The Retirement Time Bomb: How to Achieve Financial Independence in a Changing World

Sarah Robertson is editor of the Canadian Book Review Annual.

“You can’t take anything for granted when it comes to planning for
your future” is the key message of Gordon Pape’s latest guide to
retirement planning. In the book, the prolific financial author and
commentator outlines tried-and-true principles of personal financial
planning while stressing the need for current and future retirees to
closely monitor developments in the retirement landscape (especially
those pertaining to anticipated crises in private pensions and health
care).

It’s sound advice. Canadians are still experiencing the aftershocks
of the Conservative government’s decision—made on October 31, 2006,
after the publication of this book—to lower the boom on non-REIT
income trusts by eliminating their preferential tax treatment. In this
era of low interest rates, income trusts have played an increasingly
prominent role in Canadian portfolios, and their expected demise has
left retirees and other yield-starved investors scrambling for
alternatives. Inevitably, the Harper government’s Halloween surprise
seriously undermines The Retirement Time Bomb’s coverage of income
trusts; no one’s going to devote 50% of an RRIF portfolio, as the
author does in one of his examples, to this seemingly doomed asset
class.

As in Pape’s previous books, the target audience is not frugal
eco-freaks looking to drop out of the rat race and embrace early
retirement, but rather Canadians who want to spend their golden years
indulging in “such expensive luxuries as travel and a Sunbelt winter
residence.” To that end, Pape details the attractions of Florida and
Mexico as retirement destinations for SAD-afflicted Canadians. The rest
of his book offers sensible advice on everything from the limitations of
market-linked GICs to the non-suitability of RRSPs for low-income
Canadians. Inexplicably absent from his chapter on mutual funds is any
discussion of—and caveats about—fee-laden wrap accounts.

The income-trust debacle painfully illustrates Pape’s point that
“the only constant in life is change.” Luckily for his readers, the
retirement planning strategies outlined in this book are timeless.