The Wealthy Barber Podcast - #76 — Adam Chapman: How to Spend, Give, and Live Well in Retirement

Episode Date: October 20, 2026

Our guest this episode is Adam Chapman — Certified Financial Planner and founder of YESmoney, a London, Ontario practice built around helping Canadians spend with confidence in retirement. With nearly two decades in financial planning, Adam chairs the Estate Planners Council of London and is a founding member of the Financial Planning Association of Canada. He has spent his career helping retirees figure out what they actually want and start saying "yes" to their money. In this episode, Dave and Adam dive into the practical side of retirement income planning, from paying yourself first in retirement to managing cash flow once the paycheques stop. Adam walks through his three retirement planning checkpoints, the real costs of long-term care versus in-home care and why guaranteed income floors matter more than ever. They also break down annuities in detail, including copycat annuities, piggyback annuities and how pairing them with delayed government benefits can take the sting out of inflation fears. The conversation also explores the emotional side of money in later life, including the struggle many couples face when selling the family home and the psychology of spending in retirement, the subject of the book Adam is currently writing.  Whether you're approaching retirement or already there and wondering how to spend without worry, this episode is full of practical, grounded advice from a planner who spends every day helping Canadians make the shift from saving to spending.   Show Notes (00:00) Intro & Disclaimer (00:55) Intro to Adam Chapman (02:08) What East Side Mario's Taught Adam About Business (06:18) How to Pay Yourself First in Retirement (08:22) Living in the Woods in Forest City (09:37) Retirement Advice for Dave (11:32) The Real Costs of Long-Term Care vs. In-Home Care (13:06) Retirement Income Planning and Cash Flow Management (16:40) Adam's Three Retirement Planning Checkpoints (19:44) The Emotional Struggle of Selling the Family Home (23:39) Writing a Book on the Psychology of Spending Money in Retirement (27:28) Why Guaranteed Income Floors Matter More Than Ever (29:50) Copycat Annuities (32:31) Managing Inflation Fears with Annuities and Delayed Benefits (37:18) Piggyback Annuities and Financial Peace of Mind (39:55) Giving Living Legacies vs. Inheritances (45:56) Die With Zero and Turning Money into Memories (48:12) Conclusion

Hey, it's Dave Chilton, the wealthy barber and former Dragon on Dragon Stent. 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 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, 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, back with the wealthy Barbara podcast, one of the hottest podcasts in the country, I must add, amazing the momentum we've had, but we have fewer than 10 episodes left. We stopped taping at the start of December, going to miss it all, obviously. I'm thrilled that so many Canadians coast to coast have embraced it. We've learned a

lot, by the way, from all the feedback we've received. Thank you so much for that. We've got top-tiered guests in our last 10 episodes. We really do, starting with today's Adam Chapman, Adam is from London, Ontario. We'll talk more about that in a few moments. He runs yes money and we'll talk about where that name came from. He has a very interesting background. So he is a CFP. He's been doing this 20 years. In fact, he's been in the retirement income game probably longer than anybody. He was one of the first people to specialize on that. He has brought some very innovative thinking to it. But his background educationally is quite fascinating. It's in palliative care, bereavement counseling, etc. I think that sets him up for success, by the way. emphasizing empathy, communication skills. Adam is an exceptionally nice guy. Very charming, very funny guy. I enjoy spending time with him. I want to start the interview, Adam, in a very unusual way.

You and I bumped into each other in London, Ontario, first time we'd actually met at an East Side Marios, and you shared with me that Eastside Marios played a big role in the success you've gone on to have in your adult life. Tell our listeners about that. First things first is, went to your book signing and realized it was a lot shorter and faster than you had originally thought the lineup for so big, you sold out of books before I got there, which was really

disappointing for me. Awesome that we got to chat at East Sides right next door. And that was the restaurant I worked through. That actual location was the one that I worked through all of university at. So starting in the kitchen, worked my way out on the floor hosting, and then eventually spent most of my time they're serving as a server. And for most people who probably know me, they wouldn't judge me to be an introvert. But before working in a restaurant, I was an incredibly shy kid, right? Very introverted. And one of the things that working in the restaurant taught me very quickly was that good service, good communication also meant you made more money. Once you start making, you realize the better you get at talking to people, you can actually, you can actually

turn that into a way of walking out of the restaurant with extra cash in your pocket. So it really formulated a lot of the thing that eventually, when I finished school, it was like, okay, what do I want to do? And I realized I really like the balance of serving people, giving a great service, doing something. But I also like the restaurant always still had a little bit of that behind the scenes time where you could walk away from the table. You didn't have to be in someone's face constantly. And I really wanted to find an industry that had a balance. Plus, I also, my background in school was in psychology and business and economics. So financial planning happened to be the thing that I stumbled into that seemed to really

represent some of the things I was enjoying at the restaurant, but helped me turn it into a slightly different career path. It was a great foundation for me. And even some of the lessons I learned on service and how I like to run circles actually translates into the business I still run. Like, one of the things that used to be fairly common at East Sides was the servers would typically have four tables. But you remember, you've been into East Sides a lot, right? All you can eat soup, salad, and bread means there's a lot of extra service per table. So servers have a lot more stops than they typically do at a standard restaurant. So one of the other things I learned while I was there is I actually sold more and made more if I only had three tables.

