April 18, 2024

Episode 301 - Optimal Government Pension Claiming

April 18, 2024

In this episode, we delve into the best time to claim your Canada Pension Plan (CPP) benefits. Although the focus of this episode is on Canada, there will be many relevant and valuable insights for our non-Canadian listeners. In our conversation, we discuss the importance of understanding the intricacies of CPP benefits, the fundamentals, and how individuals can optimize their retirement income by making informed decisions. Explore the importance of understanding when to claim CPP benefits, how much future financial security a CPP offers, and why the CPP is one of the most valuable retirement assets for most Canadians. Gain insights into how wage growth ties into CPP benefits, the exceptions to deferring a CPP claim, and what made 2022 different regarding CPP claims. Join us as we uncover the nuances of CPP benefits!

Key Points From This Episode:

0:00:00 Intro

0:04:23 Main Topic: When should you claim CPP benefits?

0:55:49 Aftershow

Read the Transcript

Ben Felix: This is the Rational Reminder Podcast, a weekly reality check on sensible investing and financial decision-making from two Canadians. We are hosted by me, Benjamin Felix, and Cameron Passmore, portfolio managers at PWL Capital.

Cameron Passmore: Welcome to episode 301. I don't know about you Mark, but we shared a nice dose of spring this week in Ottawa. We got low 20s yesterday. It was beautiful. What's it like out there?

Mark McGrath: Spring here, it comes in fits and spurts, so we get a beautiful day and you're like, “Finally, spring,” right? We've got a big cherry blossom tree in our front yard and it starts blooming and you're like, “Aha, finally.” Then the next day, it's four degrees and pouring rain all day. You never know what the weather is going to be until June, July, August. Pretty confident, it's going to be nice. The rest of the year. No idea.

Cameron Passmore: It's so funny. I'm from Quebec, moved to Ontario. Ben's from BC, and moved to Quebec. And Mark, you're in BC.

Mark McGrath: Born and raised.

Cameron Passmore: Ben, you're the average of the two of us, somehow. I am wearing my Masters hat this week. It's Masters week. It should be fun to watch. Also, eclipse week. Did you guys catch the eclipse?

Mark McGrath: No. It was cloudy and rainy and I don't think BC got really a good glimpse of it anyway.

Cameron Passmore: All right. One of the most popular questions, I think, we've gotten over all the years. Ben, you're diving into it this week. Why don't you tee that one up?

Ben Felix: We're going to talk about the best time to claim your Canada Pension Plan, CPP benefits. If any non-Canadian listeners are rolling their eyes, the concepts that we talk about are broadly applicable. Not directly and not the details don't necessarily translate, but I know for Social Security, for example, there are a lot of very close analogies. I posted a YouTube video on this and people from other countries have chimed in saying, “Even though this is Canadian, it's relevant to me in the UK, or whatever. Don't be deterred by its Canadianness.”

Cameron Passmore: Exactly. Also, this week, we have a conversation with our long-time friend and returning guest from Episode 258, Professor Meir Statman, who just released his terrific new book, A Wealth of Well-Being: A Holistic Approach to Behavioral Finance. Of course, the three of us will just sit around and chat for the two people that remain in the after-show.

Ben Felix: I did want to mention before we kick off the episode that someone mentioned to me recently that they went to speak with a different firm, not PWL. They wanted to hire a financial advisor, but they didn't come to us. The reason being that they didn't think that they had enough investable assets to work with PWL. We don't have a minimum anymore. We eliminated that, I don't know what, a year ago, Cameron?

Cameron Passmore: More or less.

Ben Felix: We used to have minimum. Everyone in the market thinks we still have a high minimum. We don't have minimum. We're willing to talk to anybody. It doesn't mean that we'll take everybody on as a client, but we're willing to have a conversation and we've eliminated any concept of a hard minimum, like, we won't talk to you unless you have a certain amount of money. I just want to make sure listeners are aware of that, because I still see it come up online fairly often, and someone told me that they thought the same thing recently.

Mark McGrath: It's such a tough problem. You want to help everybody, but economically as a business, it's not always viable. Like you said, there's not a hard line in the sand. At the same time, there are certain relationships that we can't take on because it's not going to make sense long-term, but I've always said, I never say no to a conversation. I think if anybody's listening and is just PWL curious, if you will, then reach out.

Cameron Passmore: Yeah. We're not prepared to jam products that might compensate us just to make ends meet to provide that service. It's for good reason all the way around.

Mark McGrath: Cool.

Cameron Passmore: Okay, with that, let's get to the episode.

***

Cameron Passmore: All right, welcome to episode 301. Ben, take it away.

Ben Felix: All right. We're going to try and talk through when you should claim your Canada Pension Plan benefits. That's a meaty topic. Hopefully, people are okay with it.

Cameron Passmore: It's meaty, but it's so great. Like I told you before, when we started recording, it's nice to get this all in one spot.

Ben Felix: The Canada Pension Plan benefit is one of the most valuable retirement assets for most Canadians. The thing about it is that its value can change pretty materially depending on when the benefit is taken, and we'll dig more into what that means in a minute. This makes planning to get the most out of it of really valuable exercise. Now, the good news is that there's research at the intersection of financial planning and actuarial science that provides a lot of insight into how to optimize the CPP timing decision. I do think this is one of the most consequential financial decisions that retirees in Canada, or in other countries, as we mentioned in the introduction, will make.

The difference between a good choice and a bad choice can measure in the hundreds of thousands of dollars on expectation, like hundreds of thousands of expected lifetime income. That's one of the tricky things about this is that you can make a good decision based on your expected lifespan, but people always bring out the case of, if I die, the day after I start my pension, I'm going to get nothing. We'll talk about that framing more later and why that framing can be problematic. Anyway, we're talking about maximizing expected lifetime income.

I want to think that I want to say, because this came up a bunch in the YouTube comments and on Reddit, is that this is not about deferring consumption. It's about funding consumption with other assets. We'll dig into this more in a minute. I just want to make sure people understand it before we start digging into it. We're talking about funding, when we say deferring the CPP benefit. We're talking about funding consumption with other assets. If you have RRSPs, or taxable investments, or whatever, funding consumption with that to allow you to defer your Canada Pension Plan benefit, which gives you a larger benefit later, the effect of that is that you get to spend more overall throughout your life.

The comment that I saw come up on YouTube and on Reddit was that I don't want to defer my consumption to later. I want to spend it now. That's wrong. That's not what we're talking about. We're not saying, don't spend your money now. We're saying, spend your savings now to defer your Canada Pension Plan benefit to later so that it is larger, which allows you overall to spend more throughout your life. We're not saying spend less now and more later. I want to make sure we got that out of the way.

