Longevity & Aging

No doubt about it: at some point we’re neither semi-retired, findependent or fully retired. We’re out there in a retirement community or retirement home, and maybe for a few years near the end of this incarnation, some time to reflect on it all in a nursing home. Our Longevity & Aging category features our own unique blog posts, as well as blog feeds from Mark Venning’s ChangeRangers.com and other experts.

Book Shop Remix: Where would you shelve Retirement?

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By Mark Venning, ChangeRangers.com

Special to the Financial Independence Hub

 

If you slid into your virtual bookshop to look for a book on the subject of Retirement, where would you begin? A keyword search would likely begin with the phrase “books on retirement” and …

Kaboom! An explosion of titles appear. Depending on your mindset, where your thinking was at a given moment, what triggering event gave rise to a conversation, you would gravitate to where? Titles such as The New Retirementality – Redefining Retirement: New Realities for Boomer Women– How to Retire Happy, Wild, and Free – Purposeful Retirement – What Retirees Want. Only a slice of texts on an almost endless bookshelf, which began to expand after 2004.

In the year 2001, while working as a consultant at a career services firm, (aka Career Transition/Outplacement), a managing partner asked me to deliver a Retirement program. For the first time since the late 1980’s, a corporate client suddenly requested a set of workshops for their employees approaching what they prescribed as retirement age. When I looked through the thick Retirement binder with its referenced reading resources, I ached in the head after what I read.

Sparing the colourful expletives, my response to the managing partner the next day was that I needed to re-design the whole thing before I dared to set foot inside that corporate boardroom. We needed to not only be contemporary, but we also had to be futuristic, to constantly respond to changing attitudes on what I then described as later life journeys as opposed to Retirement. The trouble was it would all seem too cryptic, too ethereal in concept unless I spoke of Retirement.

In prep for the Retirement re-design, I scoured bookshelves to see what new thinking was prevailing at the time and, to my disappointment, there wasn’t much that ground breaking. Much of the material was from the mid to late 1990’s. When you walked into a bookshop, you would find these “Retirement” books in the Business section, likely under the sub shelf “Financial Planning.” The issue with many of these was that specific references became quickly time stamped “out of date.”

Scouting out the extravaganza of Retirement books

While still shelving Retirement books in the Business section, they are usually broken into two categories – Financial Planning and Lifestyle Planning, you may wander into the Careers section – Retire Retirement: Career Strategies for the Boomer Generation for example. With luck, visit Self Help (DIY retirement is a thing). One recommended book I found sits in the Christian Living section. Try fiction! Yes, there are those too; and no doubt, somewhere out there is a Boomer Retirement book club discussing the latest find.

Over my twenty years of scouting out the extravaganza of Retirement books there have been a few peaks in inspired writing and in some cases the writing, aimed at a corporate audience, advised on how organizations should be prepared to “survive the graying of the workforce” and be ready for the “looming wave of Boomer retirements.” Yet there is a trip wire here.

A funny thing happened on the road to Retirement. Where I live, in Ontario Canada, even with the provincial government prohibition of mandatory retirement (with the odd exception) in 2006 there continue to be sinister ways Retirement conversations with employees occur in the workplace. Continue Reading…

Your most valuable asset

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By Michael Meyer

Special to the Financial Independence Hub

What is your most valuable asset?

If you are like most Canadians, you may answer your investment portfolio or your home. What if I said it was your time?

If you can imagine your life as a timeline, consider three milestones that are up ahead:

1.) Your healthy life expectancy

2.) Your estimated life expectancy

3.) Your 100th birthday

With diet and exercise, you are able to push out the first two, and give yourself a healthier and longer life.  In the near future, it is possible that with medical advances both one and two may exceed your 100th birthday.  These adjustments are already being considered for pension portfolios.

Now what if I said each of those future years on your timeline are not of equal value?

How should you compare your 40s to your 60s? How do you value those years differently, and how do you weigh your spending in each year for an optimal result?

Next, I want you to think about a stacked timeline, with a separate line for each of your family members.

Certain years are more pivotal than others

You will quickly see that certain years are more pivotal than others. The years your children leave the nest, or the years after the first partner hits retirement.  What about when your parents need help, and your role shifts and becomes that of the caretaker? Predicting health outcomes is a science, and a probability can be assigned to each year of your future. It is helpful for planning purposes to be aware of these milestones, and also to understand how you differ from the average person. Continue Reading…

How to age gracefully

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How can you age gracefully? What exercise, diet, or wellness tips should people in their 50s follow?