That's interesting. Because I had a little bit more time to sit and talk to people. you could build a little bit better relationship with the table that I actually would outsell people who serve four tables using three and make more money. Now, did you letting the manager know this or did a fourth table just sit completely unserved, starving to death and embittered by the entire process? Yes, yes. No, they would adjust the sections obviously. Okay, good. It was actually one of the managers that noticed it because they would always take our end of the night sales. Right.

And the general manager at the time, Steve, would notice that my three-table section, I was out selling the four-table sections. And that became one of the things that has actually shifted into my business and how we operate, yes, money, is it's a lower volume, deeper, higher connection kind of place to be. And I really try to keep it that way, because it's my preference. It's how I like to do business. For those of you listening, that really is the kind of personality he has. He likes to connect with people. Well, by the way, East Side Marios has played a big role in our lives because that's where I met Marine. All of you know Mo, my famous assistant, she was a manager at an East Side Marios in Waterloo that I frequented.

I came to know her very well, have great respect for her and stole her away. I think that was 75 years ago. And she's still with me all these years later. So we all tie in to East Side Marios, but a bing, butabooam, or whatever it is. All right, let's move on to the first topic. We're going to jump all over until we get to your specialty. And one of the notes you sent through, I thought, was interesting. You reached out to a lot of your retired clients and you focused on that arena and said to them,

hey, Dave Chilton, the wealthy barber is about to retire. What piece of advice would you share with him about making the transition? You came up with some pretty interesting answers. I have about 60 households, right? Well, almost 65% of them sent something in going, this is a tip that you've told me. He needs to hear this. And one, actually, the one I love the most that I've got to give you first is a twist on stuff that we talk about, But I love that it's a twist on your words because they're a big fan. So this was sort of a, when you retire, you can keep paying yourself first. All you have to do is change what you pay yourself with. Interesting.

And that was because we focus so much on saving for so long and accumulating, right? One of the things we have to switch is like we can't keep saving when we're in retirement. So people lose this connection to paying yourself first and they actually feel a bit lost. Right. But we have to give something else in extremely. change for that, which is paying yourself first in experiences, right? Agree. And bring that money into doing adventures, going out and doing stuff.

And as I often tell my clients, in my favorite definition of spending is that spending money is how we live and how we give, right? So we have this definition of consumption base that we try to avoid when we're saving, but then the definition needs to change when we hit retirement. And I think that's where the pay yourself first thing can actually still continue. you're just finally directing it in the way it was meant to go. Right. You were saving it in the first place.

No, that's very good. Just for you when you get there, right, it's like, okay, how do we take this methodology that you've come up with that so many people have followed and keep it, right? Because it does work so well from a mental puzzle piece to go, oh, right, I have to keep doing this thing. And because people miss that saving element so much, you have to find something to pivot it to. I like that. I think you're right. You're paying yourself but in experiences, enjoy, taking advantage of that freedom you now have. So that makes a lot of sense. By the way, just not to get off topic for a second, but it's hard not to notice the background. I hope it's not a green screen, but in fact does represent your home, I'm assuming, home slash office. And is it a log house?

Yeah, this is my actual house. It's not a green screen. This is my actual house. So I live in a log cabin in the woods, in London, Ontario, a handful of minutes from downtown. I lucked out. years ago, there was a gentleman that was living on this property who actually built the log cabin, but he ended up leaving the province and the house actually sat empty for six years. This beautiful log cabin sat empty for years. And I managed to get in touch with him and purchase it from him when he was finally ready to sell it. How long have you been there? Ten years next May, so quite a while. Now, wasn't London at one point known as the Forest City or am I off on that? It is. I think it's still called the Forest City. There's a little bit less trees, but then I was flying in when we were at the IAF conference recently and on my flight back landing in London, I was actually sitting out

on the right window to look out and London does still actually look like a forest from the plane when we were landing. I was actually quite surprised. Well, that's a very cool house in the middle of the city. That's highly unusual, especially a developed town like London. All right, let's go back to the retirement advice. Anything else jump at you from what you heard back from your colleagues? I had so many different emails. One of the best ones that I also love in this is don't make your 90 year old self the most important person in retirement. We can get so hung up looking forward and being fearful of what that person's going to need that we don't look at what we need now. Right. And that is part of the spending on yourself doing a bit more now because I work with a lot of 80 and 90 year olds. In fact,

12% of my clients are actually now. We're dealing with the powers of attorney now. We don't even act. have direct contact with the client. And everyone always marvels once you actually get there, you know, when you sell your family home and you get into either a retirement home or long-term care or whatever that looks like, they're always surprised by how little it costs, right? Because one of the things that we misunderstand when we think about the cost of these places to live, I get a lot of people come in and they go, okay, no, retirement homes are going to cost me eight grand a month, right? But then they don't subtract the cost of their home that they're going to sell. That's right.

So sometimes the difference between the home and the retirement home is three, four thousand dollars a month. But now they've sold their home and they've got this asset. And it produces incredibly tax-efficient income, right? Like that's the other thing is your house is coming from a non-registered portfolio now that has no capital gains on it yet. So you can produce a fairly high level. of cash flow from that without attracting CRA. Right.