We'll start with some fundamentals. The CPP benefit, this is really important stuff. Honestly, I didn't know this level of detail until relatively recently, when I took on a project to model exactly how CPP works, because I wanted to calculate the tax on the contributions. Anyway, that project gave me a deeper understanding of how all this stuff works, but I don't think that this is common knowledge. The CPP benefit is calculated as a percentage of this thing called the maximum pensionable earnings average. The MPA is the average of the trailing five years of the YMPE, which is the yearly maximum pensionable earnings. Now, there are a lot more acronyms coming up. Sorry.

Cameron Passmore: We're with you.

Ben Felix: The other thing that happened recently is that CPP is going through these enhancements and the enhancements have introduced this thing called the YAMP. That's the additional maximum pensionable earnings. Historically, before these enhancements, the maximum CPP benefit, what we would today call the base CPP was 25% of the MPEA, with the enhancements were moving from 25% replacement rate on the MPEA to 33.33%. But of what is the question? That's one of the things that's a bit tricky to explain.

The way the enhancements break down, there are two additional CPPs, because they had to make this as confusing as possible. They didn't just make one enhancement. They rolled out two separate enhancements that operate differently. First additional CPP, the maximum, once it's fully implemented, it'll be 8.33% of the MPEA. That gives us 25% base CPP, plus 8.33% first additional CPP. Now we're at 33.33% replacement of the MPEA. Then the second additional CPP maximum benefit, once it's fully implemented, it is 33.33% of the MPEA adjusted difference between the YAMPE and the YMPE. Let me explain what that means though, because it matters. I agree, it's ridiculously complicated.

Cameron Passmore: No, I think we got it. It's just so many acronyms.

Ben Felix: That was ridiculous.

Mark McGrath: I was reading your notes yesterday, Ben, and I had to reread that section multiple times just to make sure I understood what you were talking about, all that you finished. I think big picture, the idea is that for a certain level of income and below, old CPP is meant to cover a quarter of that income. The enhancement is going to cover a third of that income.

Ben Felix: Up to a higher limit. Yeah. In very simple terms, what's happened with the enhancements is that they have increased the ceiling of income that will be replaced and they've increased the replacement rate. Functionally, how that happens is pretty complicated, but in very simple terms, that's what they're doing. Anyway, I was going to re-explain some of that to make sure it was super clear, but I don't know if it's necessary. I think that simplifying the explanation, big picture is all that really matters.

Now, the other thing is the additional CPP benefits for somebody retiring today are relatively immaterial. You'll be there. Anybody that's made contributions in the last few years, they'll get some of the enhancements, but these won't be fully implemented until 2064. The 33.33% replacement rate, that's not going to be there until 2064. Somebody retiring today, base CPP is going to be the bulk of what they're getting.

The important point of talking about all that, about how the benefit is calculated, is that when you start CPP, the initial benefit is calculated as a percentage of the MPEA, or the MPEA plus the additional MPEA stuff that we just talked about, but it's based on that number. Now, those figures, the MPEA, which is based on the YMPE and the YMPE is indexed to wages, to Canadian wages. Now you go back and look at wage growth, or the wage growth figure that Canada Pension Plan uses for indexing, it is outpaced inflation by about 1% per year on average, since 1973, I think, is what I have data going back to.

You're getting a percentage of this thing that's growing at wage growth. Now, once the benefit starts, so in the first year that you take the benefit, your amount is calculated based on the MPEA, a percentage of the MPEA. Once you start taking the CPP benefits, they are indexed to the consumer price index, the CPI All Items Index. Those two different indexing figures are important. The main point though, CPP is initially calculated based on the MPEA, which is indexed to wage growth. Once you start taking payments from Canada Pension Plan, your payments are indexed to consumer price inflation.

Mark McGrath: I think you mentioned wage growth has traditionally been higher than CPI, is that right?

Ben Felix: Correct. Yeah.

Mark McGrath: Okay, so while you're working and contributing, your contributions and the expected benefits are going up based on wage growth. When you retire though, the indexation of the pension is a function of CPI, which we all know as inflation.

Ben Felix: Correct. That's one big piece, and that is the background to explain the next big piece. Thinking about how timing of taking CPP can be optimized, we have to understand how it interacts with timing. Why does when you take the benefit matter? There are two channels that affect why it matters. One of the channels is statutory. It's written in the CPP legislation. A lot of people understand that piece, that if you take it before 65, there's a penalty. If you take it after, there's an increase. I think, relatively that's well understood. The one that is lesser known, I think, is that the effect of wage growth on the ultimate benefit.

I’m going to talk about the statutory one in a little bit more detail for a second. The benefit can be claimed anytime between the ages of 60 and 70. I actually was talking to the advisors on our team at PWL about this recently. People get a letter in the mail before age 60. There are some stories that people were talking about people just going and claiming the benefit, going and applying for the benefit, because they got the letter in the mail at age 60, which as we'll talk about is probably not ideal for a lot of people.

Mark McGrath: My mom did that. I'm her planner. She didn't even tell me. She got the letter, she did it. I was like, “What are you doing?” You can go back. You can undo it. But to your point, I think, the easy decision is just to take it, because you get the letter in the mail and just sign it off. You go, you get your money, right?

Ben Felix: Yeah, crazy. You can take it anytime between 60 and 70. You get a letter before age 60 saying, you can take this now, which most people probably should not do as we'll talk about. There's a 0.6% reduction in the total benefit each month prior to age 65. That's a maximum reduction of 36% at age 60, and then there's a 0.7% increase for each month after age 65. If you start the benefit after age 65, each month you get a 0.7% increase, so that gives you a maximum increase of 42% for taking it at age 70, instead of age 65. Just as an example, if we took age 65 as the baseline and you're entitled to maximum base CPP at 25% of the MPEA, you can increase that percentage figure to as much as 35.5% of MPEA by delaying to age 70. You can decrease it to as little as 16% of MPEA by claiming at age 60. Big difference in the percentage of the MPEA that you get as a benefit. That's one piece.

Then the second piece is that interaction with wage growth. Remember, the MPEA is based on a five-year average YMPE, which changes with wages, which have historically outpace inflation. In real terms, the piece of the pie that you're getting is growing over time. You get the statutory increase, which gives you a bigger piece of the pie, but as long as wage growth exceeds CPI growth, you're also getting a larger pie. You're getting a bigger piece of a bigger pie. That one's less impactful overall, but it still matters.

If we take again, a 65-year-old today as an example, they've got the max 25% of MPEA. Today in 2024, that's roughly $16,000 annually in CPP benefits. If they defer to 70, they're going to get the statutory 42% increase that we talked about, and the MPEA is going to increase, assuming 1% real wage growth. Under that assumption, the total increase in the lifetime benefit will be 49.2% higher at age 70 and at age 65. 42% is statutory, 7.2% is just based on wage growth, assuming 1% wage growth, real wage growth over that period.

