Tony Brand, 65, enjoys working on his drag racing car in his North Vancouver garage.JENNIFER GAUTHIER/The Globe and Mail
Tony Brand, 65, retired in 2015 at the age of 56, after working for 36 years as a power-line technician for BC Hydro.
”I remember getting my first pay cheque and asking my dad, who also worked for BC Hydro, ‘What is this $43 pension deduction?’ He told me I’d be happy about it in a few decades,” recallsBrand, in the latest Tales From the Golden Age.
“He was right. I realize I am lucky to have been able to retire at that age with a defined benefit pension that has a cost of living adjustment.”
Brand could have retired at 55, but he hung around longer because he enjoyed the job and his co-workers. “I always enjoyed my time off, doing things with my wife and two daughters (and later, our two grandkids and two dogs). So, I knew that I would be able to keep busy in retirement.”
He and his family did a lot of travelling before the pandemic. His wife also inherited a farm in Pemberton, B.C., “so there’s lots to do around there to maintain it,” he says. “I like using my hands to repair and build stuff. I also have a 1973 Chevrolet Nova that I drag race. I bought it from my neighbour. It was his mom’s car, and I did all the modifications and painted it myself with the help of another neighbour’s expertise. I’ve found that car enthusiasts and racers are always helpful, and I’ve made some great friendships racing.”
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.
Can Theo, 60, and Evelyn, 57, afford to travel more without jeopardizing their financial future?
For the 34 years they’ve been married, Theo and Evelyn have operated a profitable franchise business in Ontario. While they will retain ownership, they have passed on the day-to-day operations of the business to their son.
Earlier this year, they sold the family home and moved to Alberta to be closer to family. They plan to travel back to Ontario for the summer to help out with the business, drawing a salary to supplement their part-time jobs in Alberta.
Theo’s income last year was $54,885 and Evelyn’s $33,600.
”We are trying to figure out the best way to move forward for retirement and what pot to draw from first,” Evelyn asks. They wonder, too, when to begin collecting government benefits. Their goals are to pay off the mortgage, grow their investments and travel more, Evelyn writes. Their retirement spending target, including more travel, is $7,500 a month after tax.
In this Financial Facelift, Amit Goel, a certified financial planner, partner and portfolio manager at Hillsdale Investment Management Inc. of Toronto, takes a look at Theo and Evelyn’s situation.
Want a free financial facelift? E-mail finfacelift@gmail.com.
Can a couple with $700,000 in assets collect the Guaranteed Income Supplement?
In the latest Charting Retirement article, Frederick Vettese, former chief actuary at Morneau Shepell and author of Retirement Income for Life, takes a look at opting to collect the Guaranteed Income Supplement here.
In case you missed it:
Make sure your estate plan considers your digital assets
One of life’s greatest problems is the password, writes Tim Cestnick, in his Tax Matters column. “I’m talking about computer passwords. Years ago, I used the same password for everything: ‘password1.’ Yeah, I also thought it was pretty creative at the time. I had a friend whose name was Forrest (he heard a lot of Forrest Gump jokes) who used the password ‘1Forrest1.’ Now that was creative.”
It occurred to Cestnick that, if he were to die tomorrow, his family would have a tough time accessing all his online accounts. “And what about my growing list of digital assets? Would they know what those assets are? Do I even know what those assets are?”
You’ve probably given some thought to who will inherit your home, your grandmother’s jewelleryand your rubber chicken collection. But, Cestnick asks, what about your digital assets? Read the full article here.
Want a bad plan for retirement? Rely on your house
Home ownership has many virtues from a financial point of view, but it doesn’t take care of your retirement, writes personal finance columnist Rob Carrick. For that, he notes, you need your own savings or a pension to layer on top of the Canada Pension Plan and Old Age Security.
The extent to which Canadians believe their home will pay for retirement was documented in a recent retirement survey commissioned by the Healthcare of Ontario Pension Plan, or HOOPP. Overall, Carrick reports, 38 per cent of survey participants somewhat or strongly agreed with theidea that selling their home would set them up for retirement.
This idea seems far more entrenched among younger people. Among people aged 18 to 34, 56 per cent strongly or somewhat agreed that selling their house would take care of their retirement. It’s easy to see why Gen Z and millennials might see their house as a retirement plan. At their age, most of their financial energy is sucked up by their houses. Homes can be relied upon to rise in value over the years, so this burden seems worthwhile. In retirement, you just have to tap into all the home equity you’ve acquired.
But, says Carrick, there are flaws in this reasoning.
Read the full article here.
Retirement Q&A
Q: I’m leaving my salaried job when I turn 60. My partner says I should wait until 70 to take my CPP benefits and take from my RRSP instead, but I’m not sure I want to do that. CPP vs RRSP?
We asked Shelley Smith, investment advisor for TD Wealth Private Investment Advice, to answer this one.
There are many factors to consider when deciding if taking CPP early makes sense for you. It’s important to keep in mind that once you decide, you cannot pause it or opt out if you change your mind, so you should only move forward with taking it when you are absolutely sure it is the best option for you.
From a purely financial standpoint delaying your CPP benefits to age 70 makes the most sense, as delaying your CPP benefits will result in a larger payment than if you take CPP at 60 or even 65 – but there are other factors you’ll need to consider. If you are thinking of working less hours but need to maintain your lifestyle, you may want to consider taking CPP at age 60. Another consideration is your current health or family health history. If receiving CPP benefits early enables you to have the opportunity to enjoy experiences like travel, taking up new hobbies and/or helping others then taking CPP early will be a positive benefit. Even if you don’t need the money you can build up additional financial security by using the funds to contribute to your tax-free savings account (TFSA).
You mention you don’t want to dip into your RRSP just yet but it’s important to point out that there’s not many investments out there that are fully indexed to inflation and offer a guaranteed monthly/annual increase like CPP. Depending upon your other sources of income (company pension plan, bridging options and/or other investments), delaying the CPP benefit will increase your future monthly payments.
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. Read more here and sign up for our weekly Retirement Newsletter.