So you've got all these components actually pull together that this fear, especially in Canada, that these long-term care costs are going to be incredibly expensive, just doesn't actually play out. I've never actually seen it play out in a way where it's as expensive as people thought it was going to be. You know, I kind of agree with that. But what I have seen a little bit lately is people don't want to go into a long-term care of assisted living, et cetera.

Instead, they want to bring help in. And so they're not necessarily selling the home. They could bore against it, but they're not necessarily selling it. And bringing that outside help in, especially if it's 12 and 24-hour care, that really can add up to a lot of money quite quickly. That is the most expensive way to age into retirement, right? But it's funny how many people actually think it's the other way around, right? They think if I stay in my home, that's cheaper than if I go pay this $10,000 a month rent somewhere. But it's actually the in-home care that costs the most.

So that is the one time, and it's usually a question we ask people, is what is their preference going to be? And it's usually always in that question, too, of when we're talking about, so what are you going to do when your spouse passes, right? What would the next course be? It's usually in there that we find out they would sell the house. They want to stay there. And we always try to make sure that there's a buffer there for people when their spouse passes. They can stay in their house for three, four, five years, you know. And most can stay there longer.

they just choose not to. Agree. But knowing those wishes in advance makes it easy for us to plan for that, right? And then we can go, okay, we can accommodate this now. And it makes it really easy to get ahead of that one. But that is a preference thing. And I still find a lot of people misunderstand which option is the most expensive because aging in place is by far the most expensive option.

Completely agree. Been through it, by the way, in our family. So I'm on the same page. I've got an interesting question for you. When you look at all of these cost estimates and everything else, at what percentage of the population is actually doing the work on this, is actually doing retirement income planning? I get you and other experts on the show,

and it makes it sound as though Canadians are embracing all these approaches and using software and talking to experts. But I'll bet you it's fewer than 5% of Canadians are actually handling this in the proper fashion. It's definitely a much lower number than it should be, but I also think it's because they just don't know where to start. I think one of the things you have to realize that financial planners are particularly good at is saving people from themselves.

This is our primary job is that we go in and we're often looking at stuff going, okay, what do we have to change? What's working? What isn't? And when you realize that planning is kind of almost in some way kind of pointing out the things that aren't working well that you might need to do different or giving you information you're not quite ready or comfortable to hear yet, it's tough to want to engage in this kind of stuff.

So I always find that one of the biggest barriers for people getting a plan is they don't want to see the cost of their own mistakes. And it's a scary, very vulnerable thing to come and sit down and talk with someone, lay all your money out, talk about this. And then the cash flow piece, so we actually do as part of our planning process, like we actually do a cash flow exercise with the clients. And it takes us almost 45 minutes to an hour. But when you put a husband and wife together in a room and make them talk about what they want to be spending, in retirement, right? It's amazing to watch the dynamics of two people go through a cash flow exercise that they may not have done in years. And it's also where they start sometimes being more forthcoming with the things that they really want in retirement, right? Because now we're

getting down to the nitty-gritty. I couldn't agree with you more, by the way. In fact, you'll find this fascinating. Just this morning, I taped a video and I said in the video that all the people I've helped directly. I'm talking friends, friends, kids, etc. I've reached back out to a lot and said, what made the biggest difference of the things we spoke about? And you know, we're talking RSPs versus TFSAs, ETFs, all these things. None of it. The thing they kept coming back and saying was when I helped them with their cash flow management. It all starts there. It does. And you're right. In retirement, everything flows from you communicating about what your dreams are in the cash flow front, what your income is, what your expenses are, summarizing all of that nicely. That is. That is.

is such a key part of financial planning. It's the most important aspect of what we do. Like even when you go, all the questions that retirees typically show up with, right? You go, do I have enough? When do I start my CPP? When do I? All of it actually comes from that spending number. I remember years and years ago when I specialized sort of in the retirement space. One of my thoughts was, okay, if I do this, I'm going to start seeing the same kind of people over and over and over again, right? And yet it is wild when you actually now, every client I have, even though we're very niche as well. Like we don't work with business owners.

We don't work with rental properties. We don't work with cross-border. We don't work with farmers. We work with the retirees who typically work for someone else. Normal Canadians. Yes. And they were typically employees and someone else, right? So they're fairly ordinary in that I always sort of thought,

okay, there'll be some similarities. And then you hit that cash flow exercise. And it's like you see what they want from their retirement coming out when it finally comes down to choosing what you want to spend your money on. You are so right, by the way. I completely agree with that. I've seen it with all my friends. And I've mentioned many times in the podcast, I'm asked,

why didn't you write the retiring barber? And I said, it's very difficult to use that format because everybody's situation is so different. There are enough moving parts. And as you point out, they have different spending desires and so on and so forth. It was tough to make that kind of approach work effectively, teaching retirement planning. No, I couldn't agree with you more. set of circumstances different enough. So it's great when people read books, but this goes back to a common theme of this podcast. Get help from an expert just before you retire or in your retirement.

It's so important. I would even say, like, I think part of it is definitely people show up to get that retirement plan just before they retire, right? Because they want to know where that first dollar's going to come from. And if they're working with, you know, in a lot of cases, an investment advisor who doesn't do planning, a lot of the people that show up to me, are ones who are actually working with a planner. I agree. We do the AUM side of things, right? But we do passive investing only.