Cameron Passmore: That is not widely known.

Ben Felix: No, that piece is not.

Cameron Passmore: That's real key right there.

Ben Felix: That's the difference between rough numbers, $16,000, taking it at 65 today and $24,000 in real terms, because we're using a real wage growth figure. $24,000 adjusted for inflation by deferring to age 70.

Cameron Passmore: Real money.

Ben Felix: Yeah, it is real money.

Mark McGrath: If you think about a couple, too, I remember doing this for some young clients modelling the planning tool we use has, the one that I use has enhanced CPP built into it as well. Looking at a young client, they were around 25. As we mentioned earlier, the full benefit doesn't kick in till 2064. Basically, 40 years from now. But for them, delaying to age 70, it looks like they're going to get the maximum. Delaying to age 70. Then you include the old age security, which hopefully is still there as well, delay that to age 70. For a couple, it was quite close – in present value, in today's dollars, it was quite close to $80,000 annualized before tax from age 70 onward.

Ben Felix: Crazy. Deferring. Cool. We say it makes sense. The implication though, and we talked about this at the beginning, the implication is that you're spending other assets for those five years. You're saying you want to defer the benefit, that means you're spending other assets. Because to reiterate, I know I already said this earlier, but I want to make sure it's clear, because it came up so much in response to when I posted this on other channels, we're not talking about deferring your consumption. We're talking about spending now, just not from CPP. That allows you to spend more overall throughout your life because you have a larger CPP benefit in the future.

The implication is you're drawing from investments, which means your investment returns matter. There was a paper from the Canadian Institute of Actuaries and the Society of Actuaries that looked at this. They say in their paper that the only things that really matter in making this decision, or in deciding whether it makes sense to defer or not, the only variables that matter, assuming that your assets are in an RRSP. If they're not in an RRSP, there are some tax reasons why you would do one thing or the other. In the case of an RRSP, or a RRIF, a registered retirement income fund, the choice to delay or not delay CPP payments comes down to expectations about longevity and financial market returns.

They look at this, they model it a couple of different ways. They find that if the alternative investment, if the thing that you would have had invested that you're instead spending down to bridge deferring CPP, if that was a risk-free investment with a rate of return of 1% above inflation, anyone who expects to live past age 80 should defer CPP at age 70, rather than take it at age 65. Then they note in this paper that only a fifth of female CPP recipients and a quarter of males die before age 80 under current actuarial tables.

Mark McGrath: People don't realize that, right? As you get older, your life expectancy increases. All things held constant. I think for a 65-year-old, it's been a while, but the life expectancy for a 65-year-old is north of 20 years, I think, if I'm not mistaken.

Ben Felix: Sounds right. Yeah.

Cameron Passmore: But how many times have you heard clients say, “Hah. I'll never live that long”?

Mark McGrath: Every time I post about this on Twitter, somebody says, “No, I'm not going to make it that long.” You just don't know. We'll talk about this later. That's the risk that you're hedging against, is you might live longer than you think.

Ben Felix: Correct. People think about only one side of that risk, not the other. They think about the risk of dying early, which ties into how this decision is often framed, which we'll come back to later. That was a risk-free investment. They also look at a risky investment. They look at a 4% rate of return with a 4% standard deviation, which is roughly in line with the assumptions PWL uses for a fixed income portfolio. Under those assumptions, a 65-year-old male with high expected longevity would face a 73% probability of receiving less lifetime net income by claiming age 65, instead of age 70.

Then for women who tend to live longer, this paper finds an 81% chance of being worse off for having taken CPP at 65, instead of 70. Then they also look at a 6% expected return, which is roughly in-line with what we would use for a 70% stock, 30% bond portfolio. In that case, they find a 57% chance of being worse off for men and 65% chance for women.

Mark McGrath: Even if you have reasonably high return expectations for the portfolio, the probability still seems to favour delaying.

Ben Felix: Yeah, I think so. If we take higher expected returns, and this comes back to what do you use for an expected return assumption, because I know there's one person who's pretty vocal about this on Twitter and elsewhere about taking CPP as early as possible. But their return assumption is also 10%.

Mark McGrath: I think we talked about that recently, didn't we?

Ben Felix: We sure did. If you took 10% and stuck that into this model, yeah, it would probably start to look pretty good to take CPP early, but I don't think that's a reasonable assumption.

Cameron Passmore: Oh, we know.

Ben Felix: The longevity piece is also super important, where CPP is ultimately a hedge against longevity and a couple of other things, but longevity is one of the big ones. Oh, yeah, the paper also looks at a case of high expected return and a low longevity. Even in that case, it's a 51% chance that a male ends up worse off and a 60% chance that a female ends up worse off.

Cameron Passmore: Wow. That one's surprising.

Ben Felix: From having started the benefit at 65, rather than 70. This paper is actually not looking at 60. 60 being the earliest start date with the biggest penalty, this paper's looking at 65. They're not actually modelling the penalty side of it. They're just looking at the bonus that you get from deferring. Presumably, all of this would look worse starting at age 60. That paper concludes that for most Canadians who have sufficient savings in their RRSP or RRIF account to bridge the gap, they've got a high probability of being better off in the long run by deferring to age 70.

Now, the thing is, nobody does this. There's data on this that the government posts and it's updated as of 2023. In 2023, a little more than 5% of Canadians started their CPP benefit at age 70. If you look at new CPP pensions that started in 2023, the vast majority of them started at age 65 and age 60. Very few at age 70. That's been pretty consistent for quite a long time.

Mark McGrath: That is just because of a lack of financial means, too.

Ben Felix: There are two main papers on CPP specifically. There's a bunch on Social Security that are in my notes here, but two on CPP specifically, one from the Canadian Institute of Actuaries that we just talked about, one from FP Canada, which is the body that issues the CFP here in Canada. The FP Canada paper does look at that. They had data on basically asking, is the explanation that people didn't have means? They had data showing that most people who took CPP at age 60 had the financial means to bridge at least one year, but they didn't. It doesn't seem like that's the explanation.

Mark McGrath: Interesting. I didn't know that.

Cameron Passmore: What does it mean? The awareness?

Ben Felix: There are a couple of potential explanations. One is that. One is that people just don't know. This is pretty interesting. There’s a 2018 survey done through the Government of Canada website, and they found that only 36% of Canadians were aware they could defer to receive an increase. That seems big. That's not even talking about the wage indexing component to this. That's just talking about the statutory benefits. People probably even don't know the distinction between wage growth and CPI indexing for CPP would be my guess.

Mark McGrath: I don't think most planners know about that. I only learned about that relatively recently, the impact of wage growth.

