Author: Maurie Backman

If you’re a young adult and feel like your finances aren’t in order, you’re not alone. A 2024 Bank of America survey found that 52% of Americans aged 18 to 27 say they don’t make enough money to live the life they want, and that sky-high living costs are a top barrier to financial success.

Furthermore, adults in this age group are delaying major financial milestones, such as buying a house and saving for retirement. And 46% have to rely on financial support from parents and family just to stay afloat.

Let’s say you’re 27 years old and ready to get serious about your finances, but are struggling to get by with the high cost of living. Here are some steps you can take toward securing your financial future en route to achieving major life goals.

Emergency fund

One of the most important things you can do right away is get started on an emergency fund. This is cash you can easily access in case something unexpected happens, such as losing your job. Having a cushion to fall back on can help prevent you from falling (further) into debt.

Many experts recommend stashing away three to six months’ worth of expenses, however, since you’re just starting out you might want to think a bit smaller. Personal finance expert Dave Ramsey, for example, recommends setting aside $1,000 at first. Over time, you can build up your emergency fund. Since this cash isn’t meant for everyday spending, it’s also a good idea to keep it in a high-yield savings account so it can earn interest.

Tackling debt

Take a look at your debt situation. You may already be on a payment plan when it comes to student debt or auto loan debt. But if you have any high-interest debt, including credit card debt, it’s in your best interest to pay it off as quickly as possible. The last thing you want to do is continue digging yourself a bigger hole. Come up with a plan to tackle your debt so you can get to saving. Drawing up a budget with this goal in mind may be helpful.

Saving for retirement

Does your employer offer a 401(k) plan? If so, you can sign up and direct a portion of your paycheck, pre-tax, into an account and invest it in the market. This is a good idea especially if your employer offers matching contributions (up to a certain percentage of your pay), which essentially amounts to free money. It’s recommended you contribute as much as you can afford, at least up until the maximum employer match amount.

Otherwise, you can start building your retirement savings through an individual retirement account (IRA), which can also be invested in the market. Keep in mind there are yearly contribution limits for 401(k) and IRA accounts.

Long-term goals

At age 27, you still have most of your adult life ahead of you, but you may have long-term goals beyond achieving financial security. These can include starting a family, buying a home or simply generating as much wealth as possible. A financial adviser can help you plot a path toward achieving them.

Think about how your finances might impact your life goals. There are costs associated with many personal milestones, so look at the big picture in the course of mapping out your long-term plan.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Your dream plot of land may be nothing more than a scam.

Lisa Shaw has been selling properties in suburban New Jersey for more than two decades. When she was contacted by a Canadian citizen living in England to get help selling his Randolph, NJ plot of land, she didn’t immediately suspect something fishy was going on.

She told ABC News the property owner claimed his wife was ill and he needed the money to pay for her care. So Shaw did what she usually did. She asked for documentation from the seller, and he sent over copies of driver’s licenses. She then proceeded to look for a buyer.

What she didn’t know at the time was that the identification cards were fake and she would ultimately end up falling victim to a real estate scam — one tied to an alleged international crime web that authorities say involves fake documents ranging from Canada to Vietnam.

The FBI reported a 500% increase in vacant land fraud over four years, according to the ABC News report from September.

Real estate scams are sweeping the Northeast, FBI Senior Agent Christopher Peavey recently told CBS13. The news station reported on another case of scamsters pretending to be landowners and using fake drivers licenses in Maine, where over 260 people have lost a combined $6 million to real estate scams since 2019, per FBI data.

If your land is fraudulently sold like this, you have to file a civil lawsuit to reclaim what’s yours. “… because you’re taking a property that someone lawfully owns, most of the time they’re going to get it back. It’s the headache, the hassle and this third-party victim who thinks they’ve purchased it, so there is a lot of loss that can occur,” said Peavey.

In December, Atlanta News First Investigates also discovered sham sellers near Barnesville, a rural county south of Atlanta.

“That set off the red flag”

The Randolph property Shaw was being asked to sell was actually owned by a couple from Texas. When the driver’s licenses arrived, they had the names of the real owners, but the wrong addresses. Those IDs turned out to be totally fake.

"Everything looked fine," Shaw said. She listed the land and received multiple offers, and no one had any reason to believe there was a scam at play.

