Pensions were the untold story of retirement planning until The Pension Puzzle
. When financial advisers talk to clients, they often concentrate on personalized retirement programs in order to sell mutual funds and other investment vehicles. But a retirement plan should be much more. It's often referred to as a three-legged stool: the personal plan is one leg, government-generated income (Old Age Security and the Canada Pension Plan) is another, and employer-generated pensions represent the third leg. With the amount of attention RRSPs get, you would think that they're the main part of the system. But consider that 95 per cent of Canadians get a government pension and 40 per cent are in employer-sponsored pension plans. These make up a significant part of a retiree's income, in many cases more than personal savings. The Pension Puzzle
covers the neglected legs and how pensions contribute to a solid retirement foundation. Part 1 explains the ins and outs of the pension system. Part 2 gives answers to commonly asked questions, such as what if you retire early, what if you are highly paid, what if you split up with your spouse, and what if your employer goes out of business. It includes forms and worksheets, and a whole slew of valuable Internet links.
You might think that because of government involvement you can sit back in your lawn chair and wait for the money from CPP and OAS to pour in when you turn 65, or whenever it is you plan to retire. But it's more complicated than that. The Pension Puzzle explains how to shelter your pension from taxes, what happens if you decide to retire early or late, how to manage it as you balance the other two legs of your plan, and other contingencies. Fear mongerers (especially those who disparage government intervention) would have you believe that government pensions will go broke before the current bulge of baby boomers can collect. But the authors--personal finance journalist Bruce Cohen and actuary Brian Fitzgerald--show that there is no chance the system will break down. They also illuminate the complexities of employer-sponsored pensions, including the pros and cons of defined benefit and defined contribution. (The authors conclude that defined contribution is more advantageous early in your career when you are more likely to move around, while defined benefit is better when you are older and less likely to switch jobs.) In all, Pension Puzzle is the definitive primer for getting the most out of your various pensions. --Edward Trapunski
"The Pension Puzzle
is destined to become the definitive reference book on retirement plans for financial advisers and their clients."
— Jonathan Chevreau,
The National Post
"Spending each day as you choose and getting monthly cheques to pay for it is neither boring nor painful, yet the mention of pensions brings on tension. Bruce Cohen and Brian FitzGerald are right on the money with a sensible, straightforward, and practical guide to how much you can expect, where it will come from, and whether it will be enough. Don't leave work without it."
— Michael Kane, The Vancouver Sun