Ted Lennox, a retired engineer, builds model railroads in the basement of his Ottawa home.Ashley Fraser/The Globe and Mail
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“I retired in 2016 at 64 years old, two years after selling my aviation planning and consulting engineering company,” says Ted Lennox, 72, in this Tales of the Golden Age article. “I stayed on for a couple of years afterward to help ensure a smooth transition. I decided to sell the company partly because I was tired of the endless pursuit of new business.”
Keeping operations running, he adds, can take a toll on your life and health.
“I did expect to work as a consultant after I retired. My first assignment was to go to the European Arctic to help fix a project that had gone off the rails. That was when I realized how relieved I was to have left the stress and responsibilities of the business world behind.”
Today, Lennox provides only occasional ad-hoc advice to his former employees on a pro-bono basis.
“We’ve travelled extensively to the U.K., Europe, Israel, Mexico and the Caribbean. At home in Ottawa, I can often be found in the basement, working on my model railroad. Once a year, I make it available for public viewing as part of a city-wide tour.”
Lennox also has an extensive military library that keeps him busy and engaged. “During the pandemic lockdowns, I researched and wrote a biography of my airport architect father, who served in the Polish Air Force in the Second World War.”
He and his wife Nancy have been saving for retirement for decades, he says. “Our retirement strategy is to maintain our financial investments at a fixed level in the longer term, using any returns above this level for discretionary spending.”
Don’t wait for society to come to you, Lennox advises. Get out there, do things and meet people. “Most of our current social life has developed since we retired. And lastly, try to look at the bright side of life. It’s contagious.”
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.
No kids? No problem: How Canada’s child-free and cash-rich couples are spending their time and money
When couples meet with a financial planner, they’ll most likely talk to one focused on saving, investing and leaving behind an inheritance for children. Which is great – unless you’re not planning on having children, staff reporter Salmaan Farooqui writes in this Investing article.
For dual-income no-kid couples – commonly referred to as DINKs – their significantly different financial realities need to be front and centre in these conversations. Although not all of them will end up wealthy, they’re all saving hundreds of thousands of dollars by not having a child. And that extra disposable income opens up a world of freedom.
According to the most recent estimate from Statistics Canada, it costs $350,000 to raise one child from birth to age 17. That figure rises by 29 per cent if parents support that child through post-secondary education to 22 years old. (Of course, these days, some kids live at their parents’ home well into their 20s and even 30s.)
While not all DINKs deliberately chose not to have kids, as birth rates around the world drop it’s not surprising that their numbers are rising: There were 1.9 million DINK households in Canada as of 2021, up from 1.7 million in 2012.
So how is DINK life different? Child-free couples have more flexibility in how they shape their lives because they’re not paying and saving for all sorts of kid-related expenses. They can be riskier with their careers, they can decide to power-save for retirement and they can choose not to buy life insurance.
That’s the bright side, but there are also unique hurdles that DINKs face.
Read the full article here.
Are your investment returns good enough to fund your retirement?
It’s not easy to tell if you have achieved acceptable investment returns for your retirement savings, writes Frederick Vettese in this Charting Retirement article. This week, Vetesse, former chief actuary of Morneau Shepell and author of the PERC retirement calculator (perc-pro.ca), compares different average returns and their results here.
In case you missed it
Changes could mean a high tax rate on short-term rental income
“We’ve been planning a trip to attend my niece’s wedding this summer,” writes Tim Cestnick in this Tax Matters column. “My wife, Carolyn, was speaking with a guy who owns several short-term rental homes. ‘Do you want a home with a shower or a bath?’ the man asked. Since Carolyn is always looking to save money, she asked, ‘What’s the difference?’ There was a pause, then the man replied, ‘Well, you need to stand up in the shower.’”
This guy’s full-time vocation is renting out his homes, says Cestnick. Late last year, he adds, draft legislation was introduced that changes the tax rules for people who own short-term rental housing. The new rules could create steep tax rates.
Cestnick explains the rules and gives examples here.
After grieving, surviving spouses face new tax challenges
The deadline for filing taxes in Canada for 2024 is April 30. As the big day approaches, Globe Advisor and Globe Investor have teamed up to offer advice on how to maximize returns, find credits and avoid an audit. The full series can be found here.
In addition to grieving the loss of a loved one, surviving spouses often find themselves dealing with new tax challenges related to estates, pensions and changes to their income, writes Gillian Livingston in this Globe Investor article.
Whether a death is sudden or expected, grief – and not tax issues – should be the initial focus, says Matt Trotta, vice-president of tax, retirement and estate planning with CI Global Asset Management in Calgary.
“The best advice for a lot of people in that situation is to take a deep breath and handle the personal matters first, say goodbye on their own terms,” he says. “The tax issues and the estate issues will be there when they’re ready. That’s because panicking often creates a lot of damage.”
Advanced tax planning done years before one spouse passes away is the best way to minimize taxes on the deceased spouse’s final tax return and keep taxes as low as possible for the surviving spouse, Mr. Trotta says.
But often, widows and widowers encounter surprises as they adjust to their new circumstances.
Read the full article here.
For more from Globe Advisor, visit our homepage.
Retirement Q & A
Q: I’m a 54-year-old woman and I have just filed for divorce. How do I manage my retirement savings and pension through this process?
We asked Darren Farwell, senior wealth advisor and portfolio manager at ScotiaMcLeod to answer this one. Farwell is also a member of the Scotiabank Women Initiative, which helps female clients manage their wealth.
First, I’d like to acknowledge that filing for divorce is a difficult decision that comes with many emotional and financial considerations. As the laws surrounding divorce vary from province to province, I recommend engaging both a lawyer and financial professional to ensure you have a team of people who can help you navigate the complexities of your situation.
From a financial point of view, there are many things to consider. In some provinces, like Ontario, when a marriage or common-law relationship ends, the assets acquired during that period, as well as the appreciation of those assets, are often split equally upon divorce or separation. For this reason, it is critical that you understand the assets you own and where they are held – both assets held jointly and those solely in your name and your spouse’s. Create a spreadsheet or use a notebook to record all of your assets and those of your spouse, including bank accounts, pension plans, RRSPs, TFSAs and, if you own property, the value of your home, cottage, timeshare and rental properties. This will give you a sense of the full list of what may need to be divided. In some provinces, contributions to RRSPs could be considered matrimonial property and may be split during a divorce. RRSPs are often used to make ‘equalization payments’ to the other spouse to allow equal splitting of assets.
It is also critical that you review your financial plan in consideration of how you want to live post-divorce and in retirement. I recommend that you speak with a financial advisor to ensure your plan is up to date and supports your goals as you look to your next chapter.
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.
