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No longer needing to live near work, some retirees face a big decision: move closer to kids and grandkids or strike off in an entirely different direction.

John Hamblin, 75, sees the move he and his wife Peggy made last fall from Halifax to live near their daughter and granddaughters in Saint John, N.B. as “a benefit and a pleasure.”

If his daughter and her partner are too busy to pick up their 12 and 14-year-old kids after school, the Hamblins can do the job. They play cribbage and card games.

The kids are great, stresses Mr. Hamblin, who clearly doesn’t consider time spent with family as a chore. Even when the Hamblins are at their vacation home in Arizona, there are regular video calls with their daughter and granddaughters.

The Hamblins had lived in Halifax for 20 years. Their new home in the Saint John suburb of Rothsay is four hours away from Halifax by car, so if they want to visit old friends, they still can, Mr. Hamblin says.

The couple downsized from a large house to what his granddaughter calls a “hobbit house,” he says.

Statistics Canada shows close to 18,500 Canadians 65 and older moved between provinces in 2020-21. Add in those who move within their home province and that’s a lot of older adults on the move.

Some aren’t moving closer to their kids, as Kathy Kerr reports

With bonds sinking, conservative investors are waking up to risks they never saw coming

Conservative investing used to mean you were protected to some extent from the kind of financial market volatility we’ve seen so far this year, writes the Globe’s personal finance columnist Rob Carrick.

“Now, investors who shun risk are getting the worst of it,” he writes. “Depending on what funds or individual securities they hold, it’s possible they could be down more on a year-to-date basis than more aggressive investors.”

In this column, Mr. Carrick looks at why conservative investors need to figure where they stand on risk.

Retirement means ballroom dancing, travel to keep this former consultant active

In the latest Tales from the Golden Age feature, retiree Randy Dutka, 75 of Oakville, Ont. gives some advice on leaving the work force to retire and how to maintain relationship with work friends.

He has some other advice for soon-to-be-retirees: “When planning for retirement, the first thing you should think about is health, and the second thing is money – and how to maintain each one.”

Travel and ballroom dancing keep him and his wife of 50 years healthy and active.

How can this fiftysomething Alberta couple protect their desired retirement income?

A health scare last year got Andrew thinking about stepping aside from his high-pressure executive job and taking early retirement. He’s 59. He’d be leaving behind a salary of $200,000 a year. His wife, Abigail, 58, is a self-employed consultant with business income ranging from $50,000 to $100,000 a year. They have a mortgage-free house in Alberta and no debt.

Abigail and Andrew have three children, ages 16 to 20, with the youngest still at home and another partly dependent. “This health episode has made me really look at how much longer I want or need to work,” Andrew writes in an e-mail. “Maybe it’s time to slow down.” They have money set aside in a registered education savings plan and in trust accounts for their children’s higher education.

“We are not big travellers, so in retirement we may do one trip in Canada each year to visit relatives,” Andrew writes. “How soon could I retire with an after-tax income of $120,000 a year?” he asks. “When would we have to sell our house to augment our depleted savings?”

In the latest Financial Facelift column, Clay Gillespie, a financial planner and managing director of RGF Integrated Wealth Management Ltd. in Vancouver, reviews their situation.

In case you missed it

How to ease into retirement

In 2019, Tim Brennan began thinking about what his postretirement life would look like.

The 60-year-old Halifax entrepreneur had spent 21 years with the company he co-founded, Fit First Technologies, which produces software tools for human resources and recruiting. That December, he sat down with his partners and began talking about how he might wind down his involvement.

Then came the pandemic lockdowns weeks later, which put his plans into perspective: “I started walking in a city park every Wednesday afternoon during the first lockdown with a group of four or five guys I knew from a lawn-bowling club,” he recalls. “And I’d ask, ‘What do you do as a retired person?’

The biggest take-away from those walks, he says, was to “find out what’s important to you, and focus on that in retirement.”

For Mr. Brennan – whose identity, sense of purpose and social life was still substantially tied to work – that meant not retiring: At least not all the way.

He’s among many retirement-age Canadians making similar choices, says James Norris, a London, Ont.-based sales manager with human-resources firm Express Employment Professionals (EEP). Matthew Halliday reports

Why your will should include plans for your pets

Meika and Floyd are inseparable: So it makes perfect sense that ‘Pink Floyd,’ a flame-point Himalayan cat with peachy-pink ears, nose and paws, and sandy-coloured, long-haired Meika with pale blue eyes, remain together should anything happen to their human caretakers. “The four-footed are part of our family, and we want to make sure they stay together once we’re gone,” says co-parent Terry Cooke, a retired University of Manitoba administrative worker.

To ensure that happens, the two cats are in her and her partner Wes Pastuzenko’s will, with a special provision dictating their beloved felines go to a no-kill shelter. “They have agreed to take them as a pair until they are adopted together or stay there together until the end of their lives,” says Ms. Cooke, adding the will also sets aside money to pay for their cats’ care at the shelter.

At one time, Ms. Cooke and her partner’s pet-focused estate plan would have seemed a little eccentric. But such provisions are now commonplace, particularly among retirees who increasingly consider their furry friends ‘companions’ instead of ‘pets,’ says Toronto lawyer Barry Seltzer. Joel Schlesinger reports

Ask Sixty Five

We recently received a number of reader questions about Canada Pension Plan (CPP) and Old Age Security (OAS) benefits. In this week’s newsletter, we ask Jamie Golombek, managing director, tax and estate planning, at CIBC Private Wealth, to answer some of these questions and provide some general information on these retirement-age benefits. (Thanks Jamie!)