Ben Felix: No, I know. Me too. When I dug into this really, I guess, earlier this year, because I started working on a project with our friend, Aravind Sithamparapillai, we wrote an article about this for advisor.ca, just about the after-tax cost of contributing to CPP for a business owner. But to understand that we really had to dig into line-by-line, what goes into the CPP calculation. If you do CPI indexing before and after the benefit starts, CPP looks a lot worse, because the benefit is much lower in real terms. As soon as you have 1% real wage growth into the model, that part of CPP looks a lot better.

Mark McGrath: I'm impressed with the paper you guys are going to put out. I think I'm more impressed that you nailed Aravind’s last name right off the hop without making this. I’ve known Aravind for a long time, I still can't pronounce this last name.

Ben Felix: I had to practice it alone in my office for a few days before I got it, but –

Mark McGrath: I was going to say, yeah.

Cameron Passmore: Yeah. I got it last time I met him. That was good. I was proud of that. He said, “It was pretty good.”

Ben Felix: Okay. Awareness is one potential explanation. That seems to be an important one. A lot of people just don't know that you can do this. Another one potentially, is that the advice that does exist out there is misguided. This one I knew about, because I read this FP Canada paper when it came out and it talks about this. I posted a YouTube video on this yesterday as of the day that we're recording. I got some comments back from some of the people on our team at PWL that this framing was new to them. I thought that was interesting. Hopefully, people find this part interesting.

One of the most common approaches that people use to look at this decision at the CPP decision is the breakeven analysis. The idea is if you take CPP at age 65, for example, instead of age 60, that means that you're giving up those five years between age 60 and 65 that you could have been getting CPP income. By taking it at age 65, or age 70 on a more extreme case, like we're talking about, probably makes sense most of the time, the later you take it, the more years you need to live for your higher benefit to make up for the years that you got no income from CPP. Breakeven analysis is really looking at how long do you have to live to make up for the lost years, is how they'd frame it, of benefits.

This is problematic for two reasons. One, and you guys both mentioned this earlier, people generally underestimate their own longevity. There's a paper from the Society of Actuaries in the United States that looks at this. An empirical fact, people underestimate their own longevity. That's one problem. The other problem, and this is the one that I find really interesting, is that breakeven framing makes deferring the benefit seem like the risky option. It makes it seem like you're taking a gamble by taking it late, instead of taking it early.

When really, it's probably the opposite, that the gamble is taking it earlier and then living long. That's important. There's really interesting empirical work on this one as well. Empirical work is on social security, but I think it's conceptually the same thing. In that paper, Americans presented with breakeven analysis for their social security decision are more likely to claim social security as early as possible.

Mark McGrath: People think about it as, “Oh, I have to live to be this age in order to break even.” They think that age is not likely to be attained.

Ben Felix: It's the combination of those two things. It's that it frames it as a gamble, where you have to live long enough to make it worthwhile. That's a gamble on its own and then compound that with the fact that people underestimate their own longevity and you can see why it's a problem.

Cameron Passmore: If I make it that long, I'll be happy to be here even though I may have less income.

Ben Felix: Yeah. I hear that one all the time, too. Doing that type of analysis, breakeven analysis, I think it ignores, or doesn't put enough emphasis on the benefits of CPP. We talked about this in a past podcast episode that CPP is a guaranteed inflation index annuity, which is pretty great. It protects against adverse scenarios. It's a hedge against bad market returns throughout your retirement, high inflation throughout your retirement, and a longer lifespan than you expected in retirement protects against all those things. Breakeven analysis really doesn't give it any credit for those things.

That FP Canada paper, they suggest a different measure, which they call the lifetime loss, they basically say, take the present value of expected payments from your CPP life expectancy and compare those numbers. That's probably an oversimplification, but it's roughly that. This actually, because you're looking at life expectancy in that case, statistical life expectancy, it flips the framing to early claiming being a loss, because you do expect to lose on average from claiming early. It also, because it looks out to life expectancy, it also captures more of the benefits of CPP.

Mark McGrath: I remember, I think it was Jason Watt’s CE Drive Podcast, I was listening to it a few years ago. With apologies to the guest, I don't remember the guest that he had on. But this particular guest said that people should frame it as the default is 70. Taking it at any age earlier than 70 is a penalty. That was the first time I had heard that. It made a ton of sense to me at the time.

Ben Felix: I think that probably is a really good framing. Okay, so we talked about why do people take it early. They don't know any better, breakeven analysis pushes them to take it earlier than they probably should. Another one, that FP Canada paper that I keep mentioning, it mentioned this as a possibility, but didn't have any empirical evidence to back that up. I know this was a little bit contentious in the financial planning community when it came out, because this paper is making a claim that financial advisors aren't doing a good job, but didn't have any evidence to back it up.

Unfortunately, for us financial planners, there is a recent paper from David Blanchett who's a three-time Rational Reminder guest. He's got a paper in the retirement management journal using Social Security, not CPP, but close enough. He finds that households with financial advisors who are paid on commission tend to take Social Security earlier than those with hourly, or fee-based advisors. The suggestion is that commissions are driving them to tell them to take it earlier, so they can buy a product, or keep their money invested maybe, I don't know.

Interestingly though, this paper also finds that financial advisors in general, so they also look at fee-based advisors and hourly advisors/accountants, so they put them in the same bucket. If I remember correctly, the paper finds that they don't help at all. No advisor helps, but commission advisors make it worse. It's not like if you look at advised versus unadvised households, advised households are doing better on average, that's not what they find. They just find that in the case of commission advisors making it worse. Anyway, interesting, but it does support the idea that at least in some cases, financial advisor compensation models are affecting the scope and quality of advice that the clients are getting.

Something that we do have to cover is that it doesn't always make sense to defer the benefit. That'd be too easy. There are a few exceptions. Lower life expectancies. You have a lower life expectancy and that's not putting your finger in the air and saying, “I think I have a lower life expectancy.” If you have a real reason to believe that you have a shortened life expectancy, claiming it really makes sense or can make sense. But don't run the numbers.

Another one is, oh, if you don't have bridging funds if you have no money to fund the gap from 60 to 70, then of course, you take it when you need it. Another one is guaranteed income supplement eligibility. Canadians with very low incomes in retirement may be eligible for the guaranteed income supplement. That has pretty aggressive clawbacks as your income starts to increase and it's possible that deferring the CPP benefit could result in GIS clawbacks, which is effectively a very high tax rate, well over 50% in some cases.

Mark McGrath: It would help you qualify in the earlier years, but after age 70, it would impact everything.

Ben Felix: Yeah, taking it early would be better is what you're saying, right?

Mark McGrath: Yeah. I'm saying, if you delay it – from 65 to 70, if you delay the CPP, because CPP income qualifies against the test for GIS, right?

