CALGARY – A long life of assorted jobs, good times, hard times, moves and mistakes can result in an investment portfolio that looks like a jumbled basement storage closet.
Your working life goal of accumulating as many assets as possible to build a nest egg for retirement ends along with your employment income when retirement day arrives at last.
Now, investment experts say, de-cluttering those tangled stocks, bonds, mutual funds and can’t-miss-opportunities — and making sense of them so they last at least as long as you do — is your most important chore.
“Many people, especially those who live here in Alberta, have had a lot of different jobs throughout their careers,” said Willis Langford of Langford Financial Inc., a retirement income adviser in Calgary.
“So they may come with a TFSA (tax-free savings account), RSP (retirement savings plan), they may have a LIRA, which is a locked-in retirement account, they may have a defined benefit pension plan, a defined contribution pension plan, plus they have non-registered accounts.
“And those, technically, could be all over the place in multiple carriers with financial institutions all across Canada.”
Returns are vitally important when accumulating investment assets but tax planning and managing risk gain priority when retirement becomes a reality, Langford said.
“If you’ve got things in your plan of action that don’t fit, you’ve got a mumble-jumble, you’ve got stuff bought over the years and nobody can remember why, you have to do something about that,” said Adrian Mastracci, Vancouver-based fiduciary portfolio manager for Lycos Asset Management.
“Quite often, people come in and they’ve got 30, 35 mutual funds. I have no idea how somebody can look after 30, 35 mutual funds. Or even 15.”
Cluttered portfolios are often marked by missing written plans, non-existent savings projections, too many scattered accounts and either too many or too few different classes of investments.
They can contain mutual funds where costs and exit charges are unclear. Or different funds that contain the same kinds of securities.
Both Langford and Mastracci recommend finding a single trusted adviser to look at the entire portfolio and give advice on how to clean it up.
They recommend choosing someone who is paid with fees, not commissions, to get the most unbiased recommendations.
The result should be a schedule of actions designed to provide maximum income and tax efficiency with the least amount of risk over the client’s expected remaining lifespan.
“How you take income from those sources will dictate how much taxes you pay over your lifetime. If you don’t do it right, you will pay more than necessary,” said Langford, adding improper tax planning can cost hundreds of thousands of dollars.
The adviser should be chosen for what he or she can do for you, said Mastracci. Different clients need different services depending on the size and complexity of their investment portfolio.
A good retirement planner should also be able to help the client track down investments he or she has lost track of by tracing past employers and going through records, he said.
He presented the example of a 65-year-old client whose goal is an income of $100,000 a year for the rest of his life.
That could mean 20 or 30 years or more, which is where the math gets complicated enough to test even the smartest non-professional investors.
“Chances are your portfolio will not receive any savings from you, the client, for that period of time,” Mastracci warned.
He added: “Sometimes you have to tell the client something he doesn’t want to hear.”
This report by The Canadian Press was first published Jan. 16, 2020.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