"No one suspected it, not the attorneys, not myself, not the title company," she said.

Shaw’s seller was told the highest offer he received was $140,000, and he immediately accepted. The seller provided paperwork showing he had gotten the deed notarized at the U.S. embassy in Vietnam. Payment arrangements were made, with the seller asking for the $140,000 to be split evenly across two bank accounts.

But the title company had trouble submitting the second payment.

"That set off the red flag," said Shaw, who explained that the title company was then able to get in touch with the son of the real owners of the property. "We knew it was definitely identity fraud."

But by then, the initial $70,000 payment had already gone through. The seller has since vanished, and the new buyer is now in a pickle.

Although the buyer is listed in municipal and county tax records as the property’s new owner, it’s unclear as to who really owns the land, since the actual owner never agreed to sell it.

How to avoid real estate fraud

When it comes to real estate fraud, the stakes can be very high, and victims stand to lose a lot of money. So it’s important to know what red flags to look out for and what to avoid.

"Your gatekeeper is essentially the realtor who has to verify who is selling the property. Once it’s in the process where it’s going to a title company, they’re very sophisticated with docu-sign, with impersonating notaries public, that it’s almost impossible to stop it once it’s down the road," Peavey said to CBS13.

Make sure the real estate agent meets the seller in person, even though it’s not totally uncommon to conduct real estate transactions remotely, and not every sale from afar will be fraudulent. Another red flag to look out for is a seller who seems to be in a sudden hurry to sell.

What a thorough agent can try to do is go out to the site and ask the owner to verify specific details that would only come from having seen the property in person. If they can’t answer specific questions, it should raise a red flag. They can also ask for copies of recent property tax bills, look up the phone number by reverse search and call notaries to confirm that their signatures on documents are valid.

Landowners should also be vigilant and check property records. They can also set up title alerts with their respective county clerk’s offices so they’ll be informed if a title search comes up. However, not all counties offer this service. Landowners can also set up online search alerts for their properties.

"Vacant land is very easy to steal because not everybody is going to be checking up on a vacant piece of property once a month," said Emily Bowden, executive officer of the Sussex County Association of REALTORS in New Jersey, told ABC News. "Not everyone who owns that land necessarily lives in our area."

Now, Shaw is on a mission to educate other real estate agents about scams like the one she fell victim to.

"If you have a piece of property that someone wants to sell and it’s vacant property, really, really get your feelers up," she said.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

If you haven’t started investing in the stock market, you’re not alone. Nearly half (48%) of American adults don’t have any investment assets, according to a 2024 report by asset management firm Janus Henderson. The reasons why included a preference for more accessible assets like cash, being in debt or not understanding how to invest.

Furthermore, while a poll by CNBC and Generation Lab in 2024 found 63% of Americans aged 18 to 34 believe the stock market offers great opportunities to build wealth, many are not participating, and 61% are not saving for retirement each month.

If you’re 32 years old and haven’t begun investing yet, you may have spent the first decade of your career missing out on a great opportunity to generate wealth. But it’s not too late to get in on the action. Here’s why it matters if you start investing early, and how you can get started.

The importance of investing early

One reason many people end up with little savings by the time they retire is that they don’t start early enough. But at 32, you have one huge thing going for you — time. The sooner you start investing, the more time your wealth has to grow. So, it’s important to take advantage of your age.

Let’s imagine you start contributing $500 a month toward retirement at age 32, and you continue to do so until age 67. Let’s also assume that your portfolio generates a yearly 7% return, which is a bit below the stock market’s average performance.

After 35 years of compounded returns, you’d be looking at a nest egg worth about $830,000. That’s over four times the median retirement account balance among Americans of that age group, according to Federal Reserve data.

But if you had waited to start investing at age 42, for example, generating that same yearly 7% return, by age 67 you’d have about $380,000. Even though you contributed $60,000 less income over 10 years, that missing $450,000 is the cost of lost time compounding gains.

It’s also important to invest at a young age in order for your savings to outpace inflation. As the purchasing power of a currency erodes over time, it helps to earn more than any value lost.

Investing for the first time

First, you’ll want to find the right home for your investments, and your best bet is to first exhaust tax-advantaged accounts before moving on to taxable accounts.

