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.
This will be a VERY short blog; nonetheless if you take the two resolutions seriously, you might well transform both your Wealth and Health. As Sandy Cardy wrote in a Hub blog, last week, Health IS true Wealth.
Resolution 1: Health
If I haven’t done it already, I will embark on a lifelong program to improve my nutrition and exercise daily, along the lines of the last Hub blog of 2017: Younger Next Year.
Resolution 2: Wealth
As of January 1st (if I have an online discount brokerage account, otherwise January 2nd or later this week), I will top up my Tax-free Savings Account (TFSA) by a further $5,500: the “new” TFSA contribution room that all adult Canadians qualify for as of the new year. This resolution applies to everyone from age 18 to seniors: especially to seniors and those in semi-retirement or approaching full retirement. The Hub’s second last blog of the year explains why: Retired Money — How TFSAs can give seniors more tax-free retirement funds.
That’s it: one short blog, two simple resolutions; yet with the potential to transform almost all aspects of your existence. So to all who read or contribute to the Hub, a very happy, healthy and wealthy new year. See you in 2018!
P.S. New Younger This New Year 2018 Facebook Group
I’d like to spread the word that this weekend’s Younger Next Year blog triggered via Twitter the creation of a new Facebook group called Younger Next Year – 2018. I believe I am member #5: thanks to Vicki Peuckert Cook for taking the initiative to create this. As with the Hub, the group consists (at least initially) of both American and Canadians. Hope to see you there!
The authors are a vibrant 70-year old (at the time of writing) and ex New York litigator Chris Crowley and his personal physician (25 years his junior), named Henry Lodge (Harry in most of the text; I should clarify that this is the late Henry Lodge, since he passed await at age 58 early in 2017 of prostate cancer. Ironic.)
The subtitle says it all: Live Strong, Fit and Sexy — Until You’re 80 and Beyond. I’m grateful to one of my sources — Hub contributor Doug Dahmer of Emeritus Retirement Strategies — both for twigging me to the book’s existence and to supplying me a copy. (He appears to have laid in a good stash of the book).
Take control of your Longevity
And for good reason. The book is all about taking control of your personal longevity, chiefly through proper nutrition but first and foremost by engaging in daily exercise: aerobic activity at least four days a week and weight training for another two days a week. Week in and week out, for the rest of your life. And the payoff is what is promised in the subtitle.
Apart from daily exercise and “Quit eating crap” (to use the authors’ phrase, one of Harry’s 7 Rules reproduced below) the authors urge readers to “Connect and Commit,” which means staying engaged even after formal retirement. In fact, as we argue in our own book Victory Lap Retirement, there’s a case to be made for never entirely retiring. Leaving the corporate workplace, probably, but semi-retirement and self-employment from home are certainly viable alternatives.
While Younger Next Year only touches on retirement finances, it certainly reinforces the main theme of this web site (FindependenceHub.com). It’s encapsulated in Harry’s 4th Rule: Spend Less Than You Make.
Harry’s Rules
I can see at this point that it’s best to simply list Harry’s 7 Rules, which formally appear in the book’s appendix (page 305 of my copy): Continue Reading…
What do you envision when it comes to your final wishes? Would there be a formal service? If so, who would officiate? Do you wish to be cremated or buried or donate your remains to science?
I get it, end of life conversations are difficult and even if you are prepared to have the discussion, dollars-to-donuts your kids or responsible family members don’t want to go there.
Regretfully I’ve been involved with funeral planning for a number of relatives, and even some clients, and these are the decisions families find most difficult. When the time comes — and it will — the question inevitably asked is some variation of “What do you think mom would have wanted?”
If those closest to you know your personal wishes they don’t have to make it up in the funeral director’s showroom while debating between the grand showcase coffin and the budget version you might have preferred!
Bless Mom — she was very clear — cremation by the most frugal means possible, and a nice lunch for our friends. My Scottish depression-era mother liked the memorial society option because they negotiate funeral cost discounts.
The Memorial Society Association of Canada’s website identifies contacts across the country. A modest membership fee gets you an information package to help document decisions plus they pre-negotiate cost-conscious plans with funeral homes. You can file your wishes with the funeral home or with a memorial society but keep a copy with your other important documents.
Fire Drill Conversations
Because these are difficult conversations, I suggest you treat them like a fire drill: keep it short, discuss what’s needed, make sure everyone understands, document and call it done. Have another fire drill if your thoughts or wishes change.
