Nagula Rajah in her backyard in Toronto on Aug. 17.Duane Cole/The Globe and Mail
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“I retired in 2013 at the age of 70 after working as a manager at a housing co-op,” says Nagula Rajah, 80, of Toronto, in the latest Tales from the Golden Age. “I had worked since coming to Canada from Africa in 1980 while raising three daughters as a single parent. My husband passed away in a car accident in Zambia in 1979.” After that, she decided to move with her daughters to Canada and be closer to family here.
“I started thinking about retirement when I was 65. However, I wanted to ensure all three of my children were settled and that I was financially secure before entering my next life phase.”
Eventually, Rajah says she got to the point at which she felt it was time to relax and spend more time with her family, especially her five grandchildren, while they were still young.
Retirement, she says, was an adjustment at first. Rajah was used to the daily routine of going to work and missed the camaraderie she had with the people there. But then, as she got more involved in her grandchildren’s lives, she found it very fulfilling, she adds.
“Retirement is also a good change of pace. I have my own time to relax and do whatever I want. Sometimes, I like to sit in the garden in our backyard and watch the butterflies. I also enjoy reading, cooking, and watching Tamil movies on my computer. I also like to travel.” One of Rajah’s daughters is in Montreal, and one is in the Cayman Islands, so she visits each when possible.
“I don’t worry about money in retirement. I have always lived simply and never beyond my means, especially having raised three children as a single parent. Now that they’re adults with their own children, I only need to take care of my own financial needs. I spend most of my money on travel and buying things for my grandchildren. Also, I live with my second-eldest daughter in Toronto, so my expenses are low.”
Read the full article here.
Are you a Canadian retiree interested in discussing what life is like now that you’ve stopped working? The Globe is looking for people to participate in its Tales from the Golden Age feature, which examines the personal and financial realities of retirement. If you’re interested in being interviewed for this feature and agree to use your full name and have a photo taken, please e-mail us at: goldenageglobe@gmail.com Please include a few details about how you saved and invested for retirement and what your life is like now.
What age should Kate, 56, start taking her CPP and OAS benefits?
Joe is the age of 68 and his wife Kate is 56. Both have retired from the work force, Joe from the private sector at the age of 64, and Kate from the government at the age of 50.
They have a home in small-town British Columbia and a recreational property. Their only child, who is 23, lives on her own and is working full-time.
Kate has a defined benefit pension that is 70 per cent indexed to inflation and pays her $22,500 a year.
“We are in the de-cumulation stage of our finances and wondering if our strategy will last my wife’s life expectancy,” Joe writes in an e-mail. “We are also wondering whether she should commence her Canada Pension Plan at age 60 or wait until age 65 or later.”
Because Joe is likely to predecease Kate, “the longevity of our financial plan must last until Kate turns age 90 at a minimum, and ideally to her age 95,” Joe writes. “If all the RRSP/RRIF funds run out at that time, she will still have maximum allowable survivor’s CPP, Old Age Security and her pension, as well as the value of our home plus the tax-free savings accounts,” he writes.
“Our objective is to feel confident this long-term plan is viable and that we are not overdrawing on Joe’s registered retirement income fund.”
In this Financial Facelift, Matthew Ardrey, a portfolio manager and financial planner at TriDelta Financial in Toronto, looks at Joe and Kate’s situation.
Want a free financial facelift? E-mail finfacelift@gmail.com.
Is this the most unaffordable time ever to buy a house?
In the latest Charting Retirement article, Fred Vettese, former chief actuary at Morneau Shepell and author of Retirement Income for Life, takes a look at the cost of home ownership in retirement here.
In case you missed it
New retirement tools for calculating OAS and CPP
Estimate the Canadian Old Age Security (OAS) benefits and retirement pension from the Canada Pension Plan (CPP) you can expect to receive based on the age you choose to start collecting with The Globe’s retirement tools and calculators.
Find the tools and calculators for retirement planning and retirement management here.
How to say no when someone asks you to be their executor
A wills and estates lawyer personal finance columnist Rob Carrick interviewed several years back had a surprisingly direct response when he asked her how someone should respond when asked to be an executor for a family member’s or friend’s estate.
“Say, ‘No thanks,’” the lawyer said. And she wasn’t joking, notes Carrick. Being an executor is hard work, often with no compensation. It could take months or years to settle someone’s estate. Plus, you have to deal with family members about a deceased person’s assets. Just ask an estates lawyer some time about how those conversations can go.
Adviser’s Edge, a publication for financial professionals, recently published an article under the headline “Do executors have to accept the role?” A lawyer quoted in the article says that serving as an executor is “neither an honour nor an obligation,” which raises a question: How do you politely but firmly decline someone’s invitation to be their executor?
Read the full article here.
Retirement Q&A
Q: If a person is likely to be just above OAS total clawback level, can one decline OAS? Is the OAS tax neutral if it is clawed back but how is it entered in our tax forms? Does it move us to higher taxation levels that are not recovered?
We asked Howard Wirch, managing partner at Accent Chartered Professional Accountants Inc. in Dauphin, MB, to answer this one.
The Old Age Security payments can be deferred until age 70. Each month you defer increases the benefit by 0.6 per cent. If the OAS tax is clawed back (officially known as the OAS recovery tax) , essentially the taxpayer’s tax return is neutral. It is entered in the tax forms as income, but also as a deduction. The tax withholding would offset the recovery tax to make the cash flow neutral.
There is an offsetting tax deduction for the social benefits repayment on the tax return against the Old Age Security income, and therefore, it does not move a taxpayer into a higher income tax bracket.
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.