I asked ChatGPT to predict my retirement and it helped calm my financial anxiety
The Globe and Mail
Zahra Khozema and her husband hope to retire in Cairo, Egypt one day, and are using ChatGPT for financial insight to help achieve this goal.
Ali Elmoudi/The Globe and Mail
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Globe and Mail
5 hours ago
- Globe and Mail
Worried about market turmoil, do Estelle, 62, and Blake, 54, need to work longer than planned?
Estelle is planning to retire from her management job in December, 2026, when she will turn 63. Blake, her husband, is 54 and plans to continue working for a few more years at his small business. Estelle is earning $108,000 a year plus a bonus of $16,500, bringing her total pre-tax income to $124,500. Blake earns about $60,000 a year working remotely. While Estelle participates in some group savings plans at work, neither she nor Blake has a defined benefit pension plan. So with all her savings tied to financial market performance, she is worried about potential market turmoil fuelled by U.S. tariff policies. 'Should I delay my retirement so as not to have to risk withdrawing funds at a loss?' she writes in an e-mail. Now with $4-million, what's the best way for Mike and Miriam to deal with their capital gains? How can Seth, 53, and Maeve, 54, reach their goal of spending $120,000 a year in retirement? Their retirement spending goal is $100,000 a year after tax. 'Is it feasible?' she asks. We asked Barbara Knoblach, a certified financial planner at Money Coaches Canada in Edmonton, to look at Blake and Estelle's situation. Blake and Estelle live in Toronto, where they own a small, mortgage-free house, Ms. Knoblach says. They have no children and no plans to leave an inheritance. After she retires, they plan to stay in their home and spend about six months each year living abroad. 'Since Blake's work is remote, he can operate as a digital nomad,' the planner says. Around the time Estelle retires, they plan to take a dream vacation expected to cost $60,000 to $65,000. Estelle participates in three employer-sponsored group plans, a defined contribution pension plan, a non-registered employee savings plan and an employee profit-sharing plan. She contributes 7.8 per cent of her base salary to the pension plan, with a matching 11.7-per-cent employer contribution. She contributes 5.8 per cent of her base salary to the employee savings plan. And her employer contributes 2.9 per cent to the profit-sharing plan. In total, around $30,500 is set aside each year across these plans. Both Estelle and Blake make long-term personal investments. They maximize their tax-free savings accounts annually. She contributes about $10,000 annually to a spousal RRSP for Blake, while he contributes $3,300 per year to his own RRSP and occasionally tops it up with surplus funds. Are they on track if she retires as planned and he works until age 60? If not, how much longer does he need to work? Does she need to work part-time? Ms. Knoblach modelled several potential retirement scenarios. They assume a 2.1-per-cent inflation rate, a 5.5-per-cent rate of return on their investments and that their funds last till he reaches age 95, after which they would still have the equity in their house. Scenario 1: Estelle retires at the end of 2026; Blake retires at age 60 in 2032. Assuming registered account contributions have already been made for 2025, they will add $13,300 to RRSPs and $14,000 to their TFSAs in 2026. From 2027 onward, their household income will drop, and no further registered contributions will be made. Blake's business income will cover household cash flow. The projection shows that they could support an after-tax, inflation-adjusted spending level of $96,500 per year, just under their $100,000 goal. 'This scenario therefore projects slight underfunding and feels financially tight,' Ms. Knoblach says. Regarding the upcoming dream trip, their travel account holds about $34,500 but isn't being consistently funded and has been used for smaller trips. To fully fund the trip, they'll likely need to dip into retirement investments such as Estelle's non-registered savings plan, which would further reduce their retirement income potential, the planner says. Scenario 2: Blake works to the traditional retirement age of 65 and retires in 2037. With Estelle retired and Blake working until the end of the year in which he turns 65, they could reach an annual retirement income of $104,000 starting in 2027 – even without further contributions to registered accounts after 2026. Scenario 3: Estelle retires in 2026 but does part-time freelance work. If she earns about $20,000 a year in freelance income for two years starting in 2027, their annual spending power would reach $98,200. 