Ben Felix: Yeah, I get it. Then similar to that, old age security is another income-tested benefit, where if deferring CPP pushes you up into the clawback of old age security, that may be less than ideal overall. That's another one to be careful with. Another one that I did, I don't have in my notes. Came up from the YouTube comments and it's worth mentioning is survivor benefits. If you have a spouse who's passed away that you have a survivor benefit from. The calculation for survivor benefits is – for total benefits is fairly complex, but basically, there's a limit on how much total survivor and regular CPP benefits you can get. It's possible that someone who defers and gets a higher CPP benefit will not be able to get all of that benefit anyway, because of survivor benefits being part of the picture.

That's another case where careful consideration would have to be made. On optimal timing, you wouldn't want to defer five years and then realize that you get nothing from the deferral, because of the total benefit calculation. Any other ones you guys can think of why somebody would take it early?

Mark McGrath: I guess, outside of the case where you retire early and you have no contributory years, because of the way that CPP's calculated your contributory years are, I think it goes until age 65 as a default, right? Or when you start taking it. If you retire at, say 58, and you delay it, those years where you have no income and you're not contributing count as zero contribution years for calculating the total CPP benefit. I haven't looked at this specific math and it really depends, but I can see a case where a very early retiree might be incentivized to take CPP early, so that they're not counting additional zero contribution years by delaying it past 60.

Ben Felix: I mentioned that on Twitter, and I think Rob Engen chimed in and said, that what you lose from the additional low-income years is more than offset by – but don't quote me or Rob Engen on that. I don't know. I just saw it in passing.

Mark McGrath: Yeah, I haven't looked at it either, but it's something that has come up just casually in conversations before. You can go and look at that, then get back to me. You're good at this stuff.

Ben Felix: Yeah, it is another one worth looking at. I should look at that. We talked with the percentage of MPEA that you can get as the maximum benefit, but we didn't talk about how to get to the percentage that you actually get, because not everybody gets the maximum. We're not going to go there right now. That's a whole episode in itself.

Cameron Passmore: It is so much more complicated than the average person thinks.

Mark McGrath: Totally. Very confusing, especially with the enhancements and multiple different layers of indexation based on different calculations for inflation. There's a few experts. I think Doug Runchey, I think he's largely retired now, but he is, as far as I know, the authority on this stuff. Just reading some of his content on this, I'm like, hey, you could spend a lifetime just trying to figure this out and figure out how to optimize it. It's a discipline all on its own.

Ben Felix: As Doug has. I think Doug worked for the government in the CPP department. He did spend his life there, and that's one of the reasons he's so sharp at it. Not many people like that though, I don't think. Jason Yi, actually, Jason Yi, he's a financial planner. He's also very good on CPP. He helped me out just reviewing the notes on this before I recorded a YouTube video.

Mark McGrath: He's got some great videos on it, too.

Ben Felix: Two right now. He's got one more coming. But yeah, nice animated videos. Okay. There's one funky thing that happened in 2022, and I think we had Jordan Tarasoff on Rational Reminder to talk about this at the time. In 2022, it would have actually been better to take CPP before age 70 for someone who was 69 in that year. CPP, remember the benefits calculated based on the MPEA, which changes based on wage growth and is then indexed as CPI once the benefit starts. The benefit of deferring has the two pieces that we talked about, the statutory increase and the wage growth, the real wage growth indexing piece.

In 2022, weird times, as people remember, we had high inflation and low wage growth, because of followed from the pandemic. In that year, someone who is 69 would have actually been better off claiming in 2022, getting a year of CPP benefits, getting the CPI indexing, as opposed to the wage indexing. Yeah, they would have been better off doing that than waiting until age 70 to claim. That's just one example that shows that rule of thumb. Even if we say, people should generally claim at 70, which is probably true, even then, there are always these funny exceptions.

Cameron Passmore: Jordan was on episode 225, November of 22.

Ben Felix: Yeah, that was an interesting discussion, I remember. All right, so the CPP update decision, it is one of the most consequential financial planning decisions that most Canadian retirees will make. The difference between optimal and sub-optimal claiming can measure in the hundreds of thousands of expected lifetime dollars. Someone challenged me on that in a YouTube comment, but it's true. If you look at someone claiming at 60 and at 70, you look at the present value of future payments at a normal life expectancy, it is easily in the hundreds of thousands of dollars.

Generally, deferring to age 70 is going to be the wisest move. But there are many exceptions that we talked about, objective exceptions. There are also subjective exceptions, like some of the people in the YouTube comments and Mark, you probably get it on Twitter too, some people think that there is a bunch of people saying, “Don't defer until 70. That's what the government wants you to do.” I was like, how is that an argument against deferring to 70?

Mark McGrath: Well, and people confuse CPP and the government. They think that when you pay into CPP, it's going into general tax revenue or something. It's not. But people just have this overarching distaste for big government. Sure, I can understand that, but it's not nefarious. There is an incentive to delay to 70, and it's in your own best interest, most likely, and the government's, because potentially, that's going to alleviate their need to help you with other social programs and stuff. There are situations where what's good for you and what's good for the government can be the same thing.

Ben Felix: The CPP, it operates at arm’s length from the government. It's legislated. It's allowed to exist by legislation from the government, but CPP itself operates at arm’s length and CPP investments. Similarly, Crown Corporation, arm’s length. It's not the government. We model this. We have a couple of different financial planning softwares that we use. We use NaviPlan and Conquest Planning, and we plug the numbers into that software and it lets us play with different start dates, while taking into account taxes, variable investment returns, government benefits, all that stuff.

In that software, there are exceptions, just like we've talked about, but we pretty clearly see usually, the benefits of deferring in terms of ending net worth after tax for someone who has a normal life expectancy. Also, probability of success in retirement spending also tends to go up when we defer CPP. Now, just thinking about that, actually our modelling is probably biased toward taking CPP, because we do tend to stress test plans out to a longer life expectancy than normal, which I think is the sensible thing to do. We often, but not always recommend people deferring.

Mark McGrath: If you think about it as a tail risk hedge, the things that you mentioned that it protects against, which are inflation, which is potentially the biggest risk that you face in retirement, and you've talked about this in your videos and we talked about it, I think a little bit, when I did my segment on CPP, which was obviously much more brief and less detailed than what you just went through. But if you think about those risks, they can be the most impactful risk. CPP is, as far as I know, the only thing that you can buy. Yes, it's compulsory, but it's the only thing you can get that's really going to protect against inflation. As you mentioned, it's basically a risk-free asset from that perspective.

I think about it like insurance in a lot of ways. If you do live a long life, those risks get really serious. The sequence of returns risk, yes, that's impactful at the beginning of retirement as well, but it's going to be felt at the end. Your portfolio was likely to deplete sooner. It's those last, let’s call it 10 years, where all those risks can conspire against you and it's the most dangerous zone, I think, for running out of money and CPP is the only thing that can really help set an income floor for people.

