and they're making those projections, are they making them 10, 15, 20 years out and are they building them relatively conservatively so that if anything, people tend to oversafe? Or are they trying to actually be as accurate as possible based on, let's say, current valuations that the market's up against? They are grounded in data and the data sources are included in the publication so anybody can look. And they are intended to be used for long-term projections. So if there's significant movement in the recent past, it's smoothed up with the idea of

that you're projecting 5, 10, 15 years. It's interesting think about a retirement income plan because you could still be in early retirement, you have 30, 35 years to go potentially. So it's still a long-term horizon. My dad's going to hit 40 years in retirement. So what's changed, you can have a retirement that is as long or longer than your entire working life. That is a huge, dramatic change over the last 150 years in Canada. And if I went outside my house and flagged down somebody on the street and ask them to estimate how long people live in retirement, that person has probably not going to say 40 years. Right. No, I agree. And my father's already been in retirement longer than he

worked as a high school principal. Like you, though, or like your family, defined benefit pension plan. Obviously, indexed to inflation, took a lot of the pressure off, had no debt. They paid the mortgage off early. All the things that you talked about is very much how he grew up, had the kids early, and then did some fairly significant saving late life. So he's in a fairly good spot. This is why I always say you need to marry somebody with a defined benefit pension plan. This is a key part of financial planning. So when you look at all this, what mistakes do you see out there? So are you doing any individual planning anymore? I'm not. I'm not a client-facing planner now. I've devoted all of my energy to FP Canada and delivering the education that educates and trains

planners to provide client-facing advice. What I think, so it's difficult for me to comment on what I see, but I'll tell you what I hear about, which is people not having that. holistic view of what's right for me, right? I thinking about the wealthy Barbara you and it wasn't retirement income focused. It was pay yourself first, keep it simple, everyone gets a will and invest in a diversified portfolio. So if people did those kind of basic financial hygiene things, but we're faced with much more complex problems. So nobody has a defined benefit pension. Somebody's gone bankrupt in the relationship. There's blended families.

families, gray divorce, all of these things that are happening. I'm sure that they have always happened, but it feels like the background is more complicated. I couldn't agree more. And you mentioned gray divorce. I'm obviously older than you by quite a bit, but you didn't have gray divorce at all when I was young. And now it's commonplace to see people get divorced in their 50s and 60s. blended families, of course, much more common now than 30, 40, 50 years ago. You add that to your point about defined benefit pension plans, buying homes later. It is more complicated than when I wrote the original wealthy barber. In fact, doing the redo and going out and spending six months of pre-research talking to all the people, you realize how much they're up against with the cost

of living, the cost of real estate, but also every situation seems complex. It's hard to capture all of the moving parts with four characters in a book now. Interesting. It's interesting. It's I'm going to use a big word. We've talked about longevity. Longevity is multiplicative. You said that in interviews, and honestly, you're the first person I've heard use the expression you do, and I think it's fantastic. So just expand on that because I really like what you're saying. At one level, it's basic arithmetic.

So if inflation is going up, so you said that there was a couple, I can't remember the specific, we talked about inflation, asset classes, and how long you're going to live. Longevity multiplies the impact of inflation. because it's taking so much longer years. Yeah, no, this is true. This is why my dad suggests we all die at 81, although he's 94,

so I'm not sure where he's coming up with that exact figure. Seems a little unfair to me. But you're right. I mean, it does. It multiplies those challenges and what you're up against and you return all of it. I mean, it makes it quite tricky. I have said on the podcast that I don't love people doing this themselves,

that there are the odd, you know, people out there who are very sharp and can learn all these techniques and maybe gain access to software. But for a lot of people, as they do their retirement planning, their income planning, I think they need to sit down with a trained professional to look at all the different possibilities and also to be complemented by software. Well, there's the math part of it.

But there's also, you are generally not aware of your own biases, right? So there's things that I might discount or you might discount that a planner coming from outside will say, have you considered this? And it's just, it's a facet of human nature. You are, you don't see those things that you are not in your view. No, it's absolutely right. And they're bringing a wealth of experience to the table and seeing a lot of different things. And so I think it is important to sit down with a planner at that stage.