Right. Okay. So we tend to get more the people who aren't the do-it-yourselfers and typically engage in advice-only planner. We get the people who don't want to do the money management but weren't getting the planning that they actually need now. And part of it is just actually kind of sitting down and going, okay, what do we need?

But when you realize that plan that they need to know where their first dollars coming from is probably a little too late. right? Because we have other questions that come first. So I always get at that five to eight year mark, the question is before you retire, right, is are we there yet? Like how much further away is the retirement line, right? And that last handful of years is where most people's wealth actually arrives, right? The mortgage is finally getting paid down. The kids are out of the house. We finally have extra money to save. It's the best time for people to correct their trajectory if they need to. Then you do another plan about a year or two out that actually says, okay, where's this next first dollar going to come from? Do I know how we're going to stitch together a salary once we've actually given it up? And then you need another plan about two years into retirement. You've got to let the jitters kind of settle in. But that next plan should actually focus on how much more can you spend, right? And those questions are very different. So the approach to even how you piece it together, the advice that's provided are very different. So I would even be

encouraging more people to make sure you're getting some of these questions that are sitting in your head. You may not be articulating very well, but they are very consistent because even after the spending one is when you transition into, you know, it's usually about seven to maybe 10 years into retirement. It now gets into this giving thing. Well, I've spent some money on myself. I've had some good retirement trips. I've done a few things on my own or together. You know, we're feeling pretty good about using our money now. Now we want to help the kids. Now we want to help a charity. And all of a sudden you start digging into the next question is like, how do we make this money mean something? I want to jump back to something though that I've spoken about once before in

the podcast and I find people almost get a bit irritated with me. I have noticed that over the years a lot of people, a lot of seniors, my friends, because I'm there now too. I turn 65 very soon, is they don't want to sell their house. They love living their house. I'm like that. And I always think I'm never leaving this house. I love it out here, et cetera, et cetera. But when they do sell, they actually really quite enjoy living in an apartment or a condo, the less work, the lower cost, the less space, etc. And many times they say to me, you know what, I was wrong.

I wish I'd done that years earlier. Do you hear that too? Or is that something I just have heard from my friends? It's definitely a very common thing. Though I would also say I have a lot of people who would be, you know, out of the ant and grasshopper kind of story, they're the ant. they are really good at thinking ahead. And so some have actually intensely, like, well before they needed to sell the house,

they sold it and they did it. But there were definitely those people who get ahead of it. But because I'm not almost a bit like losing your driver's license, right? That feeling when someone finally forces you to give up your driver's license is almost an admission that you're having a harder and harder time doing things independently. I think it's just a really tough thing. Right. And I think when you leave the house too long, part of the reason why we hang on to it is, because it's us trying to hang on to our independence and the things that we hold on to.

I get to do a lot of really cool things with clients helping them spend money, give it away. I get to see this wonderful, amazing side of retirement and using money. But there's also this dark element to it too, right? Pretty much from the time that you start retirement, you're basically in some form of cognitive and physical decline. I'm there, baby. I'm there. Yep. And it's like, and you're in this battle.

And so it's like, time isn't on your side and you can feel it. And I think one of the toughest parts, and this is actually why I went and got all the training in palliative care and bereavement, is because grief and loss is the entire retirement experience. It is. Whether we realize it or not, you're actually either in some form of anticipatory grief, which is waiting for the losses to happen, right, or in a state of losing something that you're not quite ready to lose yet. Absolutely. I think the attachment to the family home, to the lifestyle, to I'm comfortable, I like this, I built this is really hard to let go. You know, you're a very sharp guy. I mean, you know I'm a big fan of yours and you just said all that extremely well. And that's what I have found, by the way, about people going to sell their home. It's not the actual home.

They recognize the hassle factor. They have too much size. It's all of the things that represents the lifestyle. They like the neighborhoods. Comfort. They don't want necessarily major change because as you point out, When you get older, you're dealing with change on an ongoing basis. You're losing friends. People are calling you once every two days with a major health issue. Anticipatory grief, absolutely. Omnipresent. You're making so many good points.

I think your background, getting involved in palliative care, getting involved in bereavement knowledge, etc., really positions you uniquely well for what you're doing. Yes, thank you. And honestly, it was a bit of an accident. Again, the dark side of working with retirees is I get to build these wonderful relationships, but then I'm also there when they pass, right? So I have been there sometimes far too often

when I'm not even ready to let a client go. I had a year quite a while ago where I lost three in very quick succession and I was finding I was struggling with that loss. Absolutely. And that's where the desire to get some additional training came in. It's been completely invaluable. Like actually, you can see my degrees sitting on the corner

in all one of them is the palliative care and one of them's the bereavement one next to my DFP in my Western degree. Yeah, that's good. So you went to Western, you couldn't get into Laurier? That's okay. Don't beat yourself up. Don't like seriously, don't beat yourself up. Hey, I'm jumping a bit all over and I normally try not to do that in these interviews, but I want to go to two things before we talk about the big picture and the retirement planning and the spending and the giving and everything else. You talked to me when you first reached out maybe two years ago and we didn't know each other at all. Pardon me, you're working on a book. And there's not. nothing harder than writing a book. I don't care but it's a financial book, a work of fiction,

