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.

6 ways to ensure you won’t outlive your money

Posted By Adrian Mastracci | June 23, 2017

“Retirement: World’s longest coffee break.” —Author Unknown

Over the years you’ve taken plenty of advice, saved and invested diligently. Now you and your family are knocking on retirement’s door or, perhaps, in its midst.

The good news is the family members will likely live longer than before. The flip side is that more money may be required to fully fund retirement lifestyle.

Let’s assume that retirement spans from age 60 to 90, often longer. Many worry that the money won’t last and runs out during retirement.

Analyze life expectancy of the immediate family members for both spouses or partners. Specifically, review the current ages of grandparents, parents, uncles, aunts and cousins.

Some are petrified at the mere thought of such a prospect becoming reality. The question becomes what you can do to at least contain this situation.

I summarize six essential ideas designed to ballpark your lifestyle needs and help your retirement money last:

1. Family life expectancy

Analyze life expectancy of the immediate family members for both spouses or partners. Specifically, review the current ages of grandparents, parents, uncles, aunts and cousins. Get familiar with the ages attained by family members that have passed away. Pay attention to patterns of critical illness and longevity.

Today, it is commonplace for many to live well into their 80s. It is wise planning for a family to expect that at least one spouse could easily live past age 90. Another expectation is that family longevity continues to increase. Updating the retirement projection refreshes the family’s capital needs for the desired lifestyle.

2. Becoming too conservative
Continue Reading…

TFSA Estate Planning options

Posted By Marie Engen | June 21, 2017

The TFSA (Tax Free Savings Account) has become a popular saving and investment vehicle for many Canadians. It has also potentially become a significant portion of retirement savings.

When TFSAs were first introduced I thought they were pretty straightforward. However, we still get lots of questions, and Gordon Pape wrote an entire book about them (The Ultimate TFSA Guide), so there’s still some confusion.

A lot has been written about how to invest within a TFSA, but what happens to these funds when the planholder dies? The amount in the account at the date of death is tax free: then it depends on who the funds are given to.

Estate Planning For Your TFSA

There are three different estate planning options for your TFSA:

Appoint a successor holder
Designate a beneficiary
Assign the funds to the estate

Successor holder

Only a spouse or common-law partner can be appointed successor holder.

Estate Planning: Half of us STILL lack Wills

Posted By Financial Independence Hub | June 20, 2017

By Rowena Chan, TD Wealth

Special to the Financial Independence Hub

Creating a will can be an emotional experience, but it’s an important step in ensuring peace of mind for you and for your loved ones. According to our recent survey, it was surprising to learn that half of Canadians do not have a will, a crucial step in allocating assets after death.

Moreover, more than a quarter (28%) of Canadians without a will are between the ages of 53 and 71. Even more concerning is the stat that 39% of boomers have not even discussed estate planning wishes with their children.

The risks of not having a will are two-fold: first, the government can intervene and distribute your assets which could mean that your wishes are not fulfilled; and second, not having a will can create unnecessary conflict and animosity among members of the family during an already difficult time.

The survey found that one in five Canadians (19%) who received a family inheritance say they experienced conflict with their siblings and other relatives over the division of those assets, with two in five (41%) saying they considered taking a smaller share of the inheritance to maintain family harmony.

Although some may believe estate planning is only necessary for those with significant financial assets, the truth is that it is essential for everyone, regardless of the total value of assets. To help manage your estate and avoid potential tax implications and family conflicts, we offer the following tips:

Personal property

Items like the family home, summer cottage or jewelry are all considered property assets, regardless of what they’re worth. A professional appraisal is an important starting point for valuing these assets. Once you understand the dollar value, you can get a sense of how to distribute them among your loved ones.

Turning 65 soon? Service Canada wants to give you OAS benefits!

Posted By Jonathan Chevreau | June 10, 2017

Turning 65 in the next year? These things do eventually happen, God Willing!

The bad news is you are now considered by the Government to have reached Old Age; the good news is that also means Ottawa wants you to consider starting receiving Old Age Security (OAS) benefits the month after you officially turn 65.

My latest MoneySense column provides all the details, starting with a letter Service Canada should be sending you automatically shortly after you reach 64. Click on the highlighted text for the full column about how to get ready to receive Old Age Security benefits and possibly the Guaranteed Income Supplement (GIS) to OAS: What to expect when receiving OAS at 65.

As you’ll see, no action at all is required if they did send you this initial package and you’re happy to receive gross (pre-tax) cheques mailed to the address they have on file. If you want the funds deposited electronically to your bank and/or have tax deducted at source (as I did), then you either have to go to the web site provided or call them on the phone.

I have to say my initial attempt to do this on the Internet was a frustrating one. It turned out to be far easier to call them on the telephone on the English-language helpline listed in the letter: 1-800-777-9914. Due to “high call volume” I was put on hold for 15 minutes, during which time the automated voice advised listeners to apply for OAS at least six months before their 65^th birthday and no more than a year in advance. It also said the maximum monthly OAS benefit is currently $578.53.

I chose to have 25% tax withdrawn at source so with no further action on my part, I can expect my first OAS deposit of $433.90 (net of tax) to arrive magically in my bank on or about May 29, 2018, and every month after that for as long as I live, like any other pension. By then it may be slightly more, as it may be indexed to the cost of living.

Take OAS early, CPP late if you can possibly swing it

Keep in mind that, like the Canada Pension Plan (CPP), you can opt to defer receipt of OAS benefits to as late as age 70, thereby raising the payout. I revealed my reasons for taking OAS as soon as it’s on offer in an earlier MoneySense column last summer: Why I’m taking OAS right at 65. Continue Reading…

Time to stop following the Retirement herd

Posted By Michael Drak | June 7, 2017

We are all social animals: we crave interaction and generally don’t like being alone. We crave that feeling of togetherness and being part of something bigger, the added comfort and safety that comes with being part of a group or a herd.

The herd protects individuals from being singled out, and in the animal kingdom provides safety from being killed by a predator.

Many people have developed a “herd” mentality in life deriving comfort by going with the flow and if everyone else is going in one direction they must know something that we don’t. It is easier not to complicate things by forging our own path based on what we learn or believe. What happens if we are wrong and the herd is right?

When it comes to retirement the “herd” has been doing this retirement thing for a long time. So they must be right, right?

I used to be a follower, part of the herd if you will. I was willing to put my fate in the hands of others and follow along blindly. Then I realized the retirement herd was heading in the wrong direction, and this wasn’t going to work for me. Let me explain.

Retirement worked when life expectancy was much lower

When the concept of retirement was created just over a hundred years ago, it worked. The reason it worked was because life expectancy was much lower and if you were one of the lucky ones to reach the retirement finish line, you could expect to enjoy a couple of years in the proverbial “rocking chair,” watching the world go by.

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