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.

What financial help is available to American seniors?

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Photo by Alexandre Debiève on Unsplash

By Jessica Walter

Special to the Financial Independence Hub

As we approach retirement, we hope financial strains will be a thing of the past and that we’ll be able to enjoy our senior years by focusing on the things that make us happiest. However, the reality for many of us in North America is quite different.

According to SeniorLiving, nine out of ten Americans who are 65 and older, receive Social Security and the average senior citizen, aged 65-74, has an income of just $36,320 [all figures $US]; a figure that drops to $25,417 for those aged 74 and over. As confirmed by the most recent U.S. Census Bureau, 9.3% of Americans aged 65 and older are living in poverty; an increase from 4.2 million to 4.6 million between 2015 and 2016.

With such worrying circumstances to contend with, many senior citizens will want to find out what kind of financial assistance is available to them in order to better plan for the years ahead.

Housing

Meeting mortgage payments or having enough money to cover rising rental costs can be one of the most pressing financial concerns for senior Americans. The U.S. Department for Housing and Urban Development (HUD) offers financial assistance and resources related to reverse mortgages, federal housing programs, affordable rents and units for the elderly.

Healthcare

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How Millennials can learn from the seniors in Grace & Frankie

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Lily Tomlin, Sam Waterston, Jane Fonda at the Grace & Frankie Season 2 Premiere Screening in Los Angeles.

Can Millennials learn life lessons from seniors? I think so, or at least from TV depictions of them.

As an avid watcher of anything Netflix is showing, I came across Grace and Frankie when the first season came out in 2015.

I wouldn’t usually choose this show for myself, seeing as all the main characters are over 70, I figured I wasn’t exactly in the target market. This was a show geared toward people my parents’ age or more, and what could I possibly gain from watching something made for old people!?

However, it was a slow weekend, and I’d already caught up on Orange Is the New Black, so what did I have to lose? If it was good, I’d find a new show to watch, and if it was too far out of my wheelhouse, I’d email my parents and pass on the ‘new show you’d like’ info to them.

I think a lot of the time people my age tend to take for granted that most media is aimed at us, with characters from all walks of life but generally in the same age range. This has the unfortunate consequence of leading us to believe that:

a) we’re the only generation that matters and

b) we will continue to be young and adventurous and the only generation that matters.

If you haven’t yet marathon-ed Grace & Frankie, allow me to break it down for you. Grace Hanson and Frankie Bernstein’s husbands are law partners, and, as it turns out, life partners. The husbands — played by two veteran actors who are 75 or older, Martin Sheen and Sam Waterston — have decided after 20 years of hiding their love that it’s time they get on with it, which leaves the wives in quite an unfortunate predicament. ‘Grace & Frankie’ revolves around these two women — played by Jane Fonda (79 years young) and Lily Tomlin (77) respectively — rebuilding their lives and learning to live their ‘new normal’.

One of the most important lessons millennials should take away from this show is that no matter how much we plan for our financial futures, nothing is set in stone. It is always important to plan for the un-plan-able. We are not invincible, and we are not immune to hardship.

A Victory Lap for both the 70-ish actors and the characters they play 

Though both the lead characters had successful careers in their pasts, what I find most inspiring about these women is that they aren’t allowing themselves to feel obsolete. They find new relationships, new hobbies, and most interestingly, a new business venture that they’re passionate about pursuing.
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Retired Money: Equities in Retirement — you may need more than you think

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Contrary to what some may feel, equities in retirement is not an oxymoron. If you’re retired or almost so, you may be thinking it’s time to lighten up on your equity exposure.

The problem with rules of thumb is that some of them get quite dated and nowhere is this more relevant than in the maxim that a retiree’s fixed income exposure should equal their age. (So, the guideline goes, 60 year olds would be 40% in stocks and 90 year olds only 10% in them).

My latest MoneySense Retired Money column looks at this in some depth, via reviews of two books that tackle both the looming North American retirement crisis and this topic of how much equity retiree portfolios should hold. You can find the full article by clicking at the highlighted text: How to Boost Your Returns in Retirement.

As the piece notes, the single biggest fear retirees face is the prospect of outliving your money. Unfortunately, retiring in this second decade of the 21st century poses challenges for just about any healthy person who lacks an inflation-indexed employer-sponsored Defined Benefit (DB) pension plan. We’re living longer and interest rates are still mired near historic lows after nine long years.

The two books surveyed are Falling Short, by Charles Ellis, and Chris Cook’s Slash Your Retirement Risk. I might add that regular Hub contributor Adrian Mastracci twigged me to the Ellis book when he compared and contrasted it to my own co-authored book, Victory Lap Retirement. See Adrian’s review here: Two notable books to guide your “Retirement” journey. Continue Reading…

My RRIF playbook: what you need to know in 2017

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“Retirement at sixty-five is ridiculous. When I was sixty-five I still had pimples.” — George Burns (1896–1996) Comedian, actor, singer and writer

There are three retirement accounts everyone ought to understand. They are the RRSP, the TFSA and the RRIF (Registered Retirement Income Fund).  I submit that the early part of each year is preferred to review the RRSP and TFSA. That leaves the RRIF to be dealt with well before year-end.

Start paying special attention to planning the RRIF, even if you don’t yet need one.

Be very mindful of the RRIF. Recognise its purpose and how it complements the other two accounts. Review it periodically to ensure it stays on track.

The RRIF is firmly entrenched as a prominent retirement planning vehicle, serving as an essential foundation of retirement nest eggs. For example, starting a RRIF at 71 implies long planning, often to age 90 or more: especially if there is a younger spouse or common-law partner.

Three conversion choices for RRSPs

RRIFs typically result from the aftermath of mandatory RRSP conversions. Three conversion choices include cashing the RRSP, purchasing a variety of annuities and using the RRIF account. The RRIF is most popular because it provides considerable flexibility. Avoid cashing RRSPs.

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Women have distinct financial planning needs

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Marie Philips

By Marie Philips

Special to the Financial Independence Hub

The financial assets controlled by Canadian women as well the income earned by women is projected to grow significantly over the next decade.

This increase in wealth will result from a greater overall participation in the work force, higher level professions, an increase in female entrepreneurship and being the beneficiaries of a large share of the $1 trillion wealth transfer that is underway in Canada.

By 2026, women in Canada will control close to half of all accumulated financial wealth, roughly $900 billion in financial and real estate assets. That’s a significant increase compared to a decade earlier, when the share was closer to one third.

Yet according to a recent white paper published by IPC Private Wealth in collaboration with Strategic Insight, almost two  thirds of financial advisors (85% of whom are men) do not believe a female client should be viewed in any different light than a male client.

If we look at some of the concerns women have, we can see that there are distinct financial planning needs for women compared to men. Life expectancy at birth now means mortality in 2015 is 84 (80 for men).  Women live longer and are likely to have interrupted careers as a result of family responsibilities (children and caring for elderly parents) which all lead to potential lower available savings for retirement income.

Caregiver women more likely to end up in poverty

Research shows that women caregivers are likely to spend an average of 12 years out of the workforce raising children and caring for an older relative or friend.  Continue Reading…