To help those in their 50s age gracefully, we asked business professionals and marketing experts this question for their best wellness tips. From meditating every day to keeping up with good dental health, there are several great exercise, diet, and wellness tips that may help you age gracefully.

Here are 10 exercise, diet, and wellness tips for people in their 50s:

  • Give Yourself Permission to Take Care of Yourself
  • Mediate Everyday
  • Give Your Body What It Loves
  • Customize Your Routines
  • Focus on Mental Wellness
  • Minimal Processed Food
  • Get Some Fresh Air
  • Dental Health
  • Realistic Goals and Consistent Action
  • Low Impact Workouts

Give yourself permission to take care of yourself

Adopting healthy habits is key to a lifetime of health and wellness.  Finding ways to reduce stress such as meditation or even a walk and focus on a clean diet that energizes rather than slows you down. In addition to physical exercise, exercising your mind is key to aging gracefully. Reading often, learning new skills and information, social interaction, and even using meditation to clear your mind. Giving yourself permission to take care of you, is key! — Carol Bramson, Side by Side

Meditate every day

It may sound cliche, but meditation is the best way to age gracefully! I am a firm believer that if you want to look better on the outside, you must start on the inside. By meditating every day, you can cleanse your mind and rid yourself of the stress and negative thoughts that weigh you down. You will be surprised by how much of a difference mediation will truly have on your skin, posture, and overall glow: it is the best-kept beauty secret since ancient times. — Nikitha Lokareddy, Markitors

Give your body what it loves

Although I am not in my 50s, I have found that as I have matured, I have gotten to know myself and my body a lot better! For me, aging gracefully is all about simplicity and consistency. I know what foods my body loves, what workouts improve my physical and mental strength, and what products I can’t live without. All in all, my tip is to stick to what you know. — Vanessa Molica, The Lash Professional

Customize your routines

As someone who works in healthcare, I have a unique perspective on how you can age gracefully inside and out! Many people think that copying the workout and skincare routines of beautiful celebrities will do the trick, but the key is to customize your routines for your body. The only way to do that accurately is to consult professionals. Dermatologists, nutritionists, and trainers have the tools and knowledge to ensure that your age is nothing but a number! — Dan Reck, MATClinics

Focus on Mental Wellness

Whether that means tackling daily brain exercises or relaxing your mind on a recreational vacation, focusing on mental wellness is one critical area for people to focus on in their fifties. Keep the mind clear and fresh, because the mind leads the body. — Randall Smalley, Cruise America

Minimal Processed Food

Staying active and reducing stress are two key elements that contribute to aging well. When it comes to diet, there’s a large fixation on certain “superfoods” that are key to longevity. In reality, eating a variety of wholesome, minimally processed foods is key to keeping down inflammation in the body and aging well. Because the eyes can show acute signs of aging, opting for a safe and effective treatment like an eye lift is a great way to age with grace. — Michael Herion, Carrot Eye Center

Get some fresh air

As you get older, lots of people lose their sense of adventure and stop enjoying all the great outdoors have to offer. Regardless of whether you prefer a light hike, a horseback ride, or a day on the water fishing, get outside! Continue Reading…

Variable Percentage Withdrawal: Garbage In, Garbage Out

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By Michael J. Wiener
Special to the Financial Independence Hub

 

The concept of Variable Percentage Withdrawal (VPW) for retirement spending is simple enough: you look up your age in a table that shows what percentage of your portfolio you can spend during the year.

The tricky part is calculating the percentages in the table.  Fortunately, a group of Bogleheads did the work for us.  Unfortunately, the assumptions built into their calculations make little sense.

If we knew our future portfolio returns and knew how long we’ll live, then calculating portfolio withdrawals would be as simple as calculating mortgage payments.  For example, if your returns will beat inflation by exactly 3% each year, and your $500,000 portfolio has to last 40 more years, the PMT function in a spreadsheet tells us that you can spend $21,000 per year (rising with inflation).

Instead of expressing the withdrawals in dollars, we could say to withdraw 4.2% of the portfolio in the first year.  If the remaining $479,000 in your portfolio really does earn 3% above inflation in the first year, then the next year’s inflation-adjusted $21,000 withdrawal would be 4.26% of your portfolio.  Working this way, we can build a table of withdrawal percentages each year.

