By Rob Carrick
Thanks in large part to smart marketing by the investment industry, retirement is considered by many to be a time when you catch up on all the cool and wacky stuff you couldn't get to earlier in life. Fly to Bora Bora. Try sky diving. Rent the villa in Tuscany.
But how happy are bucket list retirees? Not very, a therapist says. His take is that retirees are happiest when building their relationships with family and friends, not their brag-worthy list of cool vacations.
Retiring to a sun spot isn't an automatic win, either. Better to make a part-time move – be a snowbird. Here's a nice little review of the things you must think about before retiring. If you're looking for an inspirational retiree, consider David Letterman. The 69-year-old former talk show legend is shown here out for a jog – he looks happy, but not like you remember him.
Now for a look at how actual retirees have done in managing their money. It's all about balancing wants and needs, just like when they were working and raising a family.
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Rob's top web links
How to freshen up your home for sale
> Five real estate agents offer their thoughts on how to update your house and get a better price when you sell.
Who gets the best mortgage rates?
> People who make a down payment of less than 20 per cent and thus have to pay to have their mortgages insured against default. That's correct – you get lower rates if you don't save a big down payment.
How to make better money decisions
> A point well worth reinforcing: The best money solution for you may not be the one that looks best on paper.
Should I replace my old car?
> A blogger debates whether to get rid of his 2000 Mazda Protégé. I say go for it. Sold a 2002 Honda myself last summer and only realized how old and outdated it was when I started test driving new vehicles.
Rich people live longer
> About 10 years more in the United States. Yet another angle on the issue of income inequality.
25 per cent of homes now cable-free
> The flow of people cancelling their cable TV service has almost doubled in the past year. Interesting to see people doing more than just complaining about bad service.
Today's featured investment tool
Compare the amount of income tax you pay with people of similar incomes in other provinces using this interactive tool. You can also see how much money you'll save under the income tax changes introduced by the Liberal government.
The question: "I manage my mom's investments, which are predominantly GICs. However, we did purchase some preferred shares (BCE, Fortis, Enbridge), which continue to deliver dividends but have lost capital value. I'm having difficulty working this through and wonder if pulling the plug on the preferred shares is best at this time. My mother is 92 years old but continues in good health."
My reply: If you sell, you lock in those capital losses and eliminate a flow of dividend income with tax advantages in non-registered accounts. I consider the dividends from pref shares like your mom holds as safe – these are blue chip companies. As for the shares rebounding, it depends a lot on what type they are and what happens with interest rates. Very difficult to predict, although the S&P/TSX preferred share index was up 6 per cent for the 30 days to April 13.
Do you have a question for me? Send it my way. Questions and answers are edited for length.
A conversation with Les Kotzer, a wills lawyers with all kinds of stories about families squabbling over money after the parents die.
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