If I think about it as insurance, to me, it makes a lot more sense. Just like my car insurance, I hope I'm never going to need it. I'm glad that I have it, because if those risks do materialize, it could save me, right? Or it could save my partner, whoever. I think if people just stop thinking about it as I could invest the money and do better myself, maybe you can, maybe you can't. It's protecting against risks that you can't protect against yourself. I think people should be a lot happier with the product.

Ben Felix: I agree. Even in a normal scenario, with normal inflation, normal life expectancy, CPP is pretty good. It's pretty good. We looked at the IRRs on it and they're all right. It's not like investing in small-cap value stocks, but it's not terrible. It's not lighting your money on fire by any means. Then if you live long, or if you have high inflation, or if you have bad stock market returns, then it's incredibly valuable.

Cameron Passmore: And you don't have to do anything. It just shows up.

Mark McGrath: I was thinking about this, I don't know if it was last night, but it is essentially risk-free. If you think about your risky assets, like your portfolio, and people think about the reserve amount in CPP, which is I think close to 600 billion, I want to say, like 543 billion and people conflate the returns that the CPP board gets on those assets with CPP. In reality, there's a person on Twitter named Investor’s Friend and he and I were talking about this. If you look at the actuarial reports, if I've understood it correctly, money goes into CPP. Money then immediately goes out to pay retirees. Contributors are paying retirees in a large way immediately and people are going to say, that's a Ponzi scheme. There's a lot of differences between Ponzi schemes, which are not transparent and are full of lies and CPP, which is very transparent and you know what you're going to get.

The reality is it's a unique form of risk, as far as I'm concerned. You've got your risky assets. You've got stocks. You've got bonds. You've got real estate. You've got commodities. This is something that you can't buy. It's a stream of income payments coming from the contributors directly. It's not correlated to anything else, except for people contributing to the CPP. You can't get it anywhere else.

Ben Felix: There are a couple different things in there. It's partially funded. Some of the payments that go out do come from investment returns. A lot of them for base CPP do come from other contributions. In terms of an inflation hedge, that's powerful. The question for sustainability then is will Canadian wages continue to be strong enough to support those payments? Because we need to have wages to fund those payments. I can’t remember when the date is. I saw it in the actuarial report. They are moving toward being fully funded at some point in the future. One and two, are designed to be fully funded. The contributions for those ones, when the payments are coming out, they're coming from investment returns and not from contributions. It's pretty well designed and it's on a path to perpetual sustainability from investments.

Right now, it's not fully funded. The most recent actuarial assessment though said that it's in good shape for the next 75 years. It's funded on a steady-state basis for the next 75 years. Pretty good shape. The other that comes up related to that market, people often say, people who contributed early to CPP got a way better deal, because they started out with low contributions and then there was a reform in the 90s, I think, of the contribution amounts and benefits were also adjusted. We've had the recent enhancements.

Anyway, contributions went up, and so people who contributed early got the full benefits as if they contributed the same as everybody else, but they contributed much less. A lot of people say, well, CPP is a bad deal, because those guys who contributed earlier got a way better return on their contributions. My response is that's true. They realized they had to change the contribution rates to make it sustainable and therefore, people who contributed early did get a really good deal. But that doesn't make it a bad deal for people who are contributing today. Relatively, and maybe you feel sad about that and I'm sorry.

Mark McGrath: You're not sorry.

Ben Felix: I'm not.

Mark McGrath: Yeah, it's true though. Why are you comparing it to that? It's completely irrelevant to your decision to take it yourself, right?

Ben Felix: Yeah, I think so.

Mark McGrath: There’s one other point I want to make and this actually happened to me once with the client, is we had intended to delay and then the market corrected heavily. The intention was to delay till 70, but the market corrected significantly and their portfolio was down a lot. We decided to take CPP at that point in order to stave off additional portfolio returns. In hindsight, it wasn't as big of a deal, but that sequence of returns risk basically materialized. By delaying, they had accumulated a couple years of increases, but then had the option to take CPP then to stave off those portfolio withdrawals. I think it gives you a little bit more flexibility and very niche circumstances to be able to do things like that.

I believe, if you're taking CPP, I always confuse CPP and OAS with how far back you can go. I think CPP, if you take CPP, you can undo it and repay it within the first 12 months. If you've elected to take CPP, you've got, I think, 12 months to undo it and pay it back. With OAS, it's six months. I may have those backward, listeners. I apologize. But in the case where it's a COVID crash, where things go down, you panic, you decide to take CPP and then the market recovers really swiftly, I think in theory you could go back and say, “Actually, you know what? I am going to continue to delay it. I'm going to repay those CPP payments and then delay it to 70.”

Cameron Passmore: That's pretty cool. Good conversation and great to see Meir again. Last week, I thought Abby was great. Had a lot of good feedback on Abby's episode, too.

Ben Felix: Yeah, we did.

Cameron Passmore: Killer month this month so far on content from you guys, and a lot of pickup on it. The video you did, Ben, on bank advice and CPP and let alone, the content on Money Scope, which is unreal. But these topics that are really hitting many people. These are topics that so many people care about.

Ben Felix: I'm just trying to keep up with Mark. I'll spend a month putting this crazy detailed content together and Mark puts out a tweet in five minutes and gets way more views than me.

Cameron Passmore: Your RESP one, Mark, they get 275,000 views.

Mark McGrath: It's funny too, because I bang that tweet out while I was putting my son to bed. My son and I have to snuggle to sleep every night. He's six, but we never sleep-trained him. I sleep with him until he falls asleep. I checked my RESP balance the day before because I forgot it if I contributed this year. I was like, “Oh, yeah.” I noticed it across $70,000. This would make tweet. How did it get so big so fast? As he was falling asleep, I just banged it on my phone. It did some serious numbers. To your point, Ben, you can spend a month curating what you think is the perfect piece of content. You put tons of thought into it and crickets. But you bang something out in five minutes and it gets a ton of views and a ton of engagement.

It was a good little thread. Tons of great comments, tons of questions, sparked a bunch of conversations. My DMs with people. Had advisors reaching out to me that actually weren't aware of that strategy, too, which is interesting.

Cameron Passmore: It had a bunch of people reach out to me with our advisors as well, which is nice. That had some feedback, Ben, I think it's safe to say, on the content people want to hear us talk about. Just in general terms, I think we can have more investment, probably a bit more tactical stuff in general. A bit more Canadian, a bit more planning. Bit fewer books. Fewer non-financial guests kicking around the idea – and I would welcome any feedback. Kicking around the idea of having probably another. I saw Angelica this week about that, a separate podcast just on the business of financial advice, which is something I'm interested in. Perhaps targeting the financial advisory community. If anyone has feedback or ideas, let me know.