Of course, market returns aren’t predictable.  Inevitably, your return will be something other than 3% above inflation.  You’ll have to decide whether to stick to the inflation-adjusted $21,000 or use the withdrawal percentages.  If you choose the percentages, then you have to be prepared for the possibility of having to cut spending.  If markets crash during your first year of retirement, and your portfolio drops 25%, your second year of spending will be only $15,300 (plus inflation), a painful cut.

A big advantage of using the percentages is that you can’t fully deplete your portfolio early.  If instead you just blindly spend $21,000 rising with inflation each year, disappointing market returns could cause you to run out of money early.

Choosing Withdrawal Percentages

One candidate for a set of retirement withdrawal percentages is the RRIF mandatory withdrawals.  These RRIF withdrawal percentages were designed to give payments that rise with inflation as long as your portfolio returns are 3% over inflation.

Unfortunately, the RRIF percentages would have a 65-year old spending only $20,000 out of a $500,000 portfolio.  Some retirees chafe at being forced to make RRIF withdrawals, but when it comes to the most we can safely spend in a year, most retirees want higher percentages.

A group of Bogleheads calculated portfolio withdrawal percentages for portfolios with different mixes of stocks and bonds.  Most people will just use the percentages they calculated, but they do provide a spreadsheet (with 16 tabs!) that shows how they came up with the percentages.

It turns out that they just assume a particular portfolio return and choose percentages that give annual retirement spending that rises exactly with inflation.  You may wonder why this takes such a large spreadsheet.  Most of the spreadsheet is for simulating their retirement plan using historical market returns.

The main assumptions behind the VPW tables are that you’ll live to 100, stocks will beat inflation by 5%, and bonds will beat inflation by 1.9%.  These figures are average global returns from 1900 to 2018 taken from the 2019 Credit Suisse Global Investment Returns Yearbook.

So, as long as future stock and bond returns match historical averages, you’d be fine following the VPW percentages.  Of course, about half the time, returns were below these averages.  So, if you could jump randomly into the past to start your retirement, the odds that you’d face spending cuts over time is high.

For anyone with the misfortune to jump back to 1966, portfolio spending would have dropped by half over the first 14 years of retirement.  More likely, this retiree wouldn’t have cut spending this much and would have seriously depleted the portfolio while markets were down.

The VPW percentages have no safety margin except for your presumed ability to spend far less if it becomes necessary.

Looking to the Future

But we don’t get to leap into the past to start our retirements.  We have to plan based on unknown future market returns.  How likely are returns in the next few decades to look like the average returns from the past? Continue Reading…

Banking from home and Canada’s seniors: RBC sees surge in digital & online banking by older clients

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By Rick Lowes,

Vice-President, Retirement Strategy, RBC

(Sponsor content)

As the pandemic took hold in early 2020, many Canadian seniors quickly learned how to bank safely and securely from home. Now that winter is setting in, many seniors who’ve continued to use their branch through the pandemic are likely exploring these options. We’re looking forward to helping more seniors across Canada discover the simplicity of not having to go outside their home to do their banking, while resting assured their bills will be paid correctly and on time.

We’ve already heard from many of our senior clients about how pleased they are to have made the transition to online or mobile banking. An elderly client in Prince George, British Columbia who thought he could only transfer funds out of his eSavings account in person is now very happily doing online banking from home.

A senior in Burlington, Ontario – who wanted to know how he was supposed to pay his bills while the branch across the street was temporarily closed – is now paying all his bills online. And an older client in St. John’s, Newfoundland – who had fears about using a computer – couldn’t believe how easy and secure it was to do online banking, when one of our advisors walked her through the process over the phone. From coast to coast to coast, seniors like these have been engaging with our online platforms, spurred on by the realities of ongoing physical distancing.

To share some statistics of our own around what this new activity looks like, over this past year we’ve seen seniors aged 60+ increase their use of electronic money transfers by 101% and digital payments by 46%. Among seniors aged 70+ who are newer to online banking, mobile banking has quickly become their favoured channel for banking from home.

Seniors have been receiving one-on-one support from our advisors that is helping to make them more comfortable with online banking. As a result, we’ve seen that comfort level translate into empowerment and the ability to make decisions about their finances while banking from the comfort of their homes.

 Responding to Canada’s new Seniors Code

We’ve also responded quickly to ensure we had comprehensive support in place for seniors and for our employees who work with seniors, aligned with the new Code of Conduct for the Delivery of Banking Services to Seniors (“Seniors Code”). This Seniors Code guides banks in their delivery of banking products and services to Canada’s seniors. Continue Reading…