“The more bells and whistles, the lower the monthly income,” from annuities, says Caring for Clients’ Rona Birenbaum,
My latest MoneySense Retired Money column looks at the case for laddering annuities in order to avoid the problem of committing funds to annuities at interest rates that are only now coming off their historic lows. You can retrieve the whole article by clicking on the highlighted text: A low-risky annuity strategy to beef up your retirement cash flow.
Many investors are already acquainted with the concept of “laddering” guaranteed investment certificates (GICs), or bonds with different maturities. Maturity dates are staggered over (typically) one to five years, so each year some money comes due and can be reinvested at prevailing interest rates. This minimizes the likelihood of investing the whole amount at what may turn out to be rock-bottom interest rates, only to watch helplessly as rates steadily rise over time.
The same applies when it comes time for retirees or near-retirees to annuitize. At the end
of the year you turn 71 you must decide whether to convert your RRSP into a RRIF,
cash out and pay tax (few do this), or thirdly to annuitize.
Fortunately, annuitization isn’t an all-or-nothing decision. You can convert some of your RRSP to a RRIF and some to a registered annuity. You can take a leaf from the GIC laddering
concept and buy annuities gradually over five, ten or even more years. As regular Hub contributor Patrick McKeough observes in the piece, laddering annuities can reduce the potential downside: “You could buy one annuity a year for the next five years. That way, your returns will increase if interest rates rise, as is likely.”
Tally up how many annuities you may already have
Mind you, few observers believe in converting ALL your disposable funds into annuities. After all, as another Hub contributor — Adrian Mastracci — notes, you need to take inventory of the annuity-like vehicles you already may have, or expect to have: such as employer-sponsored Defined Benefits, CPP or OAS. Some investors may have a high component of annuity-like income without realizing it, and many families may already have five or six such sources of annuity-like income.
Certainly you need to consider both the benefits and drawbacks of annuities. The main benefit is they are a form of longevity insurance: making sure you never outlive your money no matter how long you live. There’s a case for having enough annuities that your basic “survival expenses” (shelter, food, heat, transport etc.) are taken care of no matter what. Finance professor Moshe Milevsky is also quoted in the article to the effect there are compelling financial and psychological reason to at least partly convert to annuities. And Milevsky is famous for making a distinction between “REAL” pensions (like DB pensions) that behave like annuities, as opposed to vehicles like RRSPs and TFSAs, which provide capital that only have the potential to be annuitized. Hence the title of Milevksy’s excellent book, Pensionize Your Nest Egg.
But annuities are not perfect. Apart from the common reluctance to commit to buying annuities at today’s still-low interest rates, there’s also the matter of the irreversible nature of the decision to convert some capital to an annuity. You’re handing over a large chunk of change to an insurance company and should you die earlier than expected, they in effect “win,” to the partial detriment of your estate. If on the other hand you live to 120, then YOU “win.”
My latest MoneySense Retired Money column has just been published, which tackles that perennial personal finance chestnut of whether to take early or delayed CPP benefits. You can find it by clicking on the highlighted headline here: The Best Time to Take CPP: if you don’t know when you’ll die.
That’s a pretty big “if,” of course since with rare exceptions, our futures are unknowable. As readers of the piece will discover, there is a fair bit of personal anecdotes there, which is hard to avoid in a beat known as “Personal Finance.” As the column notes, we’ve written before that in theory it makes sense to delay CPP as long as possible, since monthly benefits are 42% higher than if you took them at 65. And while you can take CPP as early as age 60, you’d pay a 36% penalty to do so compared to taking it at the traditional age 65.
Since experts are all over the place on this one and have valid arguments for either side, it’s interesting that in practice very few Canadians actually wait till age 70 to start their CPP, even if it is an inflation-indexed guaranteed-for-life annuity. Government stats show age 60 is the single most popular option: according to the federal government’s 2016 data, of the 312,251 who began collecting CPP that year, 126,954 did so right at age 60, with the second most popular start date being age 65, when 93,460 started to collect. Only 4,844 waited until 70.
The balanced case for the traditional age 65
As I relate in the MoneySense piece, I still haven’t started to collect CPP myself, even as my 65th birthday looms this coming April. Continue Reading…
Posted By 
This will be a VERY short blog; nonetheless if you take the two resolutions seriously, you might well transform both your Wealth and Health. As Sandy Cardy wrote in a Hub blog, last week, Health IS true Wealth.
Posted By 