nonfiction. There's truly nothing harder. Don't spend a lot of time on it, but just give me a feeling for what that process has been like, the frustrations, the challenges. It's certainly been the hardest thing I've ever done in my life. I would also quickly say probably the most valuable. You know, when you realize how much stuff we, as you specialize and you get really good at something, you know, the little things and the details, you're not always paying attention to it while you're doing it. Right. And one of the things that I've learned with this book, because again, the whole book is all on the psychology of spending money. But when I first started writing it, which was actually five, six years ago, I put the first little concept down. Believe it or not, one of the early titles and the publishers I was working with said put a mock up. I actually had the wealthy barber retires at one of my like, I hate to sue a friend, but there's a lawsuit coming. It's fortunately not the title now, but it was that like, okay, who are you trying to speak to? Right. Right. And my clients, I think, are very similar. to the ones that your book has always spoken to. The psychology part has always been my favorite thing. Even back when I used to joke that I'm the financial planner who helps people spend

money, not save it, right? I get advisors who's kind of look at me and go, well, what are you doing that for? Like, A, spending's not hard. And B, you know, in an AUM model, spending money is anti-revenue, right? It's about the worst thing you could actually convince a client to do. So it's funny, though, in the last five years, I would say I have noticed other advisors, and you've seen, this and you've had people on the podcast, people now know the retirement spending thing is an issue. So originally when I first sat down to write the book, I thought, okay, I've got to convince people first, why they need to spend more, why it's harder than they think, then I got to explain why they're struggling to spend, then I got to give them a solution. And now that a couple of the things,

die with zero has come out. So there's a book there that says, okay, you do want to be spending more if you agree with that methodology. People now believe spending is harder than they thought. So what it's actually done in the last year or so, it's actually made the book writing process. I've actually been able to strip out a lot of stuff. And it's actually making the book far more focus, which I think is going to make it far more effective. And it's really just digging into why spending is so difficult, like why retirement spending is harder than any spending you've done before. That's what the book's about now. So it's just that psychology that we struggle with in retirement to actually let go of the money. And the mechanism in the book, I think,

think you'll get a kick out of it and I'll make sure you get a copy because I think you're going to need it when you retire. But it actually explains the psychology of why your pay yourself first actually works, right? Because pay yourself first works for spenders who struggle to save, right? My book is trying to create sort of a similar shortcut, but for savers who struggle to spend. Spend, yeah, it makes sense. So it's a bit of a reverse engineering in that regard, but there's a psychological process that we go through when we're trying to spend money. And that's what the book is really targeting and chapter by chapter giving you a glimpse in to what's happening as you're trying to do it so that you can at least catch yourself when you're in one of those moments and go,

I'm doing it again. And that's the whole purpose of the book now. So it's moving much faster. It should be out next year. For anyone who actually kind of thinks it's something they might want to read or give to a friend or a family member, it's hard to save, harder to spend. And I actually threw up a really quick website at harder to spend.com for anyone who thinks they might might want to read it. I don't send anything. I don't publish newsletters. But if you want book updates and sort of an announcement, I do actually have a little website that's now up at harder to spend.com so you can follow along. Okay. Now, before we go on again to the spending in retirement, we talk a little bit more about some of your specific advice. You've heard

me mention annuities on the podcast several times. They've really drifted from the public consciousness. Not a lot of advisors focus on them. I view them as neither positive nor negative. I view them as a tool that on occasion can play a very helpful role in retirement planning. I've always been astonished how little they're used in Canada and how they may make more sense than the general public realizes. Give me some general thoughts and you're welcome to give me some specific ideas too in the annuity field. Yeah. So a lot of people are to say that I'm a fan of annuities. What I'm actually a fan of is guaranteed income, right? Guaranteed income is the thing. There's a lot of data behind this on just how much it changes our retirement outlook, our spending outlook. Even the way you invest your portfolio when

you have a guaranteed income floor changes when you have income that you know you can never outlive, right? So there's a massive psychological shift that happens when you have this in play. The big shift that's happened over the years is when you think about like the greatest generation and the silent generation, back then about 54% of people actually retired with a defined benefit pension. Now we're down into much lower numbers where like the private sector, I think the number even actually includes defined contribution pension plans, like 20% or less. So basically, people are retiring with a lot less guaranteed income than they used to. And it's even where as we provide the advice around CPP and OAS delaying to 70, we end up with people who spend a good chunk of

their early years sometimes without any guaranteed income sources at all, right? Especially if they do the fire community thing and they retire really early. They're spending a decade or more just living off the portfolio. And that is a psychologically difficult task to do. And it leads to excessive underspending over and over and over again. So annuities fill a gap that people used to get from their employers, right? So if you want that kind of carefree living that the earlier generations of retirees had, guaranteed income is an important thing.

And annuities just happen to be the best way to buy it for yourselves if your workplace didn't offer it. There's so many different ways you can work it into a plan and just even the retirement methodologies of how to produce income. We use annuities a lot. But there's really fun things that I find that people just don't even know you can do. And this is one I definitely want to share because I think it's really cool. It's called a copycat annuity. This is for people who actually have the defined benefit pension, right? This isn't for the people who don't. This is the ones who actually have one through their private employer like General Motors or the Cammy plant or, you know, teachers. And teachers, I mean, as like university professors, things like that.