'This is still slightly underfunded,' the planner says. Scenario 4: Estelle delays retirement until the end of 2028. By staying in her career job until then, she could continue earning and contributing roughly $30,000 annually to her group plans, Ms. Knoblach says. The couple could also continue contributing to their own registered accounts through 2028. In this scenario, they would achieve retirement income of $104,000 per year – even if Blake retires at 60. This approach would also allow them to retire around the same time, rather than several years apart. 'Estelle and Blake have not yet fully secured their desired retirement income,' the planner says. 'To meet their goal comfortably – and to leave room for unexpected expenses like home repairs or vehicle replacement – they should look for ways to extend their income-generating years.' Estelle expressed concern about retiring during a period of volatile financial markets, fearing she might have to sell investments at a loss, Ms. Knoblach says. 'This is a valid concern: Sequence of returns risk arises when markets decline early in retirement, forcing early withdrawals and reducing long-term portfolio growth,' she says. 'This risk is particularly relevant for portfolios heavily weighted toward equities, which is the case for Estelle and Blake. Her concern is therefore justified.' Although Estelle and Blake may want to avoid drawing down their investments in the next year or two, they should prepare for doing so regardless of market conditions. 'Before retiring, they should undergo a drawdown analysis to determine the optimal order of fund withdrawals,' the planner says. The accounts they plan to draw from (e.g., RRSPs) should hold several years' worth of required income in secure, low-volatility securities such as guaranteed investment certificates or short-term deposits. 'This will protect them from having to sell equities during market downturns.' Another way to reduce market exposure is to ensure their essential expenses (e.g., housing, groceries) are covered by reliable income streams. Although they don't have defined benefit pensions, they could consider converting Estelle's defined contribution pension into a life annuity, Ms. Knoblach says. 'Combined with government benefits, this would allow them to ride out market turbulence without having to touch their equities.' Lowering portfolio risk and maintaining liquid, or easily cashable, reserves should be done regardless of how the markets are behaving around the time of retirement, Ms. Knoblach says. Retiring during a market high can be riskier than retiring in a down market because pullbacks are more likely. 'Estelle and Blake should avoid being swayed by emotion or geopolitical events and instead focus on building a robust, resilient plan.' The people: Estelle, 62 going on 63, and Blake, 54. The problem: Will Estelle's retirement plan be derailed by volatile financial markets? How much longer should she and Blake work? The plan: Scenario 4, in which Estelle works another couple of years, offers the best financial security. Make sure they have cash holdings in the accounts they plan to draw from. Consider buying an annuity. Monthly net income: $10,755. Assets: Cash $10,385; other $49,090; her TFSA $124,770; his TFSA $151,845; her RRSP $357,700; his RRSP $295,230; her employer savings and DC pension plan $164,140; residence $1,200,000. Total: $2.35-million. Monthly outlays: Property tax $500; water, sewer, garbage $90; home insurance $110; electricity $140; heating $80; security $35; maintenance, garden $325; transportation $605; groceries $740; clothing $300; gifts, charity $150; vacation, travel $2,500; dining, drinks, entertainment $1,000; personal care $200; gym, club membership $600; sports, hobbies $300; subscriptions $70; health care $480; phones, TV, internet $255; monthly RRSPs $960; TFSAs $1,250. Total: $10,690 Liabilities: None. Want a free financial facelift? E-mail finfacelift@ Some details may be changed to protect the privacy of the persons profiled.