If you have access to an employer-sponsored 401(k) retirement plan, at age 32, you can contribute up to $23,500 of your salary, pre-tax. Furthermore, if your employer offers a contribution match program you should take advantage of it as much as you can, as it’s essentially free money. These plans generally come with investment options so you can choose from a curated list where to invest your savings.

You may also want to put any savings into an individual retirement account (IRA), which has a contribution limit of $7,000 if you’re 32 years old. Traditional and Roth IRAs have distinct tax advantages, but funds in either type can be invested in the market.

If you’re able to max out an IRA or 401(k) and have funds to invest beyond that point, you can turn to a taxable brokerage account. There are no annual contribution limits associated with taxable brokerage accounts, however, any contributions are made with after-tax funds.

From there, it’s a matter of figuring out your risk tolerance and where to put your money. But one thing even the experts agree on is the importance of maintaining a diverse mix of assets within your portfolio so you aren’t as vulnerable if any investments go south. You can achieve this by buying stocks across a range of industries, or even blending in non-stock options such as bonds.

One way to make things a little simpler is to invest in index-tracking exchange-traded funds (ETFs). These can give you access to a range of publicly traded companies. For example, an S&P 500 index fund can give you a piece of each of the top-performing companies on the U.S. market. Legendary stock-picker Warren Buffett himself recommends index funds for everyday investors.

Keep in mind, however, the stock market has both good years and bad years. Even though, historically, the S&P 500’s average annual return rate is above 10%, past returns don’t guarantee future gains. But the longer you’re invested in the market, the more time you have to realize gains and recover from losses, which is another reason youth works in your favor.

If you’re still unsure, it’s not a bad idea to talk to a financial adviser, especially if you don’t know much about investing and are worried about making poor choices. An adviser can help you make the most of your portfolio so it grows enough to allow you to meet your financial goals.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

A 2024 CPP Investments survey found that Canadians think it will take $900,000 to retire comfortably, a 29% increase from the year prior.

But a 2024 Statistics Canada report revealed that the median nest egg that Canadians have saved for retirement is $573,040. So clearly, the typical retiree has a large gap to overcome.

If you’re retired with a $3 million portfolio, you’re clearly ahead of the curve. Not only do you have way more assets than the typical Canadian senior, but you also have more than the $900,000 per person that’s supposed to make for a comfortable retirement.

But you may be wondering if it pays to hire a financial planner to help manage your retirement portfolio. And the truth is, there are pros and cons to getting financial help.

Using a financial planner

If you have $3 million in assets, a paid-off home and no other major financial concerns, you might assume that you don’t need a professional to get involved. But there’s a reason 25% of Canadians have a financial adviser or planner, per research from CIBC and FP Canada.

The upside of working with a financial professional is that you’ll have an expert who isn’t emotionally attached to your money offering advice on how to manage your assets. That could be invaluable, especially if life ends up throwing you a curveball.

Things may be going well for you financially right now. But what if your life circumstances change, or your health declines and you wind up needing long-term care?

If you’re uninsured, you could be looking at spending anywhere between $3,500 to $30,000 per month for a home health aide, a Scotia Wealth Management report found. A financial adviser or planner can help you not only prepare for these types of costs, but manage them as they arise.

Also, while you clearly have a decent understanding of saving and investing to have amassed $3 million in time for retirement, there may be some blind spots in your portfolio. A financial professional can help address those and make sure your portfolio is set up to not only produce income, but withstand a major market event or a period of rampant inflation.

Furthermore, if you have $3 million, it’s feasible that you may be in a position to pass on an inheritance, and the value of $3 million today is not the value of $3 million in the future, especially if inflation soars. A financial adviser can guide you on estate-planning options so you’re able to make sound decisions for the type of legacy you wish to leave behind.

Finally, working with a financial adviser could help you feel more secure as you navigate your senior years; it takes the pressure off you to be the expert and to stay current.

Managing your finances solo

The obvious downside to working with a financial professional is that there is an additional cost involved. And that cost can vary depending on who you use, where you’re located and the fee structure your adviser employs. If you manage your finances on your own, you won’t have to pay a professional any fees.

Let’s say a financial adviser charges you a fee of 1% of assets under management. For a $3 million portfolio, you’re paying $30,000 a year for help you may not need.