When you get your package, right, from your employer when you retire, right? And you get this big bundle of paperwork that you have to make all these decisions very quickly, right? So the first ones usually keep the pension. The next ones take the commuted value of the pension. But quite often there's an extra option in there that says buy an annuity. And that's pretty much all it says. But that buy an annuity option is a really important one to pay attention to because this means you have an option to do a copycat. And a copycat is a very simple thing.

It's basically taking the pension that you're already entitled to, but you're allowed to shop it around to the insurance companies. Your pension firm will do a calculation that'll say, okay, based off of your entitlement, your pension is worth $500,000, right? But basically, it's like taking it to the insurers and say, can any of you provide the exact, same income, same bridge benefit, same survivor benefit, the exact same pension, which is why it's called a copycat. It has to be identical and do it for less money. Right. And if the insurance companies can actually do it for less, the beautiful thing is the pensioner actually gets to keep the difference. So we had one out of KMI that we did last year and he got the exact same everything and got to keep $39,000 on his way into retirement. Taxable money, but it meant that he had a little extra to

roll into his RRSPs and walk out with the exact same thing. Now, here's the real interesting part is that even if there's not an extra amount to collect, I still suggest to people that they explore this option because there's one thing you get that even if it's a complete wash, same pension, no extra money for you, it's a complete wash. The one thing you get that you don't have on your pension is now the assurance protection, right? So now you have the exact same pension with an insurance company, but now it's insured. Right. The insurance company goes under, you actually have protection, whereas like the Sears Canada thing and all these pensioners who sometimes have gotten wrapped up in a company that eventually

goes bankrupt, at least you know that payment is actually now more secure than it was even staying in your pension plan. It's an incredible option for people who are planning to take their pension want to keep it, but see if we can get some extra security out of it, too. Yeah, interesting. Now, with annuities, obviously, the resistance a lot of people have is they're very fearful of inflation. So if they have an index pension, they're a government worker, for example, they're covered if CPI gets hot again, which of course it has in recent years. But if they buy an annuity and we've got the fixed income coming in each month and inflation runs hot, it's worth less and less than purchasing power

terms. Is that something you think holds people back? It definitely does. There's a bunch of different ways to mitigate that because in Canada, we can't index directly to inflation. We can index it at a fixed rate, but not directly to inflation. But the way that we tend to do it is when we're building the income floor, we're comparing the amount of guaranteed income to the needs that we've done that cash flow with. So we know their needs are, but then what we're also doing is we're grossing it up. So we're building inflation in by purchasing a buffer, annuity, right, to create that buffer. But then you also have to realize and run a factor on how much of their CPP and OAS creates part of their income floor. That's right. Those go up. But, you know,

But then you also have the psychological research that shows, and this is out of the U.S., and there's a decade and a half on this, too, that retirement spending declines throughout retirement, right? So even though we worry about inflation, spending actually declines over time. When you see those kind of things all working together, inflation actually isn't the thing and as big a concern as people kind of make it to be when we're doing the annuity approach. But there's lots of wonderful ways you can adjust this, too. You can ladder it where you do your annuity and then you do CPP at 65 and then OAS at 70 and it's kickstart. Then you get the increase on the OAS at 75 that you can actually build it so you get adjustments in that. You didn't come floor. And now you also have the advanced life deferred annuities as well, right, which can kick in additional income even later if you want to plan ahead.

And basically, you're setting aside the money that you know is going to pay for that floor, those needs. so that the money left over you know you can spend. This is where the name yes money actually comes from is creating that pile of money that you know you can use. Right. And that's the thing that guaranteed income really helps us do. So the annuities are really just how we fill in the gaps between what we're going to use and when

so that you can start and spend a good chunk of your retirement knowing there's at least one payments coming in that the markets, future presidents, you name it, can't change, can't affect. and we can't outlive. I actually think the real reason why people struggle to buy annuities is because they suffer from a pitch problem, right? I'll put you back in your Dragon's Den Days for a second, okay, that if you think about annuities and the way people think, so everyone's always worried about running out of money, right? But they don't typically believe that they're going to run out of money because they live too long. Most people, when they start retirement, there's good

data out of the U.S. on this, actually believe they're going to die much sooner than the actuarial tables suggest. That's right. Absolutely true. This is why people want to take CPP at 60, right? Right. But the funny thing is, once they hit 75 or 80, the data switches. And all of a sudden, now we believe we'll live a lot longer than the data actually says we will. So it's kind of like once you cross this goalpost, you think you have in your head of how long you're going to last in retirement, you actually start to believe in your own immortality. But what we really want is that guaranteed income coming in sooner so that we can create that confidence to spend. So what I think it is. It's like imagine someone's showing up on Dragon's Den with a product to sell, right? They want you

to invest in it. But we're coming in with a pitch for a product for a problem that no one believes they have. Yes, good point. This is how I think the whole industry has to reframe and we have to get away from the word longevity. Yes, it does help with that. It is a longevity product, but it actually helps us solve the risk of gravity better. That's the thing it helps us do that when we have a guaranteed income floor, we have the confidence to spend more in those earlier years, which for the people who are worrying about dying young, that's the problem. It actually solves even better. And again, to our listeners, we're not saying annuities are perfect at all. No. I mean, nobody's annuatizing their entire portfolio, but they're a tool that should be

looked at more often. I think almost all the experts I know agree with that. And I think Adam hit on one of the crucial points very early in that answer. The research clearly says people are happier when they have some guaranteed income they can't outlive. The research on that is robust, by the way. And I think that's very true watching people, just taking real life experiences. That is a big plus. That's why these government pensions, of course, are gold in so many ways. You don't have the investment risk. You don't have the longevity risk. They're indexed to inflation. Like, holy smokes, it doesn't get a whole lot better than that. One more quick question on annuities. Do they still have the piggyback annuities where you buy the insurance to? Is that still a big thing out there?

