Diana Gibbs, who is new to birdwatching, during an outing in Toronto on Feb. 28.Peter Power/THE GLOBE AND MAIL
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Spring migration, winding down to retirement and the pandemic made a birder out of Diana Gibbs.
In May, 2020, the Toronto resident went with a birdwatching friend to the park on the Leslie Street Spit on Lake Ontario. Ms. Gibbs, now 66, was beginning to retire from her career fundraising for human rights and social justice organizations. “The woods were just alive with sound,” Ms. Gibbs says. “It was really quite striking … a memory that stayed with me.”
Ms. Gibbs joined the legions of Canadians who have discovered the joys of birdwatching, a flexible and addictive hobby that’s growing in popularity during the pandemic. Birds Canada reports that the online bird checklist platform, eBird Canada, saw a 30 per cent jump in people submitting data between 2019 and 2020, says Jody Allair, the organization’s director of community engagement. The number jumped another 14 per cent to 31,961 users in 2021, he says. Kathy Kerr reports.
Too few Canadian seniors are deferring retirement benefits
Only a tiny fraction of Canadian seniors are deferring their public retirement benefits, a decision that could cost each of them tens of thousands of dollars in foregone payments, according to data provided to The Globe and Mail.
As Patrick Brethour reports, Canadians have been able to delay the start of Canada Pension Plan (CPP) benefits since 1987, and since mid-2013, Old Age Security (OAS) payments as well. Delaying those benefits adds thousands of dollars in annual payments. For middle-income seniors who live well into their 80s, the decision to defer could add up to tens of thousands of extra dollars.
Why the pandemic is a ‘dress rehearsal’ for planning a retirement beyond finances
The main goal of retirement planning for most Canadians has been saving enough money to fund that stage of their lives, but the COVID-19 pandemic has also forced them to examine the type of life they want to live in retirement.
Advisors are becoming even more integral in helping clients navigate the non-financial aspects of retirement planning as the pandemic has led many to consider what they may have overlooked when making decisions for the future, such as whether they plan to keep on working.
In this article, Globe Advisor editor Pablo Fuchs spoke with Susan Latremoille, co-founder and managing director of Next Chapter Lifestyle Advisors and a former wealth advisor, on how advisors can get to the heart of what really matters to their clients and help them plan for it.
Plans for early retirement need a rethink
Ted and Natalie have well-paying management jobs, Ted in the private sector and Natalie in government. He is age 52, she is 51. They have two children, 18 and 21. The younger one still lives at home.
Ted has earned good income over the past five years, averaging about $200,000 a year including commission. His base salary is $115,000. Natalie is making $118,000 a year, plus a bonus that ranges from $5,000 to $25,000.
Natalie and Ted bought a rental property not long ago with a small down payment; the property is barely breaking even. Natalie recently joined her defined benefit pension plan and wonders whether she should use funds from her previous employer’s registered pension plan to “buy back” service in her new plan.
Ted, who had a recent health scare, is looking to the day they can both retire, travel extensively “while we can,” and winter in a warmer climate. Short term, they want to replace one of their cars and do some renovations to their house. Longer term, their goal is to retire from work in six years with a budget of $140,000 a year after tax.
In the Globe’s latest Financial Facelift column, Matthew Ardrey, a vice-president and financial planner at TriDelta Financial in Toronto, looks at Ted and Natalie’s situation.
In case you missed it
What you need to know about getting a knee replacement
Bill Stevenson has been waiting years for a new left knee. The active 84-year-old, a former civil servant, had his right knee replaced seven years ago. “I played squash three times a week for about 25 years,” he says. “The surgeon thought all that stopping and starting wore out the meniscus in my knees.”
The right knee surgery happened fairly quickly, but the procedure for the left has been pushed back several times due to COVID-19. Mr. Stevenson is trying to stay positive, but his lack of mobility is frustrating. “I use a cane if I’m going more than half a block,” he says. “After a block, I have to slow down and rest.”