When you look at FP Canada, I'm jumping all over the place a little bit here, but Brock me through what the membership looks like. Is it advice only planners for the most part? Is it AUM? Is it a mix of all the above? So FP Canada is a national not-for-profit organization whose mandate is financial wellness for all Canadians. So we're not actually a membership organization. We are a body that educates and regulates and certifies certified financial planners and qualified associate financial planners.

So in order to achieve one of our designations, you need to complete a course of technical education. And my staff, I rely on this metaphor quite a bit. But that's the rules of the road, right? What are the traffic rules? And then you need to complete a course of professional education, which is how do you apply those rules? So just like you would never say, well, I've completed my in-class portion of the driver's test.

I know how to drive a car. You need to go out there. Exactly. You need to go out there and get that car on the road and demonstrate that you can parallel park and you can safely maneuver it around the city. So technical education, professional education, a certification exam and work experience.

And then, of course, you need to meet certain ethical requirements in order to be suitable for certification. But those are the elements that you need to bring together, education, experience, ethics, and exam. And is there an ongoing component as well? And you need to maintain your competency and demonstrate that you've done so by completing continuing education. You know, I've taken some criticism on the podcast

for not talking enough about the QAFP, and I think I've deserved that criticism. We have focused a lot on the CFP and its merits and its importance. Walk me through a little bit about the QAFP and how it's added value and who's well suited to it. So it's a great question because we are in the midst of launching a redesigned QAFP. So I qualified associate financial planner. Back when I became a certified financial planner, which is in 2006, you did what was called FPSC1 and then two. So it's kind of a two stage certification.

And then what we've done more recently is make the QAFP into what we would call a terminal designation. As in, it's not a step on the way. It's its own qualification. And we are redesigning it and relaunching it to be much more, to get financial advice into the hands of Canadians sooner. So we're making this more streamlined program that people can start and complete in about a year. and it's very focused on really the fundamentals of personal finance. So tax, retirement planning, investing, and what we call financial management, which is all the credit and debt, personal balance sheet.

I've heard wonderful things about the course, by the way. I mean, Jessica Morehouse took the course last year, the year before. Some of the CFPs who've come on the podcast have spoken very highly of the QAFP and how it's an excellent course. and for most people it gives them what they need, to your point, to help the average Canadian. That's right. And the CFP is a more challenge, in the sense that it takes longer, the exam is longer, but we are designing the QAFP to respond to all of the financial issues and circumstances and problems and questions that Canadians meet on a day-to-day basis. So everything from, I need to make a decision about my pension.

I'm leaving my job with a defined benefit pension. Should I commute it? Should I leave it in place? What should I do? That's actually a relatively common, even though it's a complex question, and it's high stakes, and it's one way. It has all these facets around it that make it really important. That's a competency that we expect at the QEFP level because it's something that Canadians need advice on.

You know, it's interesting. This is going to be a little deep for some people, but, you know, over the years, when you look at the complex math behind, do you commute your pension? and do you take it in a lump sum and go on to invest it on your own? In the majority of cases I've looked at personally, the odds have favored you were better to leave it where it was. Not in all of them, but the odds are favored it. But what's interesting is people who went against the odds in the last 10 and 20 years have

often won because the markets have been so strong. And depending on where and how they invested the money, they've ended up doing quite well and been glad they went throughout that the odds didn't favor being the winner. Do you think that's true? Is it consistent with some of the what you've seen? I mean, I think it depends on your definition of winning, right? So the way that you framed it as they ended up with more money. But if you, you know, pensionize your nest egg.

The opening vignette is of a woman, I can't remember what we called her. She's in her 80s and she's just received a scary envelope from her broker that she has to open and make decisions about. Like, should I invest in this? Should I invest in that? I don't know. Versus, if she. kept her money in her DB pension. Right.

And money is just showing up at her bank account, month after month. She doesn't need to worry about it. So if you define winning as I got a bigger pile, then, sure. But if you define winning as I can sleep at night, knowing that, the money is there no matter what, then maybe that's winning. The thing that I think is overlooked around the computation decision is that for somebody who, You can only commit if you're leaving a job. So I'm leaving my job with my defined benefit pension.