Globe and Mail
14 hours ago
- Globe and Mail
FS Bancorp, Inc. Announces CEO Succession Plan
Retiring Chief Executive Officer Joe Adams Remains CEO of FS Bancorp until May 2026; Matt Mullet Named President and CEO of 1st Security Bank and will continue as President of FS Bancorp. MOUNTLAKE TERRACE, Wash., Aug. 15, 2025 (GLOBE NEWSWIRE) -- FS Bancorp, Inc. (the 'Company') (NASDAQ: FSBW), the holding company for 1st Security Bank of Washington ('1st Security Bank' or 'Bank') announced today that it has named Matthew D. Mullet President and CEO of 1st Security Bank, effective September 1, 2025. Joseph C. Adams, who has served as CEO of the Bank since 2004, will be retiring from that position, effective September 1, 2025. Matt Mullet has served as President of 1st Security Bank and of FS Bancorp, Inc. since July 2024 and will also continue in those roles. Joe Adams, who is retiring as CEO of the Bank on September 1, 2025, will continue to serve as CEO of FS Bancorp, Inc., a position he has held since 2012. 'On behalf of our Board and entire organization, I extend our deep appreciation to Joe Adams for his leadership, which has been instrumental in driving our growth, preserving our mission, and building shareholder value over the past 22 years,' said Ted Leech, Chairman of the Board of Directors of the Company. Ted Leech further added, 'This succession in executive leadership has been carefully planned by the Board and we are pleased to announce that Joe Adams will be succeeded by Matt Mullet. We have the utmost confidence in Matt, who has served the Bank extremely well for the past fourteen years and has already demonstrated the strength of his leadership skills, the depth of his knowledge of the Bank's operations and his knowledge of the communities we serve.' Joe Adams stated, 'Matt is the right choice to serve as CEO. He has proven himself as a leader, rising through successive executive positions at the Company and at the Bank, producing strong results and building effective teams.' Adams continued, 'Matt's extensive financial services experience and deep knowledge of 1st Security, community banking, and our marketplace, make him uniquely qualified to lead our organization for the future. Most importantly, Matt is the perfect cultural fit. He lives our Core Values every day and is the epitome of Smart, Driven and Kind.' Over the course of his banking career, Matt has held a variety of executive leadership positions, and his experience includes home lending credit and secondary marketing, liquidity management, risk management, facilities, operations, inside sales management, credit, finance, strategic planning and interest rate risk management. He is a cum laude graduate of University of Washington. He began his banking career in June 2000 as a financial examiner with the Washington State Department of Financial Institutions, Division of Banks. In 2004, Matt accepted a position at Golf Savings Bank in Mountlake Terrace. He served in a variety of capacities at Golf and was appointed Chief Financial Officer in 2007. After the Golf Savings Bank merger with Sterling Savings Bank, he held the position of Senior Vice President of the Home Loan Division at Sterling, until resigning in 2011 to join 1st Security Bank as a Senior Vice President, Business Development officer. Within two months of joining the Bank, Matt was promoted to Chief Financial Officer and held that title until May 1, 2025, when Phillip Whittington was named Matt's successor. As noted previously, Matt has served as President of the Company and the Bank since July 2024 and will continue in those roles. About 1st Security Bank of Washington FS Bancorp, Inc., a Washington corporation, is the holding company for 1st Security Bank of Washington. The Bank offers a range of loan and deposit services primarily to small- and middle-market businesses and individuals in Washington and Oregon. It operates through 27 bank branches, one headquarters office that provides loans and deposit services, and loan production offices in various suburban communities in the greater Puget Sound area, the Kennewick-Pasco-Richland metropolitan area of Washington, also known as the Tri-Cities, and in Vancouver, Washington. Additionally, the Bank services home mortgage customers across the Northwest, focusing on markets in Washington State including the Puget Sound, Tri-Cities, and Vancouver. Note Regarding Forward Looking Statements This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which can be identified by words such as "may," "expected," "anticipate", "continue," or other comparable words. In addition, all statements other than statements of historical facts that address activities that 1st Security expects or anticipates will or may occur in the future are forward-looking statements. Readers are encouraged to read the Securities and Exchange Commission reports of FS Bancorp, particularly its Annual Report on Form 10-K for the fiscal year ended December 31, 2024, for meaningful cautionary language discussing why actual results may vary materially from those anticipated by management. Contacts: Joseph C. Adams Chief Executive Officer Matthew D. Mullet President (425) 771-5299
Globe and Mail
19 hours ago
- Globe and Mail
How the new policy elite have caricatured the dismal science