Yeah, they're still probably a lot more common than I've seen lately. I came through insurance originally. I was part of sort of that world when I first started. So I saw a lot more of it. I haven't bumped into one in years, but I know those things still happen because when you combine an insurance company with an insurance policy with an annuity, you get a lot of commissions, right? So then they'll happen.

And it's a great way to make sure that, because again, if people don't know, when a life insurance policy is sold, there's usually a chargeback period. Right. So if the policy is canceled within a certain time period, the advisor has to pay back all the commissions. So the annuities that you pair or piggyback with it are a great way to make sure that they're not going to cancel the policy because it's already prepaid in a way without being prepaid. So they can still be done. I have seen some value. I could maybe come up with a scenario or two if I really thought real hard that that would work. But I get a lot more people in

even when we look at annuities is even sometimes we had someone come in last year or the year before where they were preparing for the fact that one of them had been diagnosed with Alzheimer's, right? The other one was the one that managed the money but was in poor health. And they were just trying to make sure that if they died, that there was still enough guaranteed income now coming in, that the one with Alzheimer's could live as long as they needed without the kids having to fuss around with the portfolio. and like there's so many different situations where just it's a peace of mind product because it's even peace of mind from the market and everything else that for anyone who worries about what's happening in the world guaranteed income is one of the ways that you can

really give yourself some relief and then still keep plenty of portfolio on top of this. That's the whole key is you actually don't want to annuitize everything. In fact, no, of course not. When I first started working in some of the annuity stuff, one of the ways it actually started working in the guaranteed income space. I was getting a lot of people showing up with two defined benefit pensions and no savings. Right. So we were working through processes to go, okay, maybe we should take the commuted value of one, keep the other. And that actually was years and years and years ago how I first started coming up with the we need a guaranteed income floor, right? So how do

we create then the measurement of what the floor needs to be? How much do you calculate to keep? all those kind of processes actually came from going the other direction. Now I spend more time going, okay, we have no defined benefit pensions. Let's build the floor instead. Okay, to wrap up today, talk a little bit about giving, because that's become a big part of your practice and what you preach and teach and what you're known for is helping clients as they age to recognize they have more capitals than they need.

What are the best ways to have a living legacy, a post-life legacy, to help as many people as possible? and the psychological barriers that stop some people from doing that. It starts with the same thing as spending, right? Do I have enough to actually do this? Right? That's the first question, and that's what you need,

a really good plan to help with first. But assuming you can get over the hurdle, I think one of the toughest parts about living gifts that's different from inheritance is you're here to watch how they use it. So everyone wants to give this gift because as soon as you think about giving money to your kids, your loved ones, or you imagine all the wonderful possible

things that they're going to do with this money, and then immediately you switch into, oh, but what if they do all the wrong things with it? And everyone has a different definition of what the wrong things are, but it's usually that sort of thought process that really shuts it down, right? Or they switch into this idea of, I don't want them to use it on the wrong things, so I'm going to make sure I put all kinds of controls, or I'm going to make them report back to me next year with what they did with it. So the toughest part of building a gift and doing it well is actually letting go of the control, right? And getting into a state of mind that you can give a lump sum to create the impact

without feeling the need to control it. This is the most incredibly difficult part, I think, of giving a gift, is being okay with what they spend it on. And there's lots of different ways you can drip in gifts, and we've done this a bunch of times. But it's the results that we're after, because I'd like to share a few of the, if they're ahead, of course. I have seen some of the coolest things people give.

And this is, this is my. philosophy that living gifts build the legacy inheritance can't buy, right? There are some things that have to be done when people are younger in order for your money to matter to them. And one of the best ones I had was I had one of my recently retired couples accidentally bought themselves an extra grandchild. Okay. And it was this really interesting scenario where we've been talking about gifts, but I would even say with a quick disclaimer, some of the numbers I throw out probably in some of these gifting ideas, you do have to remember some of these people. They're They're not ultra wealthy people.

This is years of sometimes talking up to doing these gifts. They don't just happen like this. So in this couple, we've been talking about doing a gift for a few years and finally got them ready to do it. COVID happened. We decided to proceed anyways. And they gave 100 grand to each one of their kids. So most of them used to pay down the mortgage, do the housing market thing, that kind of

stuff. What they didn't know is one of their kids, they'd already had two grandchildren, but they actually had stopped having children because they didn't think they could. could afford another one. So when they got this money from mom and dad, put it down on the mortgage, their amortization went from 21 years down to like 14. And all of a sudden just they felt more. Yes. And so they actually had a third kid that they actually wanted to have, but just didn't think they had the finances to do it. Right. Now, I tried to, you know, they had a little girl. I tried to convince them to name it Adam. But they didn't like that. But, you know, there's so many things

like that that money, if it had come in as inheritance, can't make that happen. Well, I agree. And also, you think of all the things they can do in terms of maximizing TFSs, RSPs that many times you're passed already or you already have the ability to maximize paying off non-deductible debt, whether it's credit card debt, even your mortgage, or all these things that you're probably passed at 60, 65 and 70. They're very much in the throes of. And you and I both know the cost of living is running very hot right now. Young families with two kids, They are pinched. And so any extra money to help them just absorb sporting costs or the odd trip,

etc. or an accident with a roof, all of this money can do things for them that it can't do. But of course, you have to be able to afford it. Yes. And that's, that's again,

you need a plan first. You need someone who does good retirement income and also has some comfort level with helping people give larger sums of money. Like I know some advisors don't like convincing their, right? There was one I had last year. We gave away 30 to 35 percent. of her portfolio at the age of 75. We gave 75 grand to each of her kids on her 75th birthday, right?

