Ron Clarkin, a reluctant retiree, in his home studio in Toronto.Christopher Katsarov/The Globe and Mail
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“I retired in 2022 at the age of 63,” says Ron Clarkin of Toronto, in this Tales from the Golden Age article. “I wasn’t ready to retire from my career as an engineer and consultant in the health care industry. I felt like I still had a lot to contribute.” Clarkin was working on contracts and the last one wasn’t renewed. He took his time looking for more work but, he says, he found that even after getting far along in the interview process, the job always went to someone else. “I assumed they were looking for younger candidates. After a while, I realized I probably wouldn’t get meaningful longer-term employment and maybe it was time to stop looking for work and focus on other things.”
Clarkin was a good artist in high school and started getting back into it in his late 50s, doing mostly acrylic painting and some pencil sketches. “People started asking me to paint things for them, like storefronts, cityscapes, people and dogs. Once I had more time to focus on my artwork, the requests increased.” A lot of the work Clarkin does today is commissioned. He has a website and holds exhibitions once a year.
“My ‘retirement’ also includes doing handyperson work in my condo. I also occasionally work as an exam proctor and a photography assistant,” he adds. While these jobs don’t pay as well as his career did, Clarkin says he thoroughly enjoys them – and they help him stay busy. He also remains active in his community, volunteering for different organizations.
Clarkin believes he would’ve been a lot more upset about not being able to find more engineering contracts if he and his wife didn’t have a financial safety net. They work with an advisor to help manage their investments and retirement and estate plans. They haven’t cut back their lifestyle, but Clarkin points out that they’re not that extravagant to begin with.
“The hardest part of this phase of life is accepting I’m retired now,” he says. “My engineering career is no longer part of my day-to-day identity.”
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.
More than half of Jill’s net worth is real estate. Is that a problem as she heads into retirement?
Jill took an early retirement package last year at the age of 54 and has been living on that and her dividend income ever since. She’s afraid to spend her savings and worried she might need to find another job.
Jill has two children in their 20s and a cottage they want to keep in the family. Her principal residence is a duplex in which she rents out the lower floor on Airbnb. Her goal is to pay off the part of her mortgage that applies to her principal residence when it comes due in 2026. Her mortgage gives her the flexibility to divide the loan into different terms and rates. She also has a mortgage on the cottage property, which she rents out 70 per cent of the time.
She has substantial assets. “After my divorce, I had my home with 20 per cent paid off so I was starting over,” Jill writes in an e-mail. “I lived within my means, rented out my basement, then bought three rental properties over six years with 100 per cent borrowed money, converting them from single family to upper and lower duplexes. I held those properties until 2021, when it was a sellers’ market, and sold them.” This, plus investing with the help of her dad’s knowledge, played “a big part” in building her nest egg. It didn’t hurt that she was paid a very good salary in the past 10 years, Jill adds.
She also has more than $900,000 owing on mortgage and other loans. She has no pension or other fixed income and she’s worried about rule changes for short-term rentals that would affect her Airbnb income. Her retirement spending goal is $90,000 a year after tax until her residence mortgage is paid off in two years and $71,000 a year thereafter. She also asks about a tax-efficient plan to draw down her savings.
“Will I be able to stay retired or do I need to work longer?” Jill asks.
In this Financial Facelift, Hannah McVean, a certified financial planner with Objective Financial Partners Inc., looks at Jill’s situation.
Want a free financial facelift? E-mail finfacelift@gmail.com.
Here’s why you should be able to save more money closer to retirement
The amount you should be saving for retirement should vary depending on your “spendable income,” says Frederick Vetesse in this Charting Retirement article. Vetesse, former chief actuary of Morneau Shepell and author of the PERC retirement calculator (perc-pro.ca), takes a look at how, as you get older, you should be spending your paycheque here.
In case you missed it
These Canadians wish they had waited to take their CPP benefits. Here’s why
This is the latest article in an ongoing series, Planning for the CPP, in which Globe Advisor reporter Brenda Bouw explores the decisions behind the timing of when to take CPP benefits and reviews different aspects of the beloved and often-debated government-sponsored pension plan.
For many Canadians, the decision of when to start taking their Canada Pension Plan (CPP) retirement benefits is a difficult one. Some rely on advice from an advisor who runs the numbers. But even then, the decision often involves more than just math. Others make the decision on their own, based on information from friends and family, or without enough information.
In this article, five Canadians talk to Bouw about why they wished they had started taking their CPP payments later.
Find more articles in the series here. For more from Globe Advisor, visit our homepage.
A lot of people are in the dark about their expected retirement income - here’s how to fix that
The second-worst retirement planning strategy is to haphazardly save money in RRSPs and TFSAs, without any idea of how much income you’ll need when you stop working, says personal finance columnist Rob Carrick.
The worst strategy is to save minimally or not all, he says, but that may be out of your hands because of high living and borrowing costs. If that’s you, give yourself a temporary pass on retirement saving and revisit the matter in 12 months.
If you’re a retirement saver with no plan, consider buying a consultation with a financial planner at a cost of roughly $1,500 to $5,000, depending on the level of detail. Or, as an interim step, try some of the retirement planning tools available online at no cost.
In this article, Carrick lists three calculating tools to consider.
Retirement Q & A
Q: Can you explain the new trust reporting rules that the Feds just put into place?
We asked John Oakey, vice president, Tax at CPA Canada, to answer this one.
The Canadian Federal Government now requires trusts to report beneficial ownership information effective for taxation years ending after December 30, 2023. The rules define the beneficial owners as: the settlor, trustees, beneficiaries and any person who can exert control of the trust. The information that needs to be reported for these beneficial owners is: Name, address, date of birth (for individuals only), jurisdiction of residence and taxpayer identification number
There are listed exclusions to these rules where compliance is not required. Some of these exclusions are as follows:
- Trusts in existence for less than three months,
- Trusts that hold specific assets with total fair market value not exceeding $50,000 throughout the year,
- Graduated rate estates,
- Non-profit organizations and registered charities, and
- Qualified disability trusts.
The trust tax return along with schedule 15 are due by April 1, 2024 (Due date is 90 days after year-end of trust, which in 2024 would be March 30. (This falls on a Saturday, so the next business date is Monday April 1, 2024). Schedule 15 will need to be completed and included with the T3 trust income tax return to provide the beneficial ownership information to Canada Revenue Agency.
The problem with complying with these rules is determining if you have a trust. Individuals that intentionally set-up a trust, with general knowledge of trusts, would generally have no issue with identifying the existence of their trust, but for the average Canadian citizen with no knowledge of trusts, this could be a problem. Trust law is very complicated, and trusts can arise in many unsuspecting situations. CPA Canada is working with its members to gather and share information with Canada Revenue Agency on some of these unsuspecting situations to develop guidance for tax advisors and the general public.
So why now? Canada is a member of the Financial Action Task Force (FATF), which is the global money laundering and terrorist financing watchdog.
In October 2014, the FATF authored a report providing guidance related to its recommendations on transparency and beneficial ownership reporting, with the aim of creating a better system to determine the true ownership of corporations and legal arrangements. The report stated countries should enact measures to prevent misuse of corporate and other structures, or arrangements for money laundering and terrorist financing, by ensuring such arrangements are sufficiently transparent. In particular, countries should ensure there is adequate and accurate information on express trusts (including information on the settlor, trustee and beneficiaries), obtainable in a timely fashion by competent authorities.
These new requirements are the federal government’s response to these recommendations.
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.
