Talk:Declining GIC ladder
Context for article
What is the context for this article as I do not recall seeing anything resembling this being discussed on FWF? --Peculiar Investor 23:39, 28 February 2024 (UTC)
- A follow-up query, how does this relate to other finiki articles and connect within the wiki? --Peculiar Investor 23:46, 28 February 2024 (UTC)
- Hi, while working on the annuity article I recently expanded the "term certain annuity" portion. The marketing for those includes "bridging an income gap" applications. But there is an obvious DIY alternative, the declining GIC ladder. Unlike a rolling GIC ladder where you just buy equal rungs unpon initial setup (devide your money in 5, anyone can do this), the declining ladder takes a few calculations to set up. This could discourage some people. The current article hopes to make setting up declining ladders easier. People can set up their own spreadsheets if the equations are provided. (I could have included the content within the fixed income ladder article but it would have occupied too much space). The current article will notably be linked where we mention delaying CPP/QPP and OAS and buying some GICs to bridge the gap, notably in the Liability matching article.--Quebec 11:58, 29 February 2024 (UTC)
- Understood. Thanks. --Peculiar Investor 14:57, 29 February 2024 (UTC)
- Hi, while working on the annuity article I recently expanded the "term certain annuity" portion. The marketing for those includes "bridging an income gap" applications. But there is an obvious DIY alternative, the declining GIC ladder. Unlike a rolling GIC ladder where you just buy equal rungs unpon initial setup (devide your money in 5, anyone can do this), the declining ladder takes a few calculations to set up. This could discourage some people. The current article hopes to make setting up declining ladders easier. People can set up their own spreadsheets if the equations are provided. (I could have included the content within the fixed income ladder article but it would have occupied too much space). The current article will notably be linked where we mention delaying CPP/QPP and OAS and buying some GICs to bridge the gap, notably in the Liability matching article.--Quebec 11:58, 29 February 2024 (UTC)
Article content
I don't understand the last sentence in "Using a non-registered account":
Note how the longer the term, the more money is required, because the 4 year GIC supplies cash flow over four years, and the interest is spent progressively instead of compounded.
Do you mean simple interest? If so, I would suggest:
Note how the longer the term, the more money is required, because the 4 year GIC supplies cash flow over four years, and simple interest is used instead of compounded.
--LadyGeek 13:21, 29 February 2024 (UTC)
- Compounding GICs are like strip bonds in that you get the principal and ALL of the interest at maturity. Non-componding GICs are like coupon bonds: you get regular interest payments. In a rolling ladder you might reinvest the 'coupons' but in a declining ladder, you spend them. Does that help? --Quebec 02:10, 1 March 2024 (UTC)
Ready or not?
I'm done with this article. Are the explanations clear enough? --Quebec 22:03, 3 March 2024 (UTC)
- The explanations are clear. Unused sections should be removed. I can't review the page from a financial perspective (I'm a US investor), but I think it is ready to be moved to the main namespace.
- When you move the page "live", the related Fixed income ladder and Guaranteed Investment Certificate page descriptions should be modified to include the new page. --LadyGeek 13:38, 4 March 2024 (UTC)