Probably, from obviously, a Canadian perspective. That's something that really interests me. Some of those guests that are management leadership type content that we've done lately, those kinds of conversations would go in that podcast.

Mark McGrath: I love it. I think it's great. You've got such a vast experience in this industry, I think. I know this stuff is of import to you. I think it's a great idea.

Ben Felix: You've learned so much Cameron in the last, I don't know, five years from the people you've been talking to and just the circles you've been networking in and learning from. The knowledge you have right now is you're in the top 0.1% probably, of people in our business in terms of practice management knowledge.

Cameron Passmore: So many cool people on practice management that I know would love to come on and have those kinds of conversations.

Ben Felix: You I’m saying.

Cameron Passmore: Yeah. No, I get that. I appreciate that feedback, but that stuff is not congruent with this podcast at all. I'm just scratching the surface with Randall Stutman, for example, these kinds of people, it's not congruent with what this podcast has been about, so that's why I would package it up in that. I'd love learning out on this stuff and there's so many fascinating people that we know that we've met over the years, that I met over the years. It would be so much fun to get that into its own feed. Noodling that. Mark, you're doing a piece on seg funds. What's going on with that?

Mark McGrath: Oh, man. I talked about segregated funds on a segment on the Rational Reminder. I was just looking for something to write about. I just went back. I was like, “Oh, I've got some notes on segregated funds. I should put that into a blog post, thinking a thousand words.” I started writing it. As I started writing it, I started teasing out more questions and more questions, and it just became this beast. I just found all these rabbit holes to go down that I hadn't really stumbled upon when we did the segment on the Rational Reminder. I've got the first draft more or less done, and I think I clocked it at 5,000 words. Even in there, there's still some stuff that I didn't really cover.

It's so complex. The information is not easily accessible. I had to talk to Jason Watt, who's a friend of ours, and he teaches the LOQP, which is an entry-level insurance course for people who want an insurance license. I had to pick his brain on some of this stuff because I literally could not find the information anywhere on the Internet. Not through insurance company websites, not in the information folders for segregated funds, which was like 60 to 70-page regulatory documents for segregated funds. I'm still confused about a few things.

I sent my first draft to Ben and a couple of other people and I'm waiting for feedback to see what direction we go with it, but it's a beast and I learned a lot about segregated funds more than I would ever want to know about segregated funds is in that paper.

Cameron Passmore: What will the output be?

Mark McGrath: I don't know. I've been talking to Ben about whether we turn it into maybe a white paper. I'm not as technical as Ben, so I'm sure if he reads it, he's going to come up with a lot of great questions that I haven't answered. The trouble is there's just not a ton of data that I was able to find specifically about segregated funds outside of the size of the industry. Again, Jason Watt put together some really interesting data on the probability of the guarantees paying out and that type of thing, so I think he could get involved if he's got the time and energy to do it.

Because of its length, it's too long for a blog post. I think, some kind of white paper, or long-form media piece makes sense. Maybe do a longer video on it. I don't know. It just became this Frankenstein thing that I started working on and took on a life of its own and I'm open to feedback on what to do with it.

Cameron Passmore: Speaking of life of its own, just got a note from Angelica that the Money Scope, Ben, just crossed a 100,000 downloads.

Ben Felix: On audio?

Cameron Passmore: I presume so. I say it every week. I'm sorry. I think it's fantastic. It's the definitive, clearly spoken, straightforward, but technical on all things for anybody, frankly, but especially corporation. Now that we're into episode 12 this week, 11, 12, you're getting into the deep weeds of investing inside corporations.

Ben Felix: Yup. It's getting pretty heavy. We recorded earlier today, the day that we're recording the episode on optimal compensation planning for people with corporations. That was a heavy – I don't even know, a month of prep that Mark and I did, Mark Soth, because we keep finding things that it's like, we haven't looked at this yet, we better model it. But modelling it takes a week. You have to understand the output of the modelling because this stuff is complicated though. You think CPP is complicated, try optimizing your compensation from a corporation where CPP is just an afterthought of that decision.

Mark McGrath: I could see the fatigue on your face when we started recording the Rational Reminder, because you had already recorded Money Scope today, and I was like, your brain is just going to melt out your ears at this point.

Ben Felix: Yeah. It was a two-hour recording with Mark.

Cameron Passmore: Mark, why don’t you take away this first review?

Mark McGrath: Recent reviews. Guy Giddy from the US, “Brilliant. This is a great and thought-provoking podcast on topics critical to living a productive, stable, and happy life. Ben and Cameron are phenomenal hosts, who ask great questions. Ben's intelligence is shocking. He explains topics in such a clear and concise way that one often wonders why he doesn't have a Ph.D. in economics and finance.” Good question, Ben.

Cameron Passmore: Tempted.

Mark McGrath: Any ideas for that?

Ben Felix: I don't know, man.

Mark McGrath: That'd be yes, Mark.

Mark McGrath: You could get an honorary degree. Going on, he said, “He'd be a phenomenal professor/educator. I appreciate all the varied guests. Most importantly, it is great that guests are invited to discuss their topics and we as listeners can then decide whether or not we agree with said information. All in all, this is a great podcast and if there was a no bell for podcasts, this would get it. Cheers to all the great work that you guys and your support staff do.”

Cameron Passmore: Next one, JLS3249 from Canada says, “So good. Such a good podcast. The best I found on investments and finance in general.” Thank you so much.

Ben Felix: I want to be gracious and take the common from Guy Giddy. But when people say that my intelligence is shocking, I just read stuff that other people have done and then say it back on the podcast.

Mark McGrath: That's what everybody does.

Cameron Passmore: Take the victory lap, Ben.

Ben Felix: No, like the people that we have on as guests who do the research, those are brilliant people that think of the questions to answer and then do the – anyway, I'll leave it there.

Mark McGrath: It's funny. Before I joined PWL, Ben you had said to me, “Why don't you just come and join my team and do research?” I was like, “I don't know how to do research.” I'll never forget your response is like, “Dude, I don't know how to do research.” I was like, “What? Ben doesn't know how to do research? You don't want me on the team, Ben. Come on.” I'll never forget that. I had a good laugh.

Ben Felix: I don't know what I'm doing, man. Just doing my best here. Erin from Germany says, “I bought an iPhone just to rate the show. It is that good. Ben, Cameron, and now Mark as well,” hey, first review that we get to read that includes Mark, I think.

Mark McGrath: Yes. I've arrived.

Ben Felix: “Do a fabulous job. This is the podcast if you want to nerd out and have a constant companion on your investing journey. The level of coverage through a variety of topics is breathtaking. They always stay rational, hence the name, and are based on facts, studies, etc. The particular style of Ben portraying the topic with easy-to-understand concepts and messages is captivating. Afterwards, the proof with academia, modelling, and boooooostrap.” I don't know. Oh, booooot, because we’re Canadian. “Boooootstrap simulation.”