Granted, because many financial advisers get paid as a percentage of assets under management, they’re motivated to grow your portfolio so they get paid even more. But once you’re retired, you may not need portfolio growth so much as stable income. And if you’re already getting that, there may be little sense in bringing in an adviser.

If you’ve been able to comfortably build and manage your portfolio all of these years, then you may be perfectly equipped to continue doing so — especially if you’re a savvy investor with a pulse on the market who understands the importance of diversification.

Furthermore, while a financial adviser can offer guidance on estate planning, you’ll typically still need an attorney to create a will or trust (or whatever tool you use to pass down an inheritance). So while a financial professional can perhaps steer you toward your ideal option, you’re probably going to be looking at a separate attorney fee anyway.

Before you make your decision, it could be worth sitting down with an adviser or two and seeing what they have to say. But if you’ve gotten to $3 million and are managing this well, you don’t necessarily need to hire someone for extra help at this point. Just be sure that before making any major money moves, you’re as informed as possible. You’re essentially your own adviser.

Sources

1. CPP Investments: Nearly 2 in 3 Canadians worry about retirement savings: survey (Oct 30, 2024)

2. Statistics Canada: Assets and debts held by economic family type, by age group, Canada, provinces and selected census metropolitan areas, Survey of Financial Security (x 1,000,000) (Oct 29, 2024)

3. Cision: Most Canadians are going it alone when it comes to financial planning: CIBC and FP Canada™ Poll (x 1,000,000) (Nov 27, 2023)

4. Scotia Wealth Management: Why aging at home is unlikely for many — and how to change that (Jan 9, 2024)

This article Retired at 67 with a $3 million portfolio and a paid-off house. Is it worth the cost to get a financial planner to ensure our nest egg will last? originally appeared on Money.ca

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Warren Buffett is not only one of the savviest investors of our time, but also one of the wealthiest. Known as "The Oracle of Omaha," he has an estimated net worth of over USD$160 billion. One reason why he’s gained such a dedicated following is because of he doesn’t chase returns but, rather, advocates for simple, cost-effective investing strategies.

"There’s huge amounts of money that people pay for advice they really don’t need … In my view, for most people, the best thing to do is to own the S&P 500 index," Buffett declared in a statement in May 2020.

Buffett has also famously revealed that 90% of his wife’s inheritance will go into an S&P 500 index fund. So he’s clearly a big fan of this strategy.

But SEC filings data recently revealed that Buffett’s company, Berkshire Hathaway, unloaded its entire positions in the Vanguard S&P 500 ETF and SPDR S&P 500 ETF Trust — two low-cost exchange-traded funds (ETFs) the company had previously held for years. And that’s a move that may be spooking investors and causing them to question their own portfolios.

Why Buffett just dumped the S&P 500

Buffett didn’t explicitly say why his company chose to completely exit two established S&P 500 ETFs last quarter. But there are a number of reasons why he may have gone this route.

"… this could indicate concerns about market valuations, increased volatility, or even a shift toward individual stock selection over broad index exposure," said Daniel Milks, founder of Fiduciary Organization & Woodmark Advisors, to etf.com.

Just because Buffett recommends that the typical investor put their money into the S&P 500 doesn’t mean that’s the strategy he needs to utilize. Buffett knows a lot more about investing and analyzing businesses than the typical person. So he doesn’t need to fall back on the broad market the same way an investor with minimal knowledge might.

Also, the shares of S&P 500 ETFs that Buffett dumped were, collectively, a pretty small position for Berkshire. It’s possible Buffett and team have exited small positions that don’t have a major impact on performance as a means of cleaning up their company’s portfolio, something they’ve reportedly done before.

"Given Warren Buffett’s history of emphasizing long-term investing, this isn’t necessarily a warning sign for retail investors to panic," Milks explained. "Instead, it may reflect Berkshire’s preference for direct stock holdings or a belief that certain sectors within the S&P 500 are overvalued."

Should Buffett’s S&P 500 exit sound alarms about a market crash?

Buffett dumping his company’s S&P 500 ETFs and other stocks, as well as his growing cashpile, may cause investors to worry he’s anticipating a near-term market crash. Last quarter, Berkshire sold its entire stake in Ulta Beauty, and trimmed its stakes in Bank of America, Citigroup, Nu Holdings, Charter Communication and Capital One.

