Joni Magil retired last year after working more than 40 years in health care.Chad Hipolito/The Globe and Mail
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“I retired in January, 2023, at age 65 after a 40-year career in health care – the first 30 years working for a private company in Montreal and the past decade for the British Columbia Ministry of Health in Victoria,” says Joni Magil, 67, of Sidney, B.C., in this Tales from the Golden Age article. Magil’s last position was as the director of physician compensation. It was a stressful job, she says, particularly during the pandemic when the pressure and the pace increased tremendously.
“I thought I would work forever because I didn’t have many hobbies or a target retirement date,” says Magil. “But when my husband and I started planning for a vacation, he suggested we go away for a month. I’d never taken that much time off before.”
It wasn’t until Magil took that time off that she realized how exhausted she was, both mentally and physically. “I felt fantastic and realized, ‘Oh, this is how I’m supposed to feel.’ I also thought being so tired all the time probably wasn’t good for me – or the people I work with.” When she returned to work, she told her boss she would retire in 11 months. It was important to Magil to ensure a smooth transition. “I had a great feeling of accomplishment to leave work the way I had envisioned.”
Retirement wasn’t quite what Magil had planned at first. Unexpectedly, her husband had knee-replacement surgery the week she retired, so she was very involved in his care and recovery for the first month.
“But when he got better, I realized I didn’t have enough to do in retirement. It felt like I went from full speed to full stop,” she says. Magil worried that perhaps she’d made a mistake. But then she slowly started taking up different activities.
“It took about six months to settle into my retirement lifestyle,” she says. Now, she takes regular fitness classes and has joined two walking groups, expanding her social circle while still maintaining contact with previous colleagues. She also volunteers to represent the patient community with health care organizations.
“My husband and I are conscious of our spending in retirement,” says Magil. “We were both previously married and had difficult divorces that resulted in a significant financial hit, so there has been a lot of discussion with a financial advisor over the years. We learned as we went.”
Read the full article here.
Are you a Canadian retiree interested in discussing what life is like now that you’ve stopped working? The Globe is looking for people to participate in its Tales from the Golden Age feature, which examines the personal and financial realities of retirement. If you’re interested in being interviewed for this feature and agree to use your full name and have a photo taken, please e-mail us at: goldenageglobe@gmail.com. Please include a few details about how you saved and invested for retirement and what your life is like now.
For more from Globe Advisor, visit our homepage.
Olivia, 55, and Elijah, 65, want to spend $120,000 in retirement. How close are they to hitting that goal?
Olivia describes herself as an incorporated small business owner contemplating retirement within the next five to 10 years. “I find it difficult to pinpoint when I can afford to retire and I would really appreciate your analysis of my financial picture,” she writes in an e-mail.
She draws a salary of $150,000 a year from her service business. Her husband, Elijah, is 65 and earns $50,400 a year.
The 55-year-old has a personal pension plan held within her corporation that will pay $1,996 a month, with 1-per-cent indexing, at age 60.
When they have both fully retired, Olivia and Elijah plan to move from British Columbia to Saskatchewan to be closer to family. They hope to travel extensively in the winter. In the meantime, they want to invest and save as much as possible, catching up with their unused tax-free savings account contribution room.
Their retirement spending goal is $120,000 a year.
In this Financial Facelift, Trevor Fennessy, a portfolio manager at CWB Wealth Partners in Calgary, looks at Elijah and Olivia’s situation. Mr. Fennessy is a chartered financial analyst and certified financial planner.
Want a free financial facelift? E-mail finfacelift@gmail.com.
Three things people underestimate about being stuck in the sandwich generation
Caring for school-aged children and elderly parents simultaneously is a pressure cooker for many families, especially for the women, writes Globe Advisor Reporter Deanne Gage in this Investing article.
Experts found three things that clients who are part of the so-called “sandwich generation” underestimate when they find themselves stuck in the middle.
Read more about the real cost – to our time, our money and our physical and mental well-being here.
In case you missed it
Is the wealth management industry ready for the decumulation challenge?
We’ve been hearing about it for decades: The baby boomers, one of the largest and wealthiest population cohorts in Canadian history, will soon retire and face the challenge of converting their retirement savings into retirement income, writes Jason Pereira, a senior partner and financial planner at Woodgate Financial in Toronto, in this Opinion article.