If I trust that the money is going to be there when I retire, then I'm going to have that income stream in retirement. It means that you can invest much more aggressively with the rest of your portfolio. So you can get that diversification. I think that's a benefit from having some DB income that people don't necessarily appreciate. It's this all or nothing. I'll take it all out. I'll invest all myself.

You and I are on the exact same page on this, and we always have been. I read your book all those years ago. We'll talk about annuities in a moment. But psychologically, there is so much evidence, both anecdotal from people you and I've dealt with, but also really well-researched data coming out of some U.S. papers, that psychologically people are much happier. And isn't that a big part of what this is all about in retirement when they know they have a certain amount of income coming through on a monthly basis?

and then you're one of the first people to highlight that. And it's why you and I both are probably bigger believers in annuities than the vast majority of people out there. And I don't think they're perfect. And I don't throw all my money in annuities, nor would I recommend that to too many. But I think they're a tool that for a lot of people should be looked at. Well, think about CPP and OAS.

Those are essentially forms of annuitized income. Again, it's coming in. You're alive. You're breathing. You're getting it. Yeah. And you're getting it in an inflation hedged way. Oh, my gosh.

With OAS, this is such a trivia tidbit. but OAS is adjusted for inflation four times the year. Because in 1973, when there was the oil crisis, it was felt like we got to make sure that this is keeping pace. Keep up. Yeah, we got to keep up. Let's go, you know, when you go back to the commutation, and again, I'm jumping all over it. But it's interesting now when you look at most markets throughout the world, so let's focus on the U.S. and standard imports 500 specifically, valuations are rich by most standards.

And so now you could make a compelling argument that next 10 to 15 years are likely to have less returns than the last 10 and 15 years have. Nobody can say that definitively, but that's what the odds favor. And people should be factoring all that in to their decision processes. They make their projections about whether to take the monies now or to leave it in the DB. You add in the psychological factors that you brought to bear. And I still think that for a lot of people, it's the right move to make sure at least they think it through. Unfortunately, the industry often wants the people to take the money because when they go to an advisor, the advisor wants to bring it in-house and therefore be able to monetize it in some way, shape, or form.

But I think that's part of the benefit of working with a CFP professional or a QAFP professional because they're very explicitly trained in recognizing their own biases as well as supporting clients through a discussion about the client's biases. But they also have professional standards of responsibility about putting the client's interests first. No, and that's a fair point. Now, I'm going to go back to annuities for a second. You remember years ago, the marketplace tried to come out with some indexed annuities. And I did a deep dive on those. I don't know if it was 15 years ago,

I get confused as to timeframes now. And I thought they were a weak product. And I'll tell you why. The actuaries involved in designing the product wanted to be alter conservative and not expose the insurance company to excessive risk. And so, of course, not knowing the future inflation rates, they used very conservative from their perspective assumptions,

which meant high inflation rate and kind of work backward from there. And I didn't think it was a particular, a good product for the client. Now, for the most part, you don't see those in the marketplace much anymore. So you're talking to think about the guaranteed minimum withdrawal benefit products. No, I know I'm talking about true indexed annuities. At one point, when they tried to bring them out, I didn't think they were fair to the client, but by accident, because again, the insurance companies were trying to be, you know, protect their own futures. Now we don't see that particular product available. Well, it's interesting to compare that to, for example, the DB pension.