"What’s more notable is that Berkshire sold significant stakes in individual companies that make up a large portion of these ETFs and the broader indices they track. That’s where the real attention should be," Melissa Caro, founder of My Retirement Network, told etf.com. "Selling SPY and VOO doesn’t necessarily imply a bearish market outlook, but trimming major individual holdings could signal something about Berkshire’s view on specific stocks or sectors."

In a recent BofA Global Fund Manager Survey, 89% said U.S. stocks are overvalued, representing a 24-year high.

But Buffett has long acknowledged that no one can predict where the stock market is going in the near term. So rather than give into fears, his advice to investors is to hold onto investments with good fundamentals for decades, relying on the fact that the stock market, broadly speaking, has a long history of recovering from downturns and rewarding investors who stick with it.

If you’re worried about a near-term stock market crash, rather than panic, remind yourself of your long-term investing goals and make sure your portfolio suits your investment horizon.

If you’re investing for a retirement that’s 20 or 30 years away, there’s no sense in reacting to any sort of near-term market event – hypothetical or actual. What you should do, though, is make sure your portfolio is well-diversified and balanced. The nice thing about adding index funds is that they give you instant diversification. Just make sure you don’t have much portfolio overlap.

Sources

1. etf.com: Buffett’s Berkshire Sold Off SPY, VOO Holdings in Q4, by DJ Shaw (Feb 21, 2025)

2. Axios: Investor fears on overvalued U.S. stocks at 24-year high, BofA says, by Ben Berkowitz (Feb 18, 2025)

This article Warren Buffett dumped 2 US-based investments he’s long recommended — should you follow his lead? originally appeared on Money.ca

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Close to retirement with a nest egg of more than $2 million? No wonder you’re thinking about retiring! To put this in perspective, you’re 58 years old with a $2.5 million saved in an investment portfolio — this is more than four times the savings for the average Canadian. According to Statistics Canada, the average nest egg is closer to $573,040.

But wait, there’s more! Once you’re 60, you can start collecting payments from the Canada Pension Plan (CPP), albeit at a reduced rate. If you opt to hold off collecting CPP (you can delay until age 70), the more government payment you’re entitled to each month.

Based on these factors, there’s a really good chance that you might be able to live off of the dividends produced by your investment portfolio without touching the $2.5 million principal, but you still need to manage your portfolio and make smart money decisions.

Pay attention to diversification to keep your dividend income up

With a dividend yield of at least 3.2%, a $2.5-million portfolio could easily generate $80,000 in annual dividends. That kind of yield is doable if you diversify beyond a basic broad-based exchange-traded fund (ETF) and focus on stocks and other assets with higher-than-average dividends.

For investors comfortable with picking and trading stocks, keep in mind that over time a portfolio loaded with growth stocks can experience more volatility due to market growth. For instance, the value of specific stocks in your portfolio can grow so much that the portfolio is overweighted with certain holdings or assets. Also, companies experiencing rapid growth and accelerated gains don’t always pay high dividends because they reinvest their profits to fuel growth and boost stock prices. Plus, companies are not obligated to raise dividends over time, nor are dividend increases guaranteed to match inflation.

For that reason, you need to keep tabs on a portfolio of dividend-paying stocks. A good bet is to rebalance your portfolio on a quarterly basis — either on your own or with a financial adviser.

Another good option is to add other income-generating asset, such as REITs, or real estate investment trusts. REITs are a great choice for those seeking regular income since REITs are required to pay out 90% of their taxable income to shareholders each year. That means adding REITs into your portfolio will help keep your monthly income stable and allow you to avoid dipping into the principal to pay living expenses during your retirement years.

Keep an eye on inflation

Inflation could impact your investment income dramatically. For instance, if you collect $80,000 in income from your portfolio when you’re 60, and collect the same amount when you are 80, inflation over the years will erode the purchasing power of that money and force you to adjust your spending as time goes on — or dip into your principal investment amount.

The Bank of Canada and the federal government has long targeted a 2% annual inflation rate, the midpoint between 1% to 3%, but even a 2% inflation can erode the spending power of $80,000. And things can happen. Remember that the stimulus policies amid the pandemic rapidly drove the cost of goods and services above 2% and other circumstances can always prompt quick price increases.

