The Unconventional Conventional, Part II

In my inaugural post of last week I brought up the idea that there may be some unconventional ideas that should not be overlooked in the quest for financial independence. However, before anyone would attempt to apply any unconventional strategies one must first be comfortable with the idea of seeking out alternative strategies, doing the due diligence to decide whether the strategy has any merit before making the decision to put the strategy into action. The new plan may exist alongside conventional methods of retirement planning until it has been compared for at least a few years with the regular strategy. The objection here may be that there is insufficient cash flow to include an unconventional strategy, however, one could decide to reduce the conventional contribution and allow for the total commitment to remain the same. For example,one could reduce the amount of an RRSP contribution by half and use the redirected cash to fund the newly implemented secondary strategy. Before I get too far into this discussion we must agree that the unconventional strategy is being applied, at the very least, to meet the goals of the conventional strategy, which is a sufficient reserve of capital to provide income for retirement.

In fact, this may be a good time to review why an unconventional method is being considered in the first place. Outside of the fact that many Canadians do not feel that they will retire financially independent, what other considerations are important when seeking out an alternative strategy? To me, it’s the tax issues. Do I still get a tax deduction? What is my net after tax cash flow? How much can I actually spend? What are and do I lose any other benefits when I implement a new strategy?

This is where I would like to get some input from Financial Advisor’s, what alternative strategies do you offer clients outside of traditional RRSP and insurance solutions for creating a retirement fund? Please keep in mind that we are not overly concerned with those that will have a secure retirement and that we are concentrating on those that want to retire with financial dignity on reduced resources.

For those of you who are seeking financial advice, what strategies does your Financial Advisor bring to your attention? Are they all just the conventional plans or is there something special that you are doing? What strategies have you implemented on your own? Do you feel that your plan will assure your lifestyle during your golden years? I await with anticipation. Thank you.

Copyright 2012 Richard M. Kiernicki. All Rights Reserved.

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