Kevin Yin is a contributing columnist for The Globe and Mail and an economics doctoral student at the University of California, Berkeley. Being an economist in 2025 feels a bit like being Galileo under the Pope. Now that Donald Trump has fired the head of the Bureau of Labor Statistics and nominated loyalists to the Federal Reserve Board, those studying economics have been left exasperated. And while a somewhat caricatured version of the dismal science has been criticized by other social scientists for decades, only recently has the criticism become more than an ivory tower feud, with far less informed malcontents and far more dire consequences for people's welfare. Most of us have heard, or even uttered, the standard clichés about economics. Economists are focused on 'abstract models built on unreality,' often 'mistake [...] elegance for truth' and are swayed by simplistic assumptions such as perfectly competitive markets or infinitely forward-looking and hyper-rational agents. In this vein, Trump trade adviser Peter Navarro has called economists 'damn fools' who 'need to get out more often.' The current chair of the Council of Economic Advisers and nominee to the Federal Reserve Board, Stephen Miran, has argued that economists assume away trade deficits and thus cannot grapple with their implications. Oren Cass, the founder of a think tank, suggested recently that our model of comparative advantage has 'ceased to function.' To be sure, some of these critiques touch on genuine issues that leading researchers would be sympathetic to. And individual economists can certainly fall victim to any of these traps of dogma. But the 18th-century chalk-and-blackboard version of economic theory that protectionists have been criticizing lately would be largely unrecognizable to most frontier researchers. And the notion that people who spend their lives on these issues have not questioned the competitiveness of markets or the rationality of decision-makers is at odds with decades of study and debate. Opinion: A scary chart shows why diminished Fed independence may outlast this administration Opinion: As war rages, the world economy confronts a ghost of ages past These are tired tropes, first and foremost because much of modern economic research is empirical, concerned with making robust causal inferences from data. And while our understanding is constantly evolving, there is a great deal of empirical research that disciplines our views on the impacts of policy. On trade, for example, there is substantial evidence that it lowers the cost of living for consumers, improves production capacity via access to better intermediate inputs and can spur innovation by disincentivizing low-tech investment. Perhaps more subtly, critics have simply not understood the purpose of, or the process behind, the mathematical models they loathe. All arguments are models – including those made by protectionists and heterodox thinkers. The only difference is that mathematical models can guarantee logical validity (but not necessarily soundness) while verbal arguments cannot. This does not mean the mathematical models are correct, since underlying assumptions can still be false in critical ways, but it does constrain researchers to say something internally consistent. The claim that tariffs could incentivize manufacturers to relocate their production back to the U.S. is itself a simple model of the world – one that, when written down, would be guilty of all the same sins of assumption and more. This is not mere academic posturing – U.S. policy is currently being defended with reference to such oversimplifications. In his manifesto, Mr. Miran himself cites a paper by Andrés Rodriguez-Clare of UC Berkeley and Arnaud Costinot of MIT to argue that the optimal tariff could be as high as 20 per cent, because the total gains in tax revenue could outweigh the losses to consumers. Profs. Rodriguez-Clare and Costinot had to point out in an op-ed that this was mostly a pedagogical exercise, that it abstracts away from any trade retaliation and that they themselves do not support tariffs for this reason. In this case, it was the protectionists taking models too seriously, and the authors of those models being cautious. The caricaturing problem is somewhat endemic to the nature of what economics asks; the logic of these issues is often subtle, and words do not suffice. However, the sidelining of expertise is also partly the field's own fault for settling too comfortably into its 'trust us' approach on policy issues, instead of recognizing that finding an answer and communicating it are entirely separate skills. Economists are quick to accuse others of failing to understand, but slower to take up the hard work of helping the general public reach that understanding. We would benefit from a dose of humility, acknowledging our own role, however minute, in allowing this confusion to fester. But this is a digression. Whatever the flaws in conducting and communicating economic research, a vast and rigorous literature still shows that trade is good for the most part, that central banks need to be independent and that deficits must be paid by future generations. Policy makers and pundits can choose to ignore decades of research on these topics, but for the people and businesses who will suffer the consequences, the laws of economics will be anything but abstract.