Mark McGrath: It’s like six Os in the word boot.

Ben Felix: Yeah. “Convinces and retains listeners, such as myself, who are predominantly male, with technical and/or academic background. Deservedly, the RR team is getting high profile guests and don't stop on the technical side of investing. A lot is about behaviour, how to tie living the good life together with investing as well. Been following the show since the early days, when YouTube episodes were audio only as well. That is a while ago. Now it is mainly following the video versions, but I wanted to leverage this platform here for a review. This podcast will just keep on giving. Thanks from Germany.”

Cameron Passmore: Very nice. Last one. Molag from Canada, “New listener. Great content, but sometimes a combination of my AirPods and the sound editing recording makes most S and some T sounds extremely loud and piercing. Slap some EQ on.” We've passed this message on to both the audio production company that we work with in the background and also to Matt, our in-house video producer, so we'll be looking at that.

Mark McGrath: I know a couple of episodes, we had one particular individual on YouTube commented twice on my audio specifically, so I don't know if it's my audio that's causing people problems. I have no idea how to fix it, so I welcome feedback from anyone who knows what's going on. I'm just curious if anybody else has that problem, or if it's just a couple of individuals.

Cameron Passmore: On LinkedIn, I heard from Carolina last week from Monte Carlo saying that, “I often listen to your Rational Reminder Podcast. Amazing work.” Very nice to hear from her. Speaking of AirPods, I told you guys this before we started recording. Ordered some AirPods, if you’re like in Costco and they give an option to have DoorDash, they don't obviously pay for any advertising, this is just my experience today. The delivery was here at the office in less than 45 minutes.

Ben Felix: It's crazy.

Cameron Passmore: I've never even tried a service like that. I realized I'm late to the party, but pretty cool. This fall could be an exciting time. Mark, you've got the book coming out, the Canadian edition of Dan Solin's book, Wealthier. This fall, we're planning on a series of some meetups, I don't know, book launch party, or something, because Dan is going to be in town this fall and then you're going to come to town as well. I'm not exactly sure the dates. It’s going to depend on publishing, etc., but we have that in our sights for the fall.

Mark McGrath: Yeah. I have a deadline now for the book writing, which is good, because without a deadline, I'll just hum and haw. I'm going to Europe the end of May for three weeks, and just based on the publishing calendar as I know it, I think it means I've got to finish before I go. I've basically got seven weeks to finish this up.

Cameron Passmore: Now we've gone public, I guess that's more pressure, right?

Mark McGrath: Challenge accepted, but we'll get it done.

Cameron Passmore: Ben, you got a queue up next week's conversation with Mike Green.

Ben Felix: Oh, it's a great conversation. Mike Green has been one of the primary people arguing that index funds are breaking financial markets. I admittedly had largely ignored him. I hadn't really dug into any of his arguments and just dismissed it as whatever. Had actually done some content on how index funds are not affecting market efficiency, which is true, but it's also not Mike's point, which I now understand after having actually gone through his arguments to prepare for his episode.

We invited him on because he wrote a scathing review of me as a person on his Substack. Someone sent me that and I read it. I was like, “Wow, I've really annoyed this guy. Maybe I should see what he's so annoyed about.” And so, I invited him on Rational Reminder. I just said, “Listen, you clearly have something that's important that you want to share. Why don't you just come on our podcast to talk about it?” He agreed. Before we had him on, I really went and listened to him on all the other podcasts, on all, he's done a lot a bunch of other podcasts that he's done. I read his Substack posts. I get it now. I get what his point is. I think by getting what his point is, we were able to ask some pretty good questions to really have a good conversation.

I think it was a great episode. One of the reasons that I've always been skeptical of Mike is because a lot of the other shows that he's appeared on are a little bit more sensationalist, and that always was just a turn-off. It's not the kind of content we want to do. But he was great.

Cameron Passmore: He is not a sensationalist.

Ben Felix: Not even the slightest bit.

Cameron Passmore: He comes at this argument with deep care and compassion for his kids. It's almost like, a climate change type issue in his world. He was so insightful and really good, nice guy.

Ben Felix: Yeah. Enjoyed that. We'll see what listeners think, but I think it's a really good episode. It gives you a different perspective.

Cameron Passmore: I'm not sure it's one you'll play at 2X speed. Just throw that out there. But you might want to slow it down. He's quite bright. Then in two weeks, Scott Galloway will be here. He has a new book coming out later this month, The Algebra of Wealth. That was also a good conversation with Prof G, Guy. Good to get him on. Thanks to our friend, Barry Ritholtz for making the introduction, which is pretty cool. Anything else on your minds, guys?

Mark McGrath: I'll mention this. One of our Rational Reminder fans, he's a physician out of Ontario. Ben, I believe you've met him. Dr. Hasan Merali. He just published a book. I've got it actually right here at my desk. I don't know if people can see that. It's called Sleep Well, Take Risks and Squish the Peas. I haven't read it yet, because he just sent me a copy of it. I've known Dr. Merali for a while. He's in pediatric emergency medicine. he's a researcher as well. But he sent me a copy and I'm really excited to read it, because the whole premise of the book is what we can learn from toddlers. As a dad who has a one and a six-year-old, a book written on this topic by an expert in the field, I think, is really interesting and it's just a cool coincidence that he happens to be a fan of the show and he's showing up at our meetups and stuff. I'm going to try and get through that book in the next few weeks and maybe I can talk about it on a future episode.

Ben Felix: Yup. I've got a copy of the book, too. I'm going to try and read it also because I'm similarly interested for the same reasons as you.

Cameron Passmore: Maybe it would help you get those Twitter numbers up, like Mark from his snuggle time.

Mark McGrath: Ben has surpassed me on Twitter. I don't know what he's talking – he's got 20,000-something followers. I'm playing catch-up with Ben now. He's putting out, what? Two videos a week. Come on. You’re a machine.

Ben Felix: You're always playing catch-up, but the rate of growth of your Twitter account was very concerning to me, so I had to start tweeting more. But you're just too good at it. You just got a knack for –

Cameron Passmore: Ben’s just a pinch competitive.

Mark McGrath: I'm not as competitive, but I did point out a thread to my wife that Ben wrote a little while ago and it got 500 and something likes and 180,000 views. But when my RESP thread surpassed yours, Ben, the first thing I did was took two screenshots. I was about to do something with them and I was like, “You know what? I'm just not going to go there.” I've got the screenshots if I need them. I've got receipts in case.

Ben Felix: That's pretty funny.

Cameron Passmore: All right, to the two listeners who stuck around this long to listen, thanks for listening and we'll see everybody next week.

Mark McGrath: Thanks.

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