Nancy McDonald prunes the hydrangeas in her garden in Ottawa.Justin Tang/for The Globe and Mail
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Gardening is one of the most versatile retirement activities, ranging from growing a few flowers on the balcony to designing ambitious full-yard plant landscapes.
A survey by Dalhousie University researchers found 31 per cent of people who started food gardening in 2020 were between 54 and 72. Enthusiasts cite benefits including being active outdoors, fostering creativity and – particularly during the pandemic and amid rising grocery prices – having affordable and healthy homegrown food.
Gardeners throw themselves into the hobby for varying reasons and are always ready to offer tips. In this article, Kathy Kerr talks to four Canadian green thumbs who offer advice for seniors on how to dig in.
‘Retirement is the best job I’ve ever had,’ says this frequent traveller
In the latest Tales from the Golden Age feature, David Davidson, 68, talks about what it’s like to pull the plug on your career. “Retirement is busier than you might imagine – if you have a plan,” he says. Mr. Davidson explains how retirement brought him even closer to his wife, daughters and grandkids.
The financial detail everyone should know before they retire
Before you retire, you should know how much annual income your savings, pension and government benefits will generate over a reasonable lifespan, writes Rob Carrick, the Globe’s personal finance columnist.
“Clearly, a lot of people are heading into retirement without this key number in hand,” he writes. In a recent Royal Bank of Canada survey of people aged 50 and up, 83 per cent said they have saved less than they think they’ll need in retirement and almost one-third think they will outlive their savings by 10 years or more.
Read the full article here.
Can this single mother afford to retire and sustain annual expenses of $70,000 a year?
Beth is starting a new chapter in her life and, naturally, has some concerns.
“I am a recently divorced mother of two children,” Beth writes in an e-mail. “I think I am financially stable, but frankly, I’m scared to death about having enough money for retirement now that I’m on my own,” she adds. “I need as much help as I can get.”
Beth is age 52, her children 12 and 13. She has a well-paying executive job, earning about $140,000 a year plus a substantial bonus. She has no company pension. The small-town Ontario house where she now lives is valued at $1.5-million with a mortgage of about $545,000. Beth has some cash in the bank – her share of the proceeds from selling the former family home – and wonders whether she should invest it or pay down her mortgage. Both she and her former husband contribute to a family registered education savings plan for the children’s postsecondary education.
“I have lived and worked in many places in the world and want to have enough money in retirement to continue travelling and to provide for and visit my children, wherever they might end up,” Beth writes. Her retirement spending goal is $70,000 a year. “When can I retire?” Beth asks.
In the latest Financial Facelift article, Nushzaad Malcolm, a financial planner at Henderson Partners LLP in Oakville, Ont., looks at Beth’s situation.
In case you missed it
Why you may need to change your executor as you get older
Most Canadians eventually get around to estate planning and putting their financial affairs in order – even if that often occurs later in life than it should. But creating a last will and testament really needs to involve more than a quick visit to a lawyer’s office for a document signing.
For those nearing or entering retirement, it is critical not only to ensure your will is up to date, but also that you have chosen an executor(s) up to the challenge of carrying out your final wishes.
Given that your executor acts as your voice after you die, Canadians need to put a lot more thought into who they select for the role, says Darren Coleman, senior portfolio manager, private client group, with Coleman Wealth at Raymond James Ltd. in Toronto.
“People need to change this misconception or idea that it is an honour to choose someone as your executor,” he says. “It is a sign of tremendous trust and confidence in someone else, but at the same time, you’re also handing someone a remarkably difficult burden.”
That burden includes time-consuming administrative duties such as dealing with banks, insurance companies and government as well as dealing with the deceased’s family members, who may or may not be beneficiaries of the estate’s assets. Paul Brent reports.
Should you move closer to your kids when you retire?
No longer needing to live near work, some retirees face a big decision: move closer to kids and grandkids or strike off in an entirely different direction.
John Hamblin, 75, sees the move he and his wife Peggy made last fall from Halifax to live near their daughter and granddaughters in Saint John, N.B., as “a benefit and a pleasure.”
If his daughter and her partner are too busy to pick up their 12- and 14-year-old kids after school, the Hamblins can do the job. They play cribbage and card games. Even when the Hamblins are at their vacation home in Arizona, there are regular video calls with their daughter and granddaughters.
The Hamblins had lived in Halifax for 20 years. Their new home in the Saint John suburb of Rothsay is four hours away from Halifax by car, so if they want to visit old friends, they still can, Mr. Hamblin says.
Statistics Canada shows close to 18,500 Canadians 65 and older moved between provinces in 2020-21. Add in those who move within their home province and that’s a lot of older adults on the move.
Some aren’t moving closer to their kids, as Kathy Kerr reports
Ask Sixty Five
Question: My wife and I retired a couple of years ago and will wait until age 70 to collect Canada Pension Plan (CPP) and Old Age Security (OAS). Meantime, we live on combined institutional pensions of $21,720 per year and are drawing down a total of $60,000 annually from registered retirement savings plan (RRSP).
Question 1: Is there any tax advantage to withdrawing from an RRSP versus a locked-in retirement account (LIRA), or does it matter?
Question 2: We will convert both RRSPs and LIRAs to income accounts at age 71 as required, but is there any tax advantage to doing a partial conversion of those registered funds at this point to carry us through the next couple of years until age 71?
We asked Laura De Sousa, a wealth adviser at Nicola Wealth in Vancouver, to answer this one:
Answer to Question 1: An important point to clarify is that RRSPs allow the account holder to make withdrawals throughout the year; a LIRA does not. Assuming you are past the age of 55, you can withdraw funds from the LIRA by converting the account to a life income fund (LIF) or a locked-in retirement income fund (LRIF), which are tax-sheltered accounts used to pay out the accumulated value of a locked-in RRSP. The conversion may be partial or in full. This is the only way to access the funds. So, to answer your question, the taxation of the plans is essentially the same. When funds are withdrawn from either type of account, the income is fully taxed in the year the withdrawal is made, and a T4RRSP/T4RIF slip is issued.
Answer to Question 2: The income from the plans is taxed the same.
I can see there being a benefit of converting a portion of the accounts to an RRIF and LIF: Instead of instructing your financial institution for the lump sum RRSP withdrawals, you can set the payments out systematically to occur every month versus one larger lump sum. Also, the RRSP withdrawal may incur deregistration administration fees, where the RRIF/LIF should not. This will depend on your financial institution.
If you plan to withdraw the entire $60,000 from an RRSP ($30,000 each) in one lump sum, the withholding tax rate at source will be 30 per cent; so you might find yourself prepaying more in tax at the time of the withdrawal and remitting this to Canada Revenue Agency, only to receive a refund come tax time.
It sounds like, with your annual income needs, your average tax rate may be lower than 30 per cent. Converting the account to an RRIF/LIF will give you the option of setting up the monthly recurring withdrawals and depending on the value of the account, withholding tax at source may be none – if your minimum annual payment is sufficient to cover your income needs.
Of course, please consider this insight with discretion. Everyone’s financial scenario is unique and there may be some additional planning to consider.
Have a question about money or lifestyle topics for seniors, or want to suggest a story idea for the Sixty Five series? Please e-mail us at sixtyfive@globeandmail.com and we will find experts and answer your questions in future newsletters.