Let’s start with some basics: What are CPP and OAS and who is eligible and not eligible?

The Canada Pension Plan (CPP) – or Quebec Pension Plan (QPP) – pension is a taxable benefit of up to $1,253.59 monthly (about $15,000 annually) in 2022 for individuals who have worked in Canada and contributed to the plan. CPP/QPP survivor benefits may also be available.

The Old Age Security (OAS) pension is a taxable benefit of up to $642.25 monthly (about $7,700 annually) as of March 2022. It’s available to individuals who have resided in Canada for at least 10 years since the age of 18. Seniors aged 75 and over will see an automatic 10-per-cent increase of their OAS pension as of July 2022. The OAS pension is reduced by 15 per cent with taxable income over $81,761 and would currently be eliminated with taxable income over $133,141. Low-income individuals may also be eligible for the non-taxable Guaranteed Income Supplement (GIS) of up to $959.26 monthly (about $11,500 annually) for a single individual.

What are some common misconceptions about each of these benefits that you often hear?

It’s common for OAS benefits to be clawed back.

  • FALSE. OAS clawback only applies with taxable income over about $80,000 and is estimated to affect only a small minority (about 5 per cent) of all OAS recipients.

I can count on getting the maximum CPP/QPP pension of $15,000:

  • FALSE. The average CPP recipient collected only about $8,400 last year.

I can use annual pension-splitting for CPP/QPP and OAS benefits with my spouse or common-law partner.

Canadians often hear about the benefits of delaying CPP and OAS? What are your thoughts?

Your CPP/QPP pension will increase by 0.7 per cent for each month that the start date is delayed after age 65, with a maximum increase of 42 per cent if you start receiving the pension at age 70 or later. Your OAS pension will increase by 0.6 per cent for each month that the start date is delayed after age 65, with a maximum increase of 36 per cent if you start receiving the pension at age 70 or later.

A 2020 study from the Canadian Institute of Actuaries authored by Bonnie-Jeanne MacDonald, director of financial security research at Ryerson University’s National Institute on aging, found that delaying CPP is the safest, most inexpensive approach to receiving more secure retirement income. Yet 95 per cent of Canadians claim their CPP by age 65.

You may wish to start receiving your pension (both CPP and OAS) at age 65 (or earlier for CPP) if you actually need the money, have shortened life expectancy (perhaps due to illness), or wish to keep benefits lower throughout retirement, to potentially lessen the impact on other income-tested benefits during lifetime.

A reader asks: Can I continue working while collecting CPP AND OAS?

Yes! If you continue to work while receiving CPP pension benefits and are under age 70, you can continue to make CPP contributions, which will give you postretirement benefits

Note that if you work past age 65 and are not yet receiving CPP pension benefits, you must still contribute to the CPP. However, your contributions will not result in a postretirement benefit. If you were already eligible for maximum CPP pension benefits as of age 65, this would mean that any contributions made to the CPP between ages 65 and 70 would not further increase CPP pension benefits.

A reader asks: I’m currently retired and collect both CPP and OAS. Right now, my total income is well below the OAS clawback but I’m about to receive a one-time $200,000 gain on the sale of a recreational property. What will be the impact now and long term on my OAS?

Your taxable income will increase by $100,000 (50 per cent of the capital gain) in 2022. The OAS recovery tax may apply on your 2022 tax return to claw back a portion (or all!) of your OAS pension. Your monthly payments will automatically be reduced at source starting in July 2023, to withhold amounts that are expected to be clawed back on your 2023 tax return. If you expect lower taxable income in 2023, you can file form T1213OAS – Request to Reduce Old Age Security Recovery Tax at Source to maximize the monthly payments you’ll receive during 2023.

A recent widow asks: Can you discuss how CPP survivorship benefits work. What happens if you become a widow while collecting CPP/OAS or before you begin taking these benefits?

CPP survivor benefits may include a lump sum death benefit of $2,500 paid to the deceased contributor’s estate, as well as monthly survivor’s benefits paid to you (as a surviving spouse). The amount of your survivor’s benefits depends on:

  • whether you are younger or older than age 65
  • how much, and for how long, the deceased contributor has paid into the CPP

If you are not receiving any other CPP and are:

  • under age 65, you may receive survivor’s benefits that include a flat rate portion and 37.5 per cent of the contributor’s retirement pension.
  • 65 or older, you may receive survivor’s benefits equal to 60 per cent of the contributor’s retirement pension.

If you already receive a CPP pension, the combined amount of your CPP pension and survivor’s benefits can’t exceed the maximum amount for the CPP pension, which is about $15,000 annually. If you receive CPP disability benefits, different rules may apply.

Any last piece of advice for readers on CPP/OAS?

To help preserve CPP/QPP and OAS benefits consider withdrawing from a tax-free savings account (TFSA), which doesn’t increase taxable income that can reduce the OAS pension and GIS.

You may also consider splitting pension income – including registered retirement income fund (RRIF) withdrawals after age 65 – to decrease income for a higher-income spouse or common-law partner in a year.

Finally, electing to share CPP/QPP benefits to equalize benefits permanently and possibly decrease income for a higher-income spouse or common-law partner can result in less tax on your total CPP/QPP benefits received.

Have a question about money or lifestyle topics for seniors, or want to suggest a story idea for the Sixty Five series? Please e-mail us at sixtyfive@globeandmail.com and we will find experts and answer your questions in future newsletters.