Currently, mortgage rates are historically low, even though last week we saw the end of the competitive 2.99% for 5 years. After the Feds announcement in the U.S. to keep interest rates low until 2014, people are becoming hopeful that ours will also remain low until 2014. We are now getting used to the new norm. This is dangerous as interest rates will go up, but when, I would guess, nobody knows!
Over the weekend I watched an interesting CBC news report on the upcoming RRSP season. We are being told that we have to be more conservative when calculating our investment returns. Warren MacKenzie, of Weigh House Investor Services, said; “It would be unwise to assume an eight per cent average (return) over the next 15 to 20 years. I think we’re in for some tough times”. So where should our projections be at? According to PWL Capital’s Justin Bender: “Financial planners using more than a 4 per cent to 5 per cent rate of return for their projections (after fees) may be overstating the return that their clients can reasonable expect.”
I was taught to start saving for your retirement from your first pay cheque. I am hoping to hear how YOU are saving for your retirement. Let’s try and get some ideas flowing. I will share these ideas with everybody (names will be kept confidential). I guess you won’t be surprised to hear that I think purchasing a rental property is a good way to plan for my retirement income. I was thrown into this by accident. After renting an office in a plaza that held a major bank, the bank had my lease terminated as they believed I was effecting their mortgage sales. It’s a long story … I ended up purchasing a unit where I operate my office and also lease an apartment above. After the fact, I realized that the bank did me a huge favour!
I believe now is the time we all should be extremely aware of our own retirement planning particularly when we hear Prime Minister Harper say: “We’ve already taken steps to limit the growth of our health-care spending. … We must do the same for our retirement-income system.”
Let’s hear some thoughts