Jennifer Harder, who retired in 2022 at the age of 58, took on part-time work after reading an article about retirement as a time for reinvention.Rafal Gerszak/The Globe and Mail
Content from The Globe’s weekly Retirement newsletter. Sign up here
“I retired in June, 2022 at 58 after working for almost 30 years in the financial services industry,” says Jennifer Harder, 60, of Nanoose Bay, B.C. “When the pandemic hit in early 2020, I moved from Vancouver to my home on Vancouver Island and worked remotely. When it became apparent that I would have to move back to Vancouver to work in the office, I decided to retire instead. I liked my lifestyle on the Island. I live on the ocean and can whale watch from my balcony. I didn’t want to return to the city.”
For Harder, retirement felt peaceful at first, she says, and she did not miss the Monday-to-Friday work commitment and the stress that came with it. However, in hindsight, she adds, she should have spent more time figuring out what she would do in retirement. “It’s one thing to say, ‘I’m going to travel and be active,’ but you can’t travel all the time, and there’s only so much golf and pickleball you can play.”
Harder looked into doing some part-time or casual work that would keep her busy. “I considered being a retirement coach and started taking a course on how to do it, but I realized quickly that getting set up and finding clients would be challenging. I didn’t want to work that hard.”
I ended up finding casual work as a travel consultant. I do this work for about 20 hours a month, helping people book trips. It’s a great fit because I’ve travelled to more than 40 countries.”
Harder is working part-time at a clothing boutique in a small town near her home. “I remember going into the store one day and saying, ‘This looks like a fun place to work.’” It turns out they were looking for part-time help during the busier summer months. It’s a great retirement job, says Harder, because it’s casual, and she is not committed to it for a long time. She also loves helping women find clothes that make them look and feel good, she adds.
“I don’t worry about money in retirement. I have been saving and investing for my retirement for years and am careful with my money. I was an investment adviser for 10 years, but I consulted with another adviser about my retirement plan. It was helpful to have someone to bounce ideas off of and keep me on track.”
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.
For more from Globe Advisor, visit our homepage.
Eight ways to steer clear of financial fraud
Historians have documented financial fraud as far back as 300 BC, writes Mark McGrath in this Personal Finance article. In a scheme known as “bottomry,” shipowners would borrow money, offering their ship or cargo as collateral. If the ship sank at sea, the borrower didn’t have to repay the loan, and unscrupulous shipowners would intentionally sink their ships or falsify losses to avoid repaying debts.
Financial fraud today has evolved into a significantly more sophisticated and widespread threat. From Ponzi schemes to crypto scams, Canadians must be vigilant and learn to spot the signs of fraud to protect themselves from these complex and cunning tactics.
Here, eight things to keep in mind.
How to protect an inheritance from the risk of divorce
A substantial and growing share of first-time homebuyers are now relying on early inheritances and gifts from family to bolster their down payments. And, says Kelsey Rolfe in this Personal Finance article, that is creating new complications for parents seeking to ensure that family money remains in their children’s hands in the event of a marital dissolution, according to financial advisers and lawyers.
“It’s definitely a topic of discussion when it comes to gifting,” says Jason Heath, managing director and certified financial planner at Objective Financial Partners in Markham, Ont. “When a partner is involved, it’s important to consider the implications. When you give money, particularly if it’s commingled with other money or used to purchase a matrimonial home, in the event of a future relationship breakdown, oftentimes half of that money ends up being lost in a divorce.”
Morgan Ulmer, certified financial planner at Caring for Clients in Calgary, notes this issue raises an important question parents need to consider: how much control they want to exert over their adult children. “That aspect to it also provides complications, both logistically but emotionally with your child,” she says.
Almost one-third (31 per cent) of first-time homebuyers received financial help from family members in 2024, according to a June report from Canadian Imperial Bank of Commerce economists, up substantially from only 20 per cent in 2015 and continuing to climb even amid the recent decrease in home prices. The average gift amount was $115,000 this year, 73 per cent higher than 2019 levels.
Read the full article here.
In case you missed it
How long will you live? Retirement saving is about more than crunching numbers
When it comes to retirement planning, many Canadians are flying blind because we have a tendency to underestimate how long we’ll live, writes Preet Banerjee in this Opinion article.
One genetics professor from Harvard has suggested that the first person to live to 150 is likely already alive. But I suspect they’re very young today – and no one reading this column will find out if that prediction comes true.
Nonetheless, according to a new paper published in the Journal of Behavioural and Experimental Economics, most people tend to underestimate how long they’ll live, especially as they get older. Underestimating your lifespan could lead to undersaving for retirement. After all, if you think you’ll only live to 80, you might not save enough to last until 90 or beyond.
Here’s a quick thought experiment you should do right now: Take a moment to estimate the age at which you think you’ll die. Now, separately consider your ideal retirement age and how long you’ll need your money to last after retirement. Is there a mismatch between these two estimates?