You mentioned your dad's pension, high school principal, probably fully indexed. to inflation. Yes. So it's the defined benefit pensions, which are concentrated in the public sector, even though some of those have walked away from full inflation protection, because inflation is so, it's a variable that no one controls. That's right. What you're seeing now in the pension space is more shared risk around inflation. And what you also see in the annuity space is essentially impossible. I don't know that you could buy on the open market, and inflation indexed annuity. You can buy an annuity that has an escalator or cost of living. Every rider or benefit that you add to the annuity will cost. So your question is whether those are

good products or not. I think that if there was a demand for them, then they would be available. There's a lot of innovation. This isn't really my, I'm no actuary or mathematician. There's a lot of potentially interesting things in the annuity marketplace. And we look to the U.S. to see what's happening there. And also things have been tried. But even the plain vanilla basic annuity is not, I don't think, as popular as it could be or should be in Canada. I mean, I've said that on the podcast. And again, nobody is saying that these are perfect tools that should be used in every instance. But they are a tool that can play a role for people. And we've both added, psychologically, can make a big difference. I mean, the bottom line with an annuity, the money's

going to keep coming no matter how old you live to be. And in some instances, it's very important to have some money invested in something like that. And I think that with the private purchase of annuity, so I'm buying it or you're buying it, you have a ton of control around I'm buying a little at a time. So you can, just like you could dollar cost average into mutual funds or over time, you can dollar cost average into an annuity over time. So buy some at 65 and some at 70 and some at 75. And of course, the cost goes down as you age. Yeah, of course. So they're very interesting. tools and you did shine a light on them earlier. Speaking of tools, what do you think of reverse mortgages? Do you see them playing a role at all? It's funny. You're hitting all the hotspots.

Reverse mortgages, I think that's another underappreciated tool. I remember Garth Stevenson. I've got the name right? Garth Turner, maybe? Garth Turner, thank you. Standing up in the House of Commons is saying this is a great product if you hate your kids. But that's from the point of view that your home was, for most people, you said this, for most people, back in the 1980s, they're home with their largest, maybe only investment. Right. So this was the store of value that you were holding on to to give to your children because it was the financial legacy that you had.

The environment now is very different where houses might have grown in value by more than a million dollars over the last 20 years. So now homeowners in large cities in Canada are sitting on large amounts of equity. The reverse mortgage is a way to provide some cash flow in retirement if you don't have income that can support a he lock, and you need money for whatever reason. You can have a reverse mortgage set up so that it pays a recurring amount like an annuity. I think that there's some compelling cases to meet for them, but thankfully I'm not in the business of providing direct advice to individuals. Now, you made an interesting point there that I think I've been guilty of not making and others have been too. some of the critics will talk about how just go out and in essence create your own reverse mortgage

through a helic, et cetera, but not everybody late life can qualify for a helock. They may not have the net needed income to get to the level of the helot that they want to spin off the desired income. So that's a very important point you've made. But I think it's important to look at what the actual circumstances are. So theoretically, people are like the reverse mortgage, the rate is too high, it eats into equity. Of course, if that's what it's designed to do. But think about the amount of a risk that the lender is taking on. There's a very uncertain payout for them. That's why the rate is higher. And if you have mom and dad, or mom living alone or dad living alone, in a home that has equity and they need income to support their ongoing living, like, what are they facing? Is it that

they would like to stay at home? Most Canadians, if you survey Canadians, they want to stay at home. So I want to stay at home. That's my goal. This is what a financial planner will do. What's the client's actual goals? Okay, I want to stay at home. home. I need more money to support that. I don't have money in a bank account, but I do have equity in my home. Is this reasonable? What would it allow them to do that they're not otherwise able to do? What's the home equity for? Is it to support the older adult later in life? Or is it to be part of an inheritance that's passed on to children? Well, for me, I wanted to support me later in life, but I want my fathers to support his children. Is that wrong? I'm just kidding.

I just am always doing it from a selfish angle. Die with Zero, the famous book that came out of the States. Have you read it? What are your general thoughts on that approach? I think I'm going to probably say the same comment that I've said elsewhere as it depends on your goals. Some people want huge legacies. I remember working with a woman years ago now and she wanted to build a really large legacy so that she could leave large amounts to charity.

And I thought, oh, like it had never occurred to me. Sure. You could have a desire for a large financial legacy. that wasn't about leaving it to your kids or having wealthy children. It was about doing good in the world. So die with zero by definition means that you're not providing any kind of financial legacy, whether that's for kids or grandchildren or any cause. I think it's interesting how you hear the expression generational wealth so often now.

