Papyrus Planning Blog

The sky filled with lightning

When markets are stormy, take the opportunity to review your investment volatility

When stock markets drop, even just for a couple of days, it is a powerful reminder of just how important the ups and downs affect your retirement income.

It also shows how valuable the Canada Pension Plan, a workplace defined benefit pension or even annuities are to generate reliable, steady, consistent and predictable retirement income that you cannot outlive.

If you are retired or getting close to retiring, then you’ll want to pause to think about the impact of volatility on your income in retirement.

The tricky part of planning your retirement income is that it will never coincide with the stock market. When the stock market drops 3 per cent today and it just happens to be the same day when you sell some investments to create your monthly income, the stock market doesn’t care.

When you decide to make a large purchase like a vacation or a car or renovations on your home and withdraw the money today when the stock market drops 3 per cent, the stock market doesn’t care.

You’ll often here that stock markets will bounce back (many times true) but for you, today, you have possibly $5,000, $10,000, $20,000 or more fewer dollars invested in stocks that you hope will go up.

When you are looking at retirement income you want to last for 25 or 30 years, too many days like today where your life and the stock markets are not in sync, will cause shortfalls in the future.

So, when stock markets have a short term drop it is an important reminder that stock markets go up and down and this volatility can have a major impact on your retirement.

So, what can you do? Read More

Putting a price on something priceless

As I watched my oldest daughter dressed as Mary Poppins on her third birthday jump into a chalk picture I realized I would have paid any sum of money for that video.

You see, three days earlier we had an accident. Every video file I had of both my daughters was on an external hard drive that fell to the floor. I was in the middle of organizing them to then archive them before the hard drive stopped working.

I was thrown into a panic. I was sick to my stomach and knew not to try the broken hard drive too many times as it would reduce my ability to recover the files.

I started to go through every possible back up I might have. Over the next few days I began to recover most of the videos, but about a year could not be found. That year included videos of my daughters third and first birthdays.

My wife and I debated what to do. We were relieved the videos of our girls as babies were recovered. We also have all the photos we ever took as they were not lost. I had brought the hard drive to a local place to try and have it recovered. The cost would be $350 to buy the parts to try and repair the hard drive. If there was data recovered it would be another $750.

With no guarantee the files we were missing would be recovered, we debated whether the expense was worth it. It seemed like an expense that was not justifiable. We were both relieved to have recovered most videos, but wondered exactly what memories we were missing.

Well, as I watched my girl acting as Mary Poppins, something the photos and my memories just couldn’t capture, I realized this was really truly priceless. Knowing the videos that were missing now, I would have paid anything in retrospect.

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