Once you achieve Financial Independence, you may choose to leave salaried employment but with decades of vibrant life ahead, it’s too soon to do nothing. The new stage of life between traditional employment and Full Retirement we call Victory Lap, or Victory Lap Retirement (also the title of a new book to be published in August 2016. You can pre-order now at VictoryLapRetirement.com). You may choose to start a business, go back to school or launch an Encore Act or Legacy Career. Perhaps you become a free agent, consultant, freelance writer or to change careers and re-enter the corporate world or government.
Lots of media coverage this week about the (relatively) modest expansion of the Canada Pension Plan. As I noted in the print edition of Wednesday’s Financial Post (and online), this isn’t going to help almost-retired baby boomers in any material fashion but it’s certainly a welcome development for the generations that follow, including the Boomers’ own kids.
As I speculated in the headline of sister site FindependenceDay.com, you could argue that a slightly sweeter CPP package of benefits should at least marginally speed up the arrival of the Millennials’ collective Findependence Day. However, I also noted that — as in my own case — there is still an incentive to delay the receipt of CPP benefits. In a way, Boomers who don’t take “early” CPP at 60 and opt to wait until closer to 70 are choosing to almost double their ultimate benefits.
There’s still an incentive to delay receipt of benefits
The third instalment of my new bimonthly Retired Money column at MoneySense.ca has just been published online and focuses on the important topic of pension splitting, or pension income splitting.
As the piece observes, pension splitting can be manna from heaven for retired or even semi-retired couples where one is collecting a generous Defined Benefit or other employer pension and the other is not.
Nor is it as complicated a process as it may seem at first blush: you don’t have to actually divide such a pension and send some to each spouse: it all happens at tax-time when for tax purposes you choose what percentage of the pension each spouse should receive. Naturally there are multiple things to consider, such as other income sources, relative tax brackets and so on.
But the bottom line is that in many cases, it should result in thousands of extra after-tax dollars a year in the pockets of the couple as a unit. And that’s how couples should behave, isn’t it?
For more information about pension income splitting, a good place to start is the Canada Revenue Agency’s web site, and in particular this explanation. Note too that it includes a short video.
Time is money, as the saying goes. And if you’ve got extra time on your hands but not a lot of extra money, maybe you’ve thought about starting up a side gig. Whether or not you decide to turn your side job into a flourishing career of its own, it won’t really feel like a job if you’re enjoying yourself at the same time. Plus, having multiple streams of income is highly recommended as a safety net.
With the following side jobs, you can prevent yourself from getting run down and ragged by being your own boss. You can set your own schedule, accept or decline jobs as your availability dictates, and adjust your prices so that it’s all worthwhile in the end.
You can start getting clients by reaching out to friends and family and growing via word of mouth from there. In time, you might find that a web presence will help you reach even more people. It doesn’t necessarily have to be a website; a Facebook page can be just as effective if managed well. In some cases, professional certifications can also bolster your reputation.
House Sitting
House sitting is an excellent way to earn some extra cash on the side, and it’s a very relaxed gig. You’ll be responsible for making sure that nothing goes awry while the homeowners are away. Your mere presence will deter would-be burglars, but house sitting goes beyond just sitting in a house, as you may need to handle other emergencies or simply bring in the mail and take out the trash.
There’s no shortage of books that focus on financial readiness for retirement. But what about emotional or psychological readiness for retirement? Lyndsay Green’s just-published Ready to Retire? (Harper Collins, Toronto, 2016) puts a microscope on the less-scrutinized emotional and lifestyle issues of retirement. She interviewed 44 Canadian males and 17 of their spouses about common retirement fears (for those still working) versus the reality of retirement once it’s actually achieved.
Generally, these males either planned for retirement or – in the all-too-common case of sudden terminations – found themselves unexpectedly in the land of retirement years or even decades before they expected it.
But whether planned or not, most required a period of adjustment that can take years: not surprisingly, retirement is right up there with divorce, death and job loss in creating a traumatic new stage of life.
Mental Map depicts common emotions about Retirement
The book’s frontispiece conveys the common emotions in a graphic that I think should have been the cover. ( Continue Reading…
Valletta, the Capital City of Malta in early morning.
By Ashley Watson
Special to the Financial Independence Hub
If you are nearing pension age, chances are you are thinking about settling down in a foreign retirement destination.
Low cost of living, better climate, adequate healthcare facilities, convenient transport system, and friendly people could be your next small world. Obviously, you might have personal preferences but if you’re looking for options, here are five of the top retirement destinations for 2016:
1.) Malta
Malta is a southern European island country that’s small in size but densely populated. Spread across 122 square metres, the country has a headcount of over 450,000. The reason why it’s so densely populated is because of the luxuries it offers to its residents. Over here, you get more than 3,100 hours of sunshine every year and the average temperature is only around 19 degree Celsius. Any senior citizen would love that! Most of the local residents are fluent in English and there are multiple tourist attractions to explore.
2.) Portugal
Portugal is famous for its pleasant climate, good healthcare centers, and rich cultural heritage. Even if you are getting a minimal pension amount, you will find it incredibly easy to live here. The low cost of living is one of the major plus points about settling down in this country. In fact, you could buy three homes in Portugal for the same price that you would spend on a single home in France. What’s more, Portugal is also the third biggest expat community in Europe only next to Spain and France.
3.) Spain
Spain has the biggest expat community in Europe and the crime rate is really really low here. If your age isn’t going to stop you from exploring new places, then you will love Spain. There is lots to see and experience in this part of the world. The country is a unique mix of modern and traditional cities. Head to major cities like Barcelona and Madrid to see the developed side of Spain and visit islands such as Menorca, Ibiza, and Tenerife to immerse yourself in the nature.
Tropical sea landsape. Philippines, El Nido.
4.) Philippines
The Wall Street Journal named Philippines as one of the best places to retire in the world in 2016. The country is home to more than 7,000 tiny islands and is widely preferred by western retirees, mainly because of its low cost of living. It costs only about 300 pesos or $7 to consult a doctor and X-rays are only about $20. Plumbing and carpentry services are only about 400 pesos or $10. Dirt cheap, right? If you love to spend time outdoors, then try your hands at Golf. It’s the most popular retirement sport in the country.
Editor’s Note: Retirees considering this destination may wish to monitor the news about kidnappings in southern Philippines. See for example this recent National Post news story headlined Visit the southern Philippines at your peril.
5.) Thailand
If you are looking forward to living a completely new lifestyle from that of United States or the United Kingdom, then you must check out Thailand. The country boasts a number of renowned temples including Wat Phra Kaew (Temple of the Emerald Buddha), Wat Pho (Temple of the Reclining Buddha), and Wat Indravihan and some historic buildings such as The Grand Palace (built by King Rama). Thai cuisine is one of the most popular food in Asia and this is the best place to taste them. Foodies can look forward to relishing a wide variety of dishes here.
What’s more, cheap property prices and discounted fuel prices are other factors that have drawn over 41,000 expats over the years.
Conclusion
Of course, there are dozens of other countries to settle down and lead a happy life after 60. But, we’ve picked some of the retirement destinations that are predominantly suggested by travel blogs and globetrotters. If you have retired in any other country and having a great time, please let us know in the comments.
Ashley Watson is a globetrotter who blogs mostly on travel and tourism. She is the chief writer and social media strategist at GolfPh.
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Lots of media coverage this week about the (relatively) modest expansion of the Canada Pension Plan. As I noted in the print edition of Wednesday’s Financial Post (and online), this isn’t going to help almost-retired baby boomers in any material fashion but it’s certainly a welcome development for the generations that follow, including the Boomers’ own kids.
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