I've had colleagues say, I hope we build up enough generational wealth that our grandkids don't ever have to work. Why would you want your grandkids to never have to work? I think that's an odd objective, to be honest with you. I think for a lot of people, you want people to have to work their way through life, the trials, the tribulations, the force growth, the responsibility, the sense of purpose, there's a lot of positives that come with work. To raise up another yet another financial book, The Millionaire Next Door.

Do you remember that? One of my favorites. Oh, it's one of my all-time favorites. Okay, perfect. So those guys, it's, I'm not going to get the names right, Thomas Stanley. Stanley. Thomas Stanley. Okay.

It talks about providing economic, outpatient care to your adult children. And he says, don't do it. So if generational wealth is defined as setting up a situation where your kids and your grandchildren don't work, I think that you could possibly view that as providing economic outpatient care. Absolutely. And the issue is, I think that there's lots of stats around in that circumstance, the generational wealth is gone in like a generation or two. And, you know, the guys that wrote a millionaire next door were fantastic guys. And they were even better speaking because they got to present their data in a more robust fashion.

Do you not think that book was ahead of its time? Like a lot of the point that that book made are so relevant today, talking about the craziness of what we spend on cars and how people buy, you know, the biggest home they can possibly afford, which knocks them out of the saving approach to their 401ks in the States, their RSPs in Canada, again, so much good information in that book. I would still recommend to our listeners to go out and get a copy of it and read it. Have you heard the expression that the Ford 150 is responsible for the retirement crisis in the U.S.? Yeah. And by the way, I believe it. No, I really do. Like, I mean, I don't know if you listen to the podcast

much, but I go on and on about what I see from younger people. They have a legitimate complaint about home prices and the cost of living. But a good percentage of them, not 50, 60, 70, but 20, 30, what they spend on cars is crazy. And it's often a couple, doing it twice. 84-month car loans. I can be outraged about all kinds of stuff. And but I think... Go, go for it. We want to outrage. We're a little boring sometimes.

Fire it up, baby. Fire it up. It's just that when I think about the wealthy barber, I think about reading that at age 22 and realizing that you could provide financial advice to people in this kind of plain language format. And I said, you're responsible for my career because that's what I do, not in the sense that I'm providing financial advice, but providing this curricula that trains future financial planners in a very consumable, understandable way.

We don't have Roy and the barber chair, but we do have replete with examples where people are seeing, here's a rule and here's how it's applied. But the basics of personal finance have never varied, right? Okay, you just use the word curricula and then replete in one sentence. You are welcome back any time. Clearly, clearly one of our sharpest guests, no doubt about it. Not many people are going to get both of those in. And I agree with you, the basics have stayed relatively the same.

I would argue, and I'm a little defensive sometimes of younger people, there's more coming at them now trying to get them to spend. We didn't have social media hitting us all the time. We didn't have the internet, et cetera. Man, it's tough to fight off temptation now. You can just one tap. You can set it up in advance to pay. Exactly. Buy now pay later. And it's going crazy now, especially in the U.S.

I just was in a meeting earlier this week and we were talking about the new additions to the curricula. And we added buy now pay later because people need to. know about that form and installment loans. So we have a section on payday loans, but we've expanded it to include installment loans and buy now, pay later. But it's not only those things and everything coming at you. So if I'm

22 years old today, I need to figure out am I saving in a first home savings account, a TFSA, an RSP, my employer's offering me some magic for, like it, there was one when I think about the wealthy, the first edition of the wealthy Barbara, it was RSP's. You told people to max their RFEs because

that's what there was. Yep. So every, you know, I'll use that word multiplicative again. Because every time you add something on, it's not just one more thing. It's that thing in relation to everything else. You said that eloquently. And for our listeners, now you can understand why it took me a lot longer to write the updated version than the original. Logically, you'd think it wouldn't be that way at all. But to Alexander's point, I talked about RSPs in the first book.