Consider taxes

Consider tax implications in your dividend calculations. If the dividends are distributed in a non-registered account, you’ll have to pay full tax on the earnings. The good news is the Canada Revenue Agency does tax dividend income more favourably than other forms of income — as long as the dividends earned meet the CRA’s criteria.

Another option is to shelter your earnings in a registered account, such as a registered retirement savings plan (RRSP) or Tax-Free Savings Account (TFSA). Just be sure you understand when and where it make sense to shelter dividend income in a registered account. To help

On the other hand, if you have a traditional RRSP, you only pay taxes on dividends when you withdraw them.

Your taxes will depend on your filing status and income, as well as what tax thresholds look like in the future. If you’re a single tax filer and your income is between $57,375 and $114,750, then you’re looking at a tax rate of about 7.56% for eligible dividends and 13.19% for non-eligible dividends. Remember that tax laws and rates can change over time. It’s a good idea to consult a financial adviser to plan your short- and long-term retirement strategy.

Sources

1. Statistics Canada: Assets and debts held by economic family type, by age group, Canada, provinces and selected census metropolitan areas, Survey of Financial Security (x 1,000,000) (Oct 29, 2024)

2. Tax Tips: Canada 2025 and 2024 Tax Rates & Tax Brackets

This article I’m 58 and plan to retire in 5 years with a portfolio worth $2.5 million. I expect annual dividend income of $80K but worry this strategy too riskyoriginally appeared on Money.ca

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

At 60, if you have $1.2 million saved for retirement, you have more than double as much as most of your peers, according to Statistics Canada.

But even though that’s a lot of money, it’s important to manage your sizeable nest egg carefully. You could try to live off of dividend income from your portfolio, or draw down your total portfolio over time.

Living off of portfolio income alone

A 2024 CPP Investments survey found that 61% of Canadians are more worried about running out of money during retirement.

The nice thing about living on portfolio income in retirement is that you aren’t touching the principal, meaning it should, in theory, hold steady or grow rather than shrink.

But it takes a lot of principal to generate sufficient income to live on, especially when dividend yields are as low as they are today.

The average S&P 500 dividend yield is currently just 1.27%. Even if you assemble a portfolio of individual stocks with higher dividend yields, you may only be looking at 5%.

For a portfolio worth $1.2 million, that’s $60,000 in annual income, which may or may not be enough to maintain your lifestyle.

Of course, it’s not a good idea to keep your entire portfolio in stocks. A safer bet is to split your assets between stocks and bonds, which could produce a little under a 5% return. It is doable, but whether the income suffices depends on your income-related needs.

Keep in mind you’ll have CPP benefit, as well. With the average retired worker collecting about $808 per month or up to $1,433.00 if you delay receiving it, you could be looking at up to $17,200 in benefits annually.

When you combine these government pension earnings with your investment portfolio income that works out to just over $77,000 in retirement income, each year.

But there’s one big caveat: While living on your portfolio income allows you to preserve your principal investment portfolio, to a degree, neither growth of that portfolio nor income generated from the portfolio are guaranteed.

Market volatility means your stocks could fall in value, eroding your principal. Stock dividends aren’t guaranteed the way bond interest and principal are guaranteed, assuming you hold the bonds to maturity.

The other risk of an income-only approach is that you could lose purchasing power over time due to inflation, which drives living costs upward. Assuming the income you earn from your portfolio holds steady at $60,000 per year, this may be adequate when you start retirement, but find it doesn’t stretch far enough a decade or two into retirement.

The “total return” approach

Another option is to live on income and principal from your portfolio — the “total return” approach — as you whittle down your principal while enjoying dividends.

This is a more flexible approach. You can sell principal assets and take advantage of market gains. As your portfolio grows, a total return approach gives you access to more annual income, making it easier to keep up with inflation.

Here’s how this might work. Say you have $1.2 million and you decide to follow the 4% rule, drawing down 4% of your principal annually to ensure your savings last 30 years. In your first year of retirement, you’d receive $48,000 of annual income. If inflation then rises 2% the next year, you’d withdraw $48,000 plus another 2%, or $960, for a total of $48,960.