At the end of 2023, one in five Canadians was over 60 years old. That means the decumulation challenge is here – and it’s not to be underestimated.
Bill Sharpe, Nobel Prize winner in economics, famously called decumulation the “nastiest, hardest problem in all of finance.” With decumulation, everything is a variable: when you’ll die, how much you’ll consume, market returns, volatility, taxation and unexpected expenses. Put all that together and it gets messy.
Take a 65-year-old couple retiring today with full Canada Pension Plan and Old Age Security benefits. Their combined registered retirement savings plans (RRSPs) total $1.36-million and earn 5.22 per cent annually, and they spend $100,000 a year adjusted for inflation.
The couple wouldn’t bounce their last cheque until the year they turn 95.
However, when you factor in volatility, thereby introducing a sequence of return risk, the picture is not so rosy. At 85 (approximate life expectancy), the couple has a 12.5 per cent chance of running out of money. This increases to 35 per cent at age 90 and 63 per cent at age 95. Any surprise expenses or spikes in inflation could increase the probability of ruin significantly.
The wealth management industry has addressed this issue primarily through income and yield investing, focusing on interest and dividend generation over capital gains. But the need to consume is not the same as the need to generate certain returns, and this approach doesn’t do anything to extend the life of the asset pool. At best, it’s a naive strategy that seeks to consume the yield but not the principal.
This is the first in a four-part series examining the decumulation product landscape in Canada and how advisors can explain the options to clients. Read the rest of this article here, and look for Part 2 next week.
See The Globe’s suite of calculators and planning tools to help you manage your retirement here.
How siblings can avoid conflict – and hefty legal fees – while dealing with their parents’ estate
The death of a parent is an emotionally charged time, and can make the division of mom or dad’s stuff a trying task if their wishes haven’t been clearly laid out and explained in advance, writes staff reporter Pippa Norman in this Personal Finance article.
During estate planning, parents with more than one child should think honestly about how well their children get along and explain decisions about the division of their assets to prevent disputes, experts say. And for siblings left to deal with their parents’ estate, experts say organization, transparency and communication are key to avoiding hefty legal fees.
With the “Great Wealth Transfer” under way, Chartered Professional Accountants estimates $1-trillion will be handed down by baby boomers and the Silent Generation between now and 2026. For Gen X and millennial heirs, learning how to deal with their parents’ estate smoothly could save money, time and tears.
Read the full article here.
Retirement Q & A
Q: My husband is deferring his CPP until 70. He will receive the maximum amount. I will be taking my CPP, the maximum amount at 65. I am 3.5 years younger than him. Should my husband die before me, would I receive his increased top up between his CPP and mine?
We asked Jaydatt Bhatt, CFP®, financial planner, Sun Life, to answer this one.
A: When to start your CPP is an important and strategic decision for retirement planning. There are considerations like starting the CPP early, on time or late and each has specific rules around it. It is beneficial to factor in other retirement incomes like, but not limited to, employer pensions, your retirement savings plan (RRSPs) funds, Tax Free Savings Account (TFSA) and non-registered accounts, if applicable, and how incomes from such accounts are calculated for income-tested benefits such as Old Age Security (OAS).
Considering how complex this decision could be, you can benefit by working with a financial planner and building your own unique strategy, including different pensions, investment accounts and working out tax efficient ways to access different retirement incomes.
Regarding your unique situation, if both of you have started your CPP benefits, your husband has started at age 70 and you have started at age 65, you receive 60 per cent of your spouse’s CPP as a survivor’s pension.
However, you cannot receive a full survivor’s pension while also receiving a full CPP for your own pension. The combined benefit is not necessarily the sum of the two separate benefits and the combined amount can not be more than the total maximum CPP for a given year.
For example, if you were receiving $1,100 monthly for CPP and 60 per cent of your spouse’s CPP is $900, the total is $2000; but if the max CPP for that year has been set at $1,300 per month (in 2024, the maximum set by the government is $1,364.60), then you will only receive $1,300.
See how the Government of Canada calculates your CPP payment here.
Have a question about money or lifestyle topics for seniors? E-mail us at sixtyfive@globeandmail.com and we will find experts and answer your questions in future newsletters. Interested in more stories about retirement? Sixty Five aims to inspire Canadians to live their best lives, confidently and securely. Sign up for our weekly Retirement newsletter.