Now I've got TFSAs, RSPs, FHSAs, but more importantly, I have. to show you if you can't do them all, how do you prioritize? What are the nuances that matter in terms of your decision process, et cetera? You have to cover off a lot of different scenarios. If you're saving for a down payment, well, obviously the FHSA, pretty darn good spot to do it. But then do you go for the RSP with the Home Buyers Plan or do you go for the TFSA? Walking through all the details to all of that, it's tricky. And explaining it in an understandable fashion, it's tough. Problems don't stay solved. So even if we had a fixed number of accounts and it never changed. The tax rates underlying everything are changing.

Absolutely. It's the capital gains inclusion rate going to change. Is something that isn't subject to tax today going to be subject to tax tomorrow? So it's the getting that fundamental basic education to become certified and then keeping it up to date. People need to, the people that we certify need to take ongoingly 25 hours of continuing education to prove like, yeah, I'm up to date on these changes. It's such, I'll give you an example of that. I, I did a video a while ago on why you shouldn't pay down your home buyers plan loan early. And I had a lot of people in the industry, learned people, people with all the designations, get in touch me and say, you know what?

I never thought of that. It kind of had slipped through the cracks. Nobody was really speaking about it. And there's just so much now because there's so many different accounts, so many different products, so many changes to your point. It's tough. Should I fund the kids RESP with $50,000 at the year of birth? Up front?

Yeah. Or do I fund over time to get the maximized? the grants, like everything at one level is a math problem, but then you bring in, you know, but what do I want? What are my actual goals? That's why I'll re-plug the idea that working with somebody who has your best interest at heart and who has been formally trained in all of this stuff, right, to can help you cut through. I have a financial planner. Yeah, that's interesting. That's a good way to look at it. And by the way, I love your example of the RASP. And if you have the opportunity to fully fund it, do you? I spent two days.

I'm studying that where I look at the math from every different perspective. I'm creating flow charts and software even. I'm getting in touch with experts in the field. Am I on the right track? What was your conclusion? All of this is a lot trickier than it was 30 and 40 years ago. And to your point, it all relates to each other too. I find the RESP, the toughest question, by the way, is when people say, hey, I don't have

a lot of money right now. We just bought the home. Should I go RESP or RRSP? Well, there are two totally different goals. And so this is like, should I save for retirement? in an RSP versus a TFSA, at least you're talking about the same objective. But with the saving for the kids education versus the RSP, that's very much a family decision. What is your priority?

Where would you tend to go, et cetera? So you're right. This requires a lot of training, a lot of thinking on behalf of the planner. And I find it interesting that someone with your background, your skills, your expertise, and you're writing the courses for heaven's sakes. And you still have a financial planner. I need that outside voice. Right.

Interesting. Yeah, that's very. Boy, that'd be a lot of pressure being your financial plan. Planner. Plus, I have a spouse, right? Yes. I think that financial planners probably are the people that have the most joint engagements in the world, right? That you know, this poor planner has to, you know, there's me, there's my spouse.

We don't necessarily, we're not the same person. We don't have the same goals. We have different objectives, different preferences, and stuff that we haven't ever thought about or talked about. So the rule of the planner partly is to make some of that stuff explicit, to get it on the table so we can look at it and talk about it. it. But like this is like being Einstein's math teacher. This is going to be tough on the planner. They're trying to do financial plan for somebody who writes the financial planning courses.

That's a pressure situation. Does the person work well with both of you? And do you believe in both of you sitting down with the planner simultaneously or do you sit down with him or her separately? As you might imagine, my husband leaves a lot of the financial planning stuff too. He knows it's, you know, it's passion, it's an interest and it's something that I'm comfortable with. But it's that idea that obviously he's a big part of my financial plan and his plans are very intertwined with my plans. So it's the opportunity for us to have a formal structure, to have a third party coming in and saying, okay, turning to my husband, what do you want? As opposed to me just saying, well, this is what we're going to do because I worked it all out in my math model.

I think you should go with that approach. I actually like that better. Just tell them what you're going to do. Emphasize your own happiness. Okay, let me jump to another subject matter. Where do you fall on active passive. I don't love those labels, but let's use them here. Are you a fan of just buying an index funds and using ETFs, or do you believe that some people can indeed outperform the broad market averages? I think, again, this is a matter of people have very different preferences in this area. And again, it's not an all or one. So you could have a portfolio that's mostly passive and then say, well, and we talked earlier, my dad was a professor of earth science. So one of my brothers is a geologist, and he gives me stock tips around this mining company.