One of the things I love is you do the reversal, they come in for the big birthday and you give the gift. You give the gift. And in this one, like, it came out. One paid off the mortgage. One bought into his engineering firm. And the other one was super frugal, already mortgage free and everything. She had to convince, go on a trip, actually enjoy this money.

So all three kids actually use the money in wildly different ways, things that will and pack them forever. And then I even had another one. This is probably my all-time favorite one. You have a grandchild on the way, right? No, just had it. You actually have one. Just have one. This is one of my favorite gifting ideas that I've done with a handful of people is that we have in Canada, the maternity-paternity leave time frame where your job secure is 18 months. Right. But EI only lasts for 12, right? So there's a lot of parents get forced to go back to work sooner than they're ready, that one of the best things you can gift to your kids is, is buy them those extra six months.

Agree. It's a really simple, easy thing to do, but it's the kind of gift. Again, inheritance can't do that. Inheritance can't buy that extra time with a parent and child. You and I are on the same page here. Now, would you speak to my father because he just keeps taking, taking, taking?

This guy has not got the giving message. We buy him every meal, every, every, he never pays back for anything. He's got it figured out, really. He might have the best financial mind of anybody I've ever crossed paths with. He's making money in retirement somehow. He's got his little schemes work and he knows exactly how to get it from him.

If anybody should be writing a book, it's him. He's going to send you this episode to convince you to give him money. I was joking once before. I bought the book Die Was Zero and then my daughter threw it out when she saw it sitting on the counter. She's no dummy. Yeah, she's ahead of the game. Now, what did you think of the book Die Was Zero? Believe it or not, I actually haven't read most of it yet.

I was trying to avoid influencing my own book Oh, I see. Yeah, that makes sense. Started in the same zone. I always have, it's like you don't necessarily want to just say something that someone already has, but sometimes you have to say it to then get to something deeper. So I have read snippets. Lots of people have told me about it because I've been knowing that I'm writing this book for a long time.

And it would have initially probably overlap. I think now it would be a companion book because you can't die with zero if you can't spend to zero, right? Right. And my book is all on the psychology of spending my money. and actually using it. So I still think I love the concept. I love where it's going.

And the memory dividends is great. I love the things that I know are in the book. But it's also when I would say, too, that one of the only things that I've actually found in helping people reshape sort of that spending idea that, because spending sometimes is a bad word for a lot of people who have been good at saving. Right.

That spending is how we turn our money into memories, right? That's what it really is when we get to retirement. So if you don't like the word spending, use something like that and just go, okay, I'm turning money into memories. That's what I'm doing. It really truly helps with that hurdle of saying a bad word. Yeah, I'm with you. I've often used the word with people that they're not spending their investing. And so instead of investing in stocks, they're investing in memories, they're investing experiences, they're investing in their kids that they're giving it away. So they're not spending it per se. This is not on, you know, things that are frivolous,

etc. It's on joy. It's on all the things they've worked hard for throughout their life. So couldn't agree with you more. I like your positioning and all of that. My dad's book, by the way, Just Never Die will be out at some point in the next 20 years. That's his, he's working on it now. Slowly, albeit about a page a day, but just never die,

it's his approach. He read that study that we talked about that once he hit it, he's going to live forever. He's on that train. I said to once everybody dies and he said, David, there are 8 billion people in the world right now who have not died, proving that wrong. And I said, I'm not sure of that logic, but whatever. He just

He just keeps going. Listen, it's been a real pleasure having you on the show. You've got a great energy. I think you've really got a good reputation in the field. I love your insights. Thank you so much for sharing them. We can't have you back because, as I say, we're winding down. But you and I will certainly cross paths again.

It was nice seeing you out in Winnipeg. Yeah, it was great. Thank you so much for having me come on. This has been a highlight for me. Your book was one of the first books I got when I became a planner. So this was a real treat for me. Thank you so much. Would you rank this above or below working at Eastside Muriel's?

Dave, I love it. It's below. I know. It's a bit longer. Worst part of starting this career was having to give that up. I would have stayed a little longer. You know what's funny, by the way,

for our listeners is Adam's being very serious about that. When he and I were talking, he really learned a lot about service, connecting, relationships, having to hustle, attention to detail. Like,

he went on and on and on about the wonderful experience of was working at East Side Mirros. He's not kidding or being insincere about any of that. That was a life-changing experience for him. And all my good friends, that I still, my best friends are still the ones I met there. Yeah, that's very cool.

You're very well liked and very well respected. So it's great to have you on the show. Be well. Thanks, Dave. Take care.