Mr. Stevenson is one of thousands of Canadians waiting for a knee replacement, a procedure that even pre-pandemic had wait times of six months or more, according to the Canadian Institute for Health Information. Anna Sharratt reports.
How to keep your tattoos looking good as you age
Monica Hamilton got her first tattoo at age 20 – a fairy on the left side of her chest. She loved it and over the years got several more symbolizing people she loves and landmark moments. But after living a life and raising two children, she noticed her fairy had changed along with her body. “By my early 30s, I had had two kids and had gained weight. The fairy was stretched and looking long and skinny,” says Ms. Hamilton, 49, an investment advisor associate from Sylvan Lake, Alta.
She opted to have a tattoo artist touch it up, extending the fairy’s wings, plumping up the profile shape and brightening the colours. She loves it. “My body continues to change and the tattoo changes with it,” she says. “I don’t think I will touch it up again. She and I are aging together.”
Tattoos, like the skin they’re in, are subject to the sands of time. Dene Moore reports
Ask Sixty Five
Question: I hear a lot about the benefits of taking my Canada Pension Plan (CPP) and Old Age Security (OAS) later to get a higher return. What are the pros and cons of taking these at age 60, 65 or 70? Does it really make that much of a difference? I guess it depends on your lifestyle but isn’t a bird in hand better? After all, we don’t know how long we’ll live. What are your thoughts?
We asked Mike Preto, an advisor at Hillside Wealth Management, to answer this one:
Yes, you can begin receiving the CPP retirement benefit as early as 60 and as late as 70. The downside is you receive 0.6-per-cent less for every month you take it before 65. If you take it at 60, you only receive 64 per cent of what you would have received at 65. For every month you take the CPP after 65, you receive 0.7 per cent more. At 70, you would receive 42 per cent more than you would have received at 65.
For the OAS, the earliest you can start is 65 and you can delay as late as 70. For every month you delay taking the OAS past age 65, you will receive an additional 0.6 per cent. If you delay the full five years, then you will receive an additional 36 per cent.
If you’re eligible for full benefits – this is not a given so check your estimated benefit amounts accordingly, on both the CPP and OAS – then here’s what you can expect to receive:
- At 60: CPP – $802.30 per month.
- At 65: CPP – $1,253.59 per month. OAS – $642.25 per month.
- At 70: CPP – $1780.10 per month. OAS – $873.46 per month.
The pros and cons are simple: Take the pensions early and you’ll receive less, sooner. Take the pensions later and you’ll receive more, eventually. If you take the CPP at 60 and live beyond age 74, you would have been better off taking the CPP at 65. If you wait to take your CPP at 70, you need to live until 82 to break-even. If you take the OAS at 70, you need to live until 84 to break-even. At 65, a married couple could receive as much as $3,800 per month. Yes, these numbers are meaningful.
We’ve seen many people take their CPP early, while working, who intend to invest the pension up until retirement, only to see them spend the pension and their salary. This led them down the wrong path; they ended up overspending during the final years of their careers and had a meaningful lifestyle adjustment to make while transitioning into retirement. Both the CPP and OAS are 100 per cent taxable. If you take the CPP while working, you are likely going to give more to the Canada Revenue Agency.
Then there’s the OAS clawback: In 2022, for every dollar you earn over $81,761, 15 cents will be clawed back from your OAS. If you make more than $133,141 per year, all of your OAS will be clawed back.
There are many factors to consider and it’s impossible to truly know the best time to start collecting. To keep things simple, at my firm, we recommend people take these benefits when they need them. For example: If you’re married, and retire before your spouse who earns enough for the two of you to live the life you want, postpone it. If you’re single, retired and eligible to receive the benefits, take them.
Of course, these are general recommendations and it’s best to work with a professional who can take a detailed look at your situation, develop a plan and make sure all of the factors have been considered.
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.