Interesting. He's actually very interested now in Heliot. So you could have a portfolio that's mostly passive with a few active plays. You could be all active. You could be all passive. I think that it just depends on your preferences, your level of knowledge, how much trading are you going to do? What's your overall approach to investing? What does the planner or advisor that you're working with,

If you're working with one, what do they, what's their preference? What's their style? It's really an open field. Yeah, see, I'm a little more strongly opinionated there. I think that for some people, certainly, if that's their preference to pick and choose their own stocks and they have the skill set in time, I'm fine with it. I've had friends who've outperformed the market focusing on mid-cap, small-cap, Canadian stocks, for example.

But for the vast majority of people I meet, I'm pretty pushy. They'd be better off just taking the broad market averages because I've watched how poorly they invest, to be perfectly honest. They have trouble with the emotional aspects. It's like the question about if you could opt out from CPP. Sometimes you'll read arguments about people should be able to opt out and invest the money themselves. They don't want to participate in it. But I think exactly you just said, for most people, most of the time,

remaining in the CPP is the right decision. No, you did a great job. I saw you maybe a couple years ago. You were asked about the CPP and whether people should take it early, et cetera. And you gave an answer that sounded like you were trying to be politically correct. but I knew that it was the bang on right answer. There is no perfect response to that question. It does come back to the individual circumstances, et cetera.

What's your broad thinking on that now as we've all examined it on CPP and when to take it? Well, let's return to my scenario with my spouse. So in fact, there are four income streams that I need to consider in retirement, that I have control over when they start. My CPP, his CPP, yes, I do, I will probably control when he take. My OAS and his OAS. So I don't, we're not at the stage either one of us yet, where we're eligible to take any of them. I guess he's eligible to take CPP.

But I need to, the decision needs to take into account those four things. Right. In addition to, well, how much money do we want and how many years do we think we're going to spend in retirement? And how much are we spending in return if the money's not coming from there, where is it coming from, etc. So there's, I can't overstate how complicated the decision is. and mine is an ordinary household with two adults who are eligible for two each streams of anewitized income in retirement. We will probably defer, I don't know, maybe, I don't even know how long I'm going to work.

Right. No, but you're right. Every situation is different. It has to be thought through the health of the people involved, what their spending approaches. And speaking of which, I mean, this is finally getting a lot of attention is that different people spend a lot differently in retirements. you know, there's new problems emerging. We talked on the podcast a lot about the amazing

costs of assisted living and the cost of getting someone to come in your home. Those costs have exploded since COVID. You know, they're up double in many instances. And I have a lot of friends running into that. Our families run into it for heaven's sakes. And, you know, there's often been this feeling that I'm going to spend a lot in my 70s, the so-called go-go years in my late 60s. And then I'm going to go down to a no-go situation where I spend a lot less. But suddenly, for a lot of families that's not playing out that way because they need to get outside help on the health front. Well, it's that idea of, you know,

I'm quiet at home with reduced activity, but I'm losing capacity. So that's back to this longevity story. So we have added years of life in the last 100 years, but we haven't said that those are going to be working years. We've said, okay, those are going to be years in retirement. And there's this concept of age-adjusted or health-adjusted life expectancy. So how many of those years that we've added at the end of life are spent in good health?

No, and it's true. And the answer is distressingly few, by the way, that our health span has not increased as quickly as our lifespan has. And you're right, we've added all of those years to retirement. We haven't suddenly started working longer. In fact, among most my friends, they're going out way before 65. You know, a lot of them teachers, for example, are retiring significantly earlier than 65. So all of this is tricky. How much work do you do CFP and the other courses on the psychological aspects of retiring?

So yes, the math is this and you can help them. But what about how do they transition, keep that sense of purpose, that sense of identity? Is that something you're getting more involved in or do you leave that to outside sources? It's something that I personally am very involved in. And I would, we, FP Canada's big continuing education event every year is we have a conference in November. And it has, I think, 15, I'm not going to get the number right. that has a bunch of sessions. And a lot of them focus on those.