As your portfolio gains value, you can keep adjusting your withdrawals for inflation, making it easier to keep up with the cost of living.

The 4% rule is just a guideline. There are other factors to consider as you determine your withdrawal rate: market conditions, your investment mix, and your life expectancy.

For example, Morningstar found that a 3.3% withdrawal rate was optimal for retirement savings in 2021; 3.8% in 2022; and 3.7% in 2024.

This means that while the “total return” approach offers more flexibility, it requires an ability to constantly adjust to market conditions and your personal needs. It’s a good idea to enlist the help of a financial adviser who can help you adjust your withdrawals as needed.

In this approach, too, if your portfolio loses value, you may have to withdraw less temporarily until the market settles. It’s wise to have one to two years’ worth of living expenses in the bank so you can leave your portfolio alone for a period of time if need be.

It’s also important to have income-producing assets in your portfolio that help it gain value from year to year. Dividend and interest income could help offset market losses.

So all told, no matter which approach you take, the right investment mix is crucial.

Sources

1. Statistics Canada: Assets and debts held by economic family type, by age group, Canada, provinces and selected census metropolitan areas, Survey of Financial Security (Oct 29, 2024)

2. Y Charts: S&P 500 Dividend Yield

3. Government of Canada: CPP Retirement pension: How much you could receive

This article I’m 60, ready for retirement with $1.2M saved. I plan to live off dividend income — not sell assets. Is this really more risky than a ‘total return’ approach? originally appeared on Money.ca

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Travis Kelce, along with the Kansas City Chiefs, suffered a crushing loss at Super Bowl LIX after being obliterated 40-22 by the Philadelphia Eagles. But his brother, Jason, also turned out to be a loser over the course of that eventful weekend.

The retired NFLer revealed that he lost "all my money" gambling while in Louisiana, New Orleans, for the big game Feb. 9.

"Casino’s right next door, and because I won so much money last year at Las Vegas [at the Super Bowl], I thought, ‘You know, hey, we’ll just keep this rolling, this will be great,”’ he recalled during an episode of the "New Heights" podcast he hosts along with Travis.

But the magic didn’t work this time. He described one point while playing craps as being "a bigger bloodbath than the game."

Jason failed to take his own advice before hitting the tables.

"I don’t normally go to the casino," he said. "It’s just like handing them money."

Fortunately for Jason, after earning USD$80-plus million over 13 years as a player, alongside finding lucrative work as a podcaster and TV commentator after football, he likely can absorb the loss.

Why people lose money gambling

According to Statistics Canada, nearly two-thirds of Canadians aged 15 or older reported gambling in 2022, and 1.6% of them were at a moderate-to-severe risk of problems related to gambling.

And with at least some form of legalized gambling — including province-run lotteries — available in every province and territory, it’s easy enough for Canadians to get access and potentially fall victim to it.

The problem is that gambling can lead to serious financial losses. Even one-off gambling events can have serious consequences, such as what happened to Jason.

Part of the trap he fell into may have been due to a cognitive bias known as the availability heuristic, which has people making decisions based on information that’s easily available or top of mind as opposed to data or hard facts.

Jason indicated he went on a winning streak at the previous year’s Super Bowl. He relied on a previously positive outcome to guide his decision-making at this year’s event instead of looking at the facts, which dictate that over time, you’re more likely to lose money at a casino rather than win.

Ways avoid losing money gambling

Jason isn’t the only celebrity to lose a large amount of money gambling. Actor Charlie Sheen had a well-publicized gambling problem, and hip-hop artist Drake has been known to bet hundreds of thousands of dollars on sporting events

One of the problems with gambling is that it can start as a social activity and turn dark quickly. It can be hard to say no when friends invite you to a casino to celebrate a birthday or bachelor party.

To that end, one thing you may want to do is only bring cash with you to a casino. Decide how much money you can lose without it being painful, and bring that exact amount with you only. Leave your credit and debit cards at home to avoid the temptation to gamble more or "win back" your losses.

Another option, of course, is to just say no to gambling altogether if it’s something you’re not comfortable doing. It’s okay to opt out of social situations that aren’t within your comfort zone.

It’s also important to recognize when you or someone you love has a problem with gambling. Even a "mild" problem could upend your finances.