Read more here about what the study revealed.
Preserving online photos and personal accounts after death requires careful planning
After Matt Thompson passed away in 2015 in the U.K., his widow Rachel Thompson fought for more than three years for a court order that allowed the couple’s young daughter to see the photos Mr. Thompson had stored in his Apple Inc. account. Similarly, when Ric Swezey died in 2017 in the U.S., his husband Nicholas Scandalios waited two years before he could show his two children the photos locked behind Mr. Scandalios’s Apple login.
These two cases, notes Alison McAlpine in this Investing article, highlight the risks of failing to plan for digital assets with personal value in estates.
“More and more of us are living a significant portion of our lives online, [and] digital assets have the ability to reveal us as we lived and in a way no other assets we have do,” says Andrew Higdon, a trusts and estates lawyer with KPMG Law LLP in Ottawa.
“I don’t think you can have a complete estate plan if you haven’t turned your mind to this aspect of a person’s life.”
Personal digital assets can include photos and documents stored in the cloud, social media accounts, websites and blogs, genealogy websites and even accounts someone may prefer remain private after death, such as dating apps.
But, writes McAlpine, without appropriate authority granted to an executor or attorney for property, the fiduciary may be denied access to digital assets. Also, without clear instructions in place, the fiduciary may have to guess at the deceased’s preferences – for example, about whether to remove or memorialize an account.
Generally, she adds, the best place to indicate after-death preferences for digital assets is directly on the service provider’s platform – but only some offer this option. For example, Google has an inactive account manager while Apple and Facebook allow users to name a legacy contact.
Read the full article here.
This is the second article in a series about managing digital assets in estates. Read the first article here and look for the third and final piece here.
Retirement Q & A
Q: I am 64 and want to retire at the end of this year. Our Treasury Board just approved the transitioning of my employer’s defined contribution pension plan (DCPP) to the Ontario Public Services defined pension plan (OPS). There’s a cost to buying back pension credits with the OPS, which are for life and indexed for inflation, and I can only afford to buy back 25 years of service. Where do I put my pension money? My bank and financial advisor want me to bring my DCPP to them; as does OPS; and the organization that holds the DCPP said they want the funds to remain with them. How do I know I will get a good enough return to ensure I have enough money to last me, and leave something for my children?
We asked Nicole Ewing, Director of Tax and Estate Planning at TD Wealth, to answer this one.
A: These are important questions and carefully considering the factors that will influence where you move your pension money is essential. In terms of a defined contribution pension plan (DCPP) vs. defined benefit pension plan (DBPP) – which is what the OPS is, the following factors should be considered:
1. A DBPP is often perceived as a more secure form of pension plan (from the pensioner’s perspective) as it provides a greater level of security in terms of regular monthly income for the pensioner’s lifetime. The amount of the pension benefit is known in advance (based on factors such as age, earnings and years of service).
With a DBPP, pensioners do not need to actively monitor the performance of an underlying investment or asset mix. And, depending on the features of the particular DBPP and the pensioner’s personal circumstances, the DBPP may also offer the pensioner additional benefit options such as survivor benefit payments, guarantees and indexation of payments, for example. However, where there are health concerns and/or shortened life expectancy, a DBPP may provide less flexibility vs. a DCPP once collecting the retirement benefit, as payments would typically stop when the pensioner passes, unless there is a guaranteed payout and/or survivor benefit available.
2. With a DCPP, pensioners must decide how their money is invested. This may be done through an employer sponsored investment manager, an investment manager selected by the pensioner (if they were to transfer their DCPP to a locked-in vehicle), or the pensioner could make their own investment decision through a self-directed brokerage (again, if they were to transfer the DCPP to a locked-in vehicle). The performance of the underlying investments, and any corresponding fees for investment management, will impact how much and for how long the proceeds will last throughout decumulation.
To replicate a DBPP form of regular income from a DCPP, a pensioner would typically look to purchase a life annuity or conduct monthly draws from a locked-in retirement plan (i.e., life income fund [LIF]/retirement income fund [RIF]) – with the use of a LIF/RIF. However, there can often be longevity risk (the risk of outliving your savings) associated with LIFs/RIFs depending on the pensioner’s life expectancy, spending needs, and the underlying investment performance and fees within these accounts. With that said, during the payout period/decumulation phase via a LIF/RIF, a pensioner with health concerns and/or shortened life expectancy may have additional options when it comes to planning for a spouse, children or charities as the residual proceeds remaining in a LIF/RIF can typically be passed on.
An experienced financial planner or investment professional who delivers holistic wealth planning would typically conduct a robust discovery of your financial circumstances, including your goals and objectives, and provide you financial illustrations for different scenarios (via projected cash flows, net worth and estate tables) to demonstrate how your goals/objectives may be fulfilled and provide guidance on what further action may need to be taken.
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.