We can call them soft skills, but they are the psychological aspects of working with clients. So how to have difficult conversations. And I think the psychology of retirement is one of the most important challenges, issues, perspectives, topics, facing the financial planning industry.

You've heard those kind of slogans about retiring from something to something, like defining what you're retiring to, that you need to have a sense of purpose. But I think that there's everything we've talked about to this point and has touched on, there's like there's the math component and then there's everything else. It's psychology, the goals, the perspectives, the bias.

It's equally important. Perhaps even more important. The math is kind of, that's where we talk about, is AI going to take over the financial planning space? Will financial planners have careers if everybody's using chat, GPT, or clothes? to get answers. And the answer is there is absolutely a need for that human to human contact to elucidate. Another word for you. Goals, needs, pains, gains. I think it's very difficult

to do that with an AI-enabled tool. I think you need a human being. No, I agree with all of that. I hope that's the case because AI coming in and taking everybody's jobs is not something that thrills me. By the way, my grandmother's favorite word was ample. Ample. Yeah, I always like that word too. You've used some good ones today, though. You have certainly used the best words today. You've outshone me dramatically. But I think just to return to the AI, I think, the math is just the math. Like the math is, it's indifferent to my goals, perspectives, and needs, right? I could, the math part is the least important part. It may be the least important part, but still obviously it provides the guardrails. Like you can only go so far in your hopes and dreams. And

so much of this is about striking the right balances. And we go right back to your very first It's also fluid. You know, what you think you're going to enjoy in retirement, what you think you're going to spend can change very dramatically for different couples. I remember when my father retired, he put some thought in not enough into how am I going to fill my days? He was a workaholic and he had some trouble adjusting. But my mother had a lot more trouble having him at home. She was like, I don't want to hang around this guy this much. This is crazy.

And it really frustrated her. So they had to work for about 12 months to figure out ways to fill his time without him annoying her. It's not easy. There's a lot of adjustment here. I remember my mom calling me a couple of years ago and saying, if your dad's 20th anniversary of retirement, you should call him and congratulate him. I'm like, yeah, well, where is he? She's like, at work.

That's a good one. He retired when he was 83. Yeah, it makes sense. I mean, I'm retiring from the wealthy barber relatively soon, but I'm sure I'll fill other things in and you look for new opportunities. Listen, it was great having you on. You have got a great reputation in the industry. You command tremendous respect.

I think it's wonderful that you're at FP Canada now. Someone with your experience and your quick mind can add a lot of value to the course development. You can see the passion and the authenticity of you hoping to help people. And that's what it's all about. Do you not think I'm going to ask a very positive question to close this off that the industry has really starting improving in the last five to 10 years, that we're seeing a lot of very smart people coming in and leading by example. They're sharing ideas. They're pushing each other.

Like I am very pleased with what I'm seeing in the last decade. They're all on your podcast. Yeah, we've had some good ones, no doubt about it. We've been lucky, and we are guest driven to the end degree, and we've had the best minds. And so many of them are great communicators, too, and nice people. Like, I've really enjoyed getting to know a lot of them because like you, they're very passionate. They want to help people manage their money better. And again, they all seem to be feeding off each other now.

Yeah, I think that, you know, you talked about young people today, but the environment changing that so much is coming at us, but all of that stuff that's coming at us also provides opportunities for connection and synergy. And that's, I think, that what you're pointing to is that you have a community of people that are interested and they can connect with others, with clients and with each other to talk about strengthening the profession and what they bring to clients. And then, as I said, FB Canada's mandate, financial wellness for all Canadians. That's everyone. And so the conference is in November. conference in November.

And where is it this year? And you have people come from all over? It's virtual. So people can attend from their desk coast to coast. Well, that's good. Well, anybody out there who's in the advice business can't recommend it enough because, again, you're learning from the best, you're sharing ideas, best practices, all of it, great way to make connections.

So thank you so much for coming on. You're wonderful. It's nice seeing you again. And I appreciate you finding the time. Thank you so much.