As a starting point, if you feel an intervention is needed, you can call the toll free help number in your province to get connected with help. You can also look into local counseling centers that focus on gambling addictions.

Sources

1. YouTube: Jason reveals the sketchy place he loved on his food tour and how much he lost in New Orleans by New Heights (Feb 17, 2025)

2. Statistics Canada: Who gambles and who experiences gambling problems in Canada (Aug 9, 2022)

3. Responsible Gambling: Find Gambling Help for Canadians

This article Jason Kelce says he lost ‘all my money’ in New Orleans at Super Bowl LIX — at one point it was a ‘bigger bloodbath’ than the Chiefs’ blowout loss. Here’s what happened and what you can learnoriginally appeared on Money.ca

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The only child trope of being the center of attention can suddenly take on a new meaning when they’re thrust into the sole beneficiary role.

Estate planning is rarely straightforward, even when you have just one child set to inherit everything. Without siblings to share the responsibility or the inheritance, your only child may face heightened scrutiny, added pressure or even envy from extended family members.

If your child finds themselves as the sole beneficiary of your estate, there’s less of a chance someone will contest your will. However, writing a will doesn’t cover all of your bases. Below, we discuss the benefits of considering another estate-planning tool instead.

The drawbacks of using a will

While creating a will can be quicker and less expensive than setting up a trust, there are some drawbacks to consider.

First, a will must go through probate once you pass, the legal process of validating the document in court after you die. Probate can be both a lengthy and expensive process. According to Trust & Will, probate fees consume 2% to 7% of an estate’s value, leaving only 93% to 98% for beneficiaries.

Furthermore, there’s always the risk of the will being contested, which can prolong the probate process. While probates are typically wrapped up within a year, a contested will might take longer to resolve.

To avoid these issues, you might consider setting up a living trust — even if you only have one beneficiary.

According to a 2024 LegalZoom report, about 75% of estate plans created in 2021 used wills, while only 19% used trusts. This is because creating a living trust through a traditional law firm can be quite expensive. The National Council on Aging estimates the cost to set up a living trust to be up to $3,000, while the cost to maintain it can range anywhere from $2,500 to $7,000.

This disparity might also stem from the misconception that trusts are only for the ultra-wealthy. In reality, trusts can be beneficial even for modest estates. Plus, you don’t need to strain your bank account to create a living trust.

With Ethos Will & Trust, you can create a living trust online from the comfort of your own home in as little as 20 minutes. All documents created on the platform are vetted by experienced estate-planning attorneys — giving you complete peace of mind. You can also make unlimited updates forever as your life changes, helping you secure your legacy for your loved ones.

You can create a trust starting at just $349 with Ethos Will & Trust. Plus, if you’re not happy with the results, you can get a full refund within 30 days.

Living trust options

A revocable trust lets you maintain control over your assets as long as you’re alive. You can make changes, such as which assets are placed into the trust or who gets to benefit from the trust.

An irrevocable trust, on the other hand, cannot be changed without a court order or the approval of the trust’s beneficiaries. However, assets placed into an irrevocable trust are excluded from your taxable estate, potentially reducing estate taxes. This is especially advantageous for estates exceeding the federal estate tax exemption, which will be $13.99 million in 2025.

What if your estate includes property?

A big part of your estate might include a home you’re trying to pass down to an heir. Both a will and a trust can be used to pass down property, but each has its unique advantages.

If you use a living trust, you’ll maintain control over your home until your passing. There are other options available to you as well, each with its own benefits. For instance, a transfer on death (TOD) deed allows the property to pass directly to your heir without going through probate. This option keeps you in full control of the property while you’re alive.

If you are unaware of the multiple options for protecting and securing your estate after your passing, working with a professional financial advisor can be a great way to get educated. Arta Finance’s expert services can help you generate and pass on tax-advantaged wealth to your beneficiaries.

Accredited investors can connect with a family office that offers multiple services to help you consolidate your finances and secure your loved ones’ future. With Arta Finance, you get estate and tax planning, as well as financial advisory services — all in one place.

You can also invest in alternative and private market assets and structured investments, open a high-yield cash reserve account with up to 4.31% APR, or create a tax-advantaged life insurance policy through Arta Finance.

Create an account with Arta Finance and become a member in less than two minutes.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.