A poll in this newsletter last week about financial stress in the pandemic kind of fizzled. We received 221 responses, compared to 1,584 for a previous survey about pandemic splurges.

The conclusion I draw is that people are very private about their financial problems, which I respect. But their story is being lost in all the coverage of hot stock markets, soaring house prices and the $90-billion in extra savings people have stockpiled this year.

To help us all understand what financial stress looks like, let’s take a look at some of the comments people left anonymously while completing the poll. The poll asked about the most painful spending cutback people have had to make. Here are some replies:

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If you’re thinking about year-end donations, how about local charities like food banks? To find a charity that is helping in the pandemic, try CanadaHelps.org.

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Rob’s personal finance reading list

Rescuing your grown children

Supporting 20- and 30-something kids is the No. 1 point in this list of 15 key baby-boomer retirement challenges. Note: This is a U.S. list, but quite relevant to Canadians for the most part. If you doubt the financial pressure from supporting adult kids, check out my recent column on pandemic parenting costs.

Canadians are fine with a wealth tax

I can tell you, based on reader e-mails, that there’s a growing level of concern about higher taxes to pay the bills for fighting the pandemic. A newsletter last week offered two commentaries on why tax increases may not be needed. But if they are, a recent poll shows a lot of people on all sides of the political spectrum are good with a wealth tax. An NDP proposal calls for a 1-per-cent tax on people with assets above $20-million.

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Please tell me your password isn’t 123456

A review of more than 275 million passwords found the most popular one was … yup, 123456. People stubbornly continue to use basic passwords that are easy for hackers to crack.

Searching for an edge when renting a home

You’re probably heard stories about who hoped to get an edge in a bidding war to buy a house by writing an endearing letter to the sellers. According to a real estate agent, writing this type of letter is more effective when you’re a renter trying to impress a landlord.

Today’s Guest Q&A

Today’s guest is John Stapleton, my go-to expert on retirement planning for lower-income people. Here’s an edited version a Q&A we did by e-mail.

Q: What’s your background, and how did you become an expert on retirement planning for people on a low income?

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A: I was a benefit designer in the area of social assistance and other low-income programs for the Ontario government for almost 30 years. I took a package in 2003 and started working independently on the same programs outside of government. I devised a program for low-income people, elements of which got rolled into the tax-free savings account. I was struck by how little advisers understand how good TFSAs are for low-income savers in comparison to registered retirement savings plans and began a presentation series for the Toronto Public Library and other libraries called Low Income Retirement. I have now presented this program about 100 times over the last eight years.

Q: How good a job does the traditional investment industry do in helping people on low incomes with retirement planning?

A: The good news is that there are many younger advisers who have started to do a really good job. But in general, the industry treats low-income people planning for retirement as if they were the same as middle-class or well-off retirees who just don’t happen to have any money. This is a mistaken assumption on the part of the industry.

Q: What are the mistakes advisers, bankers and others make?

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A: They do not pay attention to the fact that low-income retirees are in most cases “GIS-bound.” The Guaranteed Income Supplement is a tax-free supplement that pays a maximum of $917 a month, usually more than either Old Age Security or the Canada Pension Plan. People get GIS when they turn 65, but RRSP and RRIF cashouts reduce the GIS by at least 50 per cent on the dollar, while TFSA cashouts have no effect on the GIS. Advisers should be telling the GIS-bound to cash out of their RRSPs (slowly) before 65 and saving where they are able in TFSAs. They should also be advising them to take early CPP at 60 as higher CPP at 65 or 70 will result in higher GIS clawbacks.

Q: We see endless marketing showing retirees on beaches and travelling in exotic locales. What’s your sense of how many seniors are living in poverty?

A: More than there needs to be. Various estimates put seniors poverty between 3 and 10 per cent based on assumptions related to home ownership and money owed on mortgages. But the better way to look at it is that 31 per cent of all seniors receive the GIS.

Ask Rob

Q: My son would like to open a TSFA as a high-interest account. He banks with one of the big banks, but their interest rates are ridiculous. If he goes to a credit union/alternative bank that posts a higher rate now, how does it work if they slash their rates and he wants to transfer his money to a different bank? Is it at all possible with a TSFA to change banks and transfer your money?

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A: Moving money between taxable high-interest savings accounts is super easy to do in this age of electronic banking, but TFSA accounts are tricky. I suggest your son find an alternative bank or credit union with a strong record of competitive rates and plan to stick around. Let’s be clear about slashing rates – in this low-rate era, all banks and credit unions have done it. As for the mechanics of transferring TFSAs, here’s a good rundown.

Do you have a question for me? Send it my way. Sorry I can’t answer every one personally. Questions and answers are edited for length and clarity.

The money-free zone

A great Canadian protest song about colonial oppression of Indigenous people: I Pity the Country, by Willie Dunn.

ICYMI

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