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Thirty years ago, single again with two children, Barbara threw herself into her work. Today the 69-year-old home-care worker can’t seem to stop. She’s been holding down two jobs, bringing in more than $100,000 some years, including mileage reimbursement.
“She goes out at all hours, especially in the evenings, often just for a short shift, to help patients go to bed,” her son, now in his 40s, writes in an e-mail. Barbara has savings and investments and a mortgage-free house in small-town Ontario, yet she feels she has to keep working.
“I believe part of the reason is habit – she says yes to any request at any time anywhere,” her son says. She’s afraid she can’t live on her retirement savings. “I also believe she gets a sense of purpose from working and enjoys it,” he adds.
Barbara’s family want to show her that she can afford to work less and even retire completely. Her son helped her fill in the Financial Facelift application forms.
Barbara’s retirement goals are to live comfortably, maintain her house and replace her vehicle when necessary. She’s also concerned about paying for her health care needs when she gets older.
In her application, she asks whether she should buy an annuity for income, or if an income-focused investment portfolio would be better. Her retirement spending target is $50,000 a year, more than she is spending now.
In this Financial Facelift, Warren MacKenzie, a CPA and fee-only certified financial planner in Toronto, looks at Barbara’s situation.
Want a free financial facelift? E-mail finfacelift@gmail.com.
How hard is it to save enough to retire at age 60?
In the latest Charting Retirement article, Fred Vettese, former chief actuary at Morneau Shepell and author of Retirement Income for Life, examines the challenges of saving enough to retire early here.
Which parts of your retirement are you already paying for?
At the tender age of 14, rock hopeful Paul McCartney wrote the lyrics to what later became the Beatles hit When I’m 64, writes contributor Paul Brent, in the fourth instalment of the Retire Rich Roadmap newsletter. (Week one, week two and week three can be found here.) The famous chorus asks what will happen when a young lover reaches the titular age: “Will you still need me, will you still feed me?” For Canadians past 64, the answers to those questions, Brent notes, are yes and yes, sort of.
Older Canadians are needed – and their votes are definitely needed by political parties. Seniors tend to turn out at the polls in greater numbers than any demographic, meaning politicians cater to them. As to “feeding” seniors, says Brent, there is financial support when you turn 65 (or 64 or 60), although most of us will go through our working lives with only a vague idea of how much Ottawa is going to help us when we retire. Some of us will also benefit from pension plans offered through our employers, but keeping track of how much we’ll receive from those programs can be similarly challenging.
So just what financial programs are available for senior-aged Canadian retirees? Find out here.
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In case you missed it
Five winter escapes for snowbirds seeking sunshine and adventure
Winter escapees are seeking more meaningful stays in new destinations that won’t break the bank, writes Vivian Vassos in this story on snowbird destinations.
Those fortunate enough to be able to take off during the colder months prefer the term “Winter Vacationer” over “Snowbird,” she says. But whatever you call them, they are escape artists, she adds, seeking a break from the relentless grey skies and snow in most parts of Canada.
There’s a movement among snowbirds to seek out destinations that include culturally immersive experiences. The new generation of Canadian snowbirds, notes Stephen Fine, president and managing editor at Snowbird Advisor, are more adventurous, especially as non-U.S. destinations become more accessible and, perhaps more importantly, more affordable.
“My snowbird clients are mostly heading to Portugal and Spain,” says Georgia Rakopoulos, a travel adviser with Uniglobe Enterprise Travel, “although I anticipate more demand for Greece in the future.”
Generally, Rakopoulos’s clients are seniors looking for stays of more than three weeks. Most, she adds, want opportunities to discover the region and experience the culture and food: “They’re seeking enriching and meaningful experiences.”
Georgia Kourakos, director at MRG Travel, says Italy, Portugal, Greece and Spain top her clients’ lists. “They have the desire to explore these destinations further, hit the beaches, meet the locals and experience a deeper connection to the local culture,” she says.
So, where to next? If you’re already planning the coming winter’s escape, consider these destinations.
Read the full article here.
I am getting older and spending more time by myself, but I don’t feel alone
“As we age, we become more conscious of the need for friends. However, to me friendships come in many varieties,” writes Graham Rawlings of Vancouver, in this First Person essay. “Some of them are people – friends who’ve been in my life for decades, the friends I’ve made since moving into my condo, and the caregivers who’ve come into my life over the past year – but also others in non-human form. The photographs and objects around my apartment that evoke memories of past events and travels, the music I listen to, the books on my shelves, and even the birds that entertain me from outside my window.”
All of these “friends,” says Rawlings, contribute in their own special way to his emotional well-being, especially as his outside mobility has become more limited.
Many of the people Rawlings knew over the years have moved away, and some have died (including his wife), leaving a void in his life to be filled, he says. “In many ways, I am lucky: Although I am 84 years old and have many medical issues that quietly creep up with aging, I am not locked down or shut in. I now have two wonderful caregivers who visit me almost every day to help me – and who have come to understand and appreciate my foibles and quirky sense of humour.”
Rawlings lives in a building “full of interesting people (many retired, like myself) whom I meet with at in-person or virtual book-club meetings, coffee mornings and wine tastings, or over the occasional dinner.” He stays in close contact with friends and family, but, he says, he has come to realize that, over and above these human interactions, there are other “friends” that are even closer to home.
Read the full article here.
First Person is a daily personal piece submitted by readers. Have a story to tell? See our guidelines at tgam.ca/essayguide.
Retirement Q&A
Q: I’m 55, single, and I think I’ve been making some good decisions financially over my career. I’m hoping to retire at an age where I can enjoy my retirement while I’m healthy (60-65). Is there a simple way for me to know that I’ve been smart with my finances?
We asked Mick Lord, a certified financial planner with Investors Group Financial Services in Ottawa, to answer this one.
There are many ways to approach your question and many angles to consider, some even (so it would seem) non-financial in nature. What is your income? How is your health? Are there genetic factors for you to think about as you age? Is there or could there be anyone financially dependent on you later on? There are, however, some basic rules of thumb that can guide us in your quest for answers.
Financial well-being is not a finish line that you cross. There is no single day when you are suddenly financially well. If you go to the gym today and you look in the mirror, you will not see a change. If you go back to the gym the next day and look at yourself in the mirror, again, you will see nothing. Clearly there are no observable results, right? Many quit at this point. Another approach is to fundamentally understand and believe that going to the gym is the right thing to do and you stick with it, just like your savings plan, your insurance plan and regular financial reviews with a financial professional. At some point, you will achieve financial well-being. Financial well-being is mostly about consistency, and there is no shortcut other than a lottery.
In the same way cholesterol and blood pressure are significant numbers to track for your health, there are numbers to track for your financial well-being:
- Net worth (all assets minus all debts, the bigger the better, should be increasing year over year);
- RRSP contribution limit (the smaller the better, should aim be as low as 18 per cent of your annual income);
- TFSA contribution limit (the smaller the better, should be decreasing year over year).
Given that you’re single, it sounds like you are self-sufficient and want to remain so. There are some types of insurance that you should also consider given that you’re single (and I assume wish to remain self-sufficient). But that deserves more time and discussion.
Have a question about money or lifestyle topics for seniors? E-mail us at sixtyfive@globeandmail.com and we will find experts and answer your questions in future newsletters. Interested in more stories about retirement? Sixty Five aims to inspire Canadians to live their best lives, confidently and securely. Sign up for our weekly Retirement Newsletter.