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When Maureen Lloyd decided it was time to move from her condo to a retirement home this year, she really had only one stipulation: the place would have to allow her to move in with her cockapoo Lucy and cat Gulliver.
The 82-year-old looked at three or four possible destinations before settling on the Chartwell Waterford Retirement Residence in Oakville, Ont., because of its pet-friendly policies.
As Paul Brent writes, there are some compelling reasons for considering a dog in retirement. (And sorry cat lovers, our feline friends do not offer the same array of benefits.)
Many of the positives are obvious: they get you up and out in good weather and bad, they act as a social lubricant that gets strangers chatting, they improve your mood and ease loneliness and create a built-in routine of feeding and walks. Heck, dogs have even been shown in some studies to reduce blood pressure in their owners. Read more about the pros and cons of dog ownership in retirement here.
Why abolishing mandatory RRIF withdrawals should be an election issue
The federal government should stop dictating how seniors manage their retirement savings, writes Rob Carrick in a recent Globe article.
Mr. Carrick says annual mandatory minimum withdrawals from registered retirement income funds “must go. They’re out of touch with today’s rising lifespans and level of stock market volatility.”
Read more about the argument in this recent article from the Globe’s personal finance columnist.
The pros and cons of getting your kid or grandkids into stocks
Recently, a reader asked the Globe’s Rob Carrick about getting his 13-year-old grandson into investing. “How can we set up an account that I would manage and that we agreed on together?” this grandfather asked.
Mr. Carrick argues that parents and grandparents are doing a good thing in helping make young people familiar with the stock market. “Young adults moving into the work force today and in the future will need to rely more on stocks to reach their financial goals than previous generations,” he writes. The rise of gig work, declining pension coverage in permanent jobs and low interest rates are a few reasons why this is so.”
But is now the best time? Find out what Mr. Carrick has to say in this recent article.
Can this couple shift their travel, lifestyle plans to manage their savings in retirement?
In their early 60s with retirement on the horizon, Linda and Lamont are back for a second Financial Facelift. They have plenty of options but their goals have changed. Back in 2016, when their first Facelift appeared, they wanted to keep their Toronto house and buy a property in Europe. Now they want to stay in the city but continue to travel and want to know the best strategy is for drawing down their hard-earned savings. Their retirement spending goal is $100,000 after tax.
Amit Goel, head of private client investment services and portfolio manager at Hillsdale Investment Management Inc. looked at their situation in the Globe’s latest Financial Facelift article.
In case you missed it
Should you give your kids a living inheritance?
There’s an old saying that it’s better to give with a warm hand than a cold one. Put another way, for many parents, there are benefits to gifting money to the next generation while you’re still alive or providing what’s known as a “living inheritance.”
There’s an emotional reward that comes with giving adult children money to buy a house, start a business, or simply support their families, experts say, as well as financial benefits of reducing the value of your future estate. The trick is not giving away too much so that it spoils the kids, or worse, curbs your retirement lifestyle.
“Assuming parents are in a strong financial position to do so, and if there are excess funds beyond their income retirement needs, then that’s when gifting should often be considered,” Kelly Ho, a partner and certified financial planner at DLD Financial Group Ltd. in Vancouver, tells Joel Schlesinger in this article.
More seniors are hitting the books in retirement
Lily Eng has lost track of just how many courses she’s taken since retiring from her teaching job two decades ago: 20 or 30. Probably more. She’s studied art history, women’s art, Cantonese, Chinese history, comparative religion, critical thinking and the list goes on.
“When I was teaching, I always wanted time to sit down and learn different things,” says Ms. Eng, 80, of Vancouver. “I had to wait until I retired.” Canadians are living longer, healthier lives and, in many cases, are retiring earlier than any previous generation.
Some, like Ms. Eng, also prefer going back to school to more traditional retirement activities like gardening. And, as Dene Moore reports, there is a growing body of evidence that novel learning is one of the most important measures people can take to maintain brain health as they age.
What else we’re reading
Six mistakes that could derail your future retirement plans
Most people understand that how much money you need in retirement depends on your current income, the kind of lifestyle you want in retirement and how much you saved.
A very general rule of thumb is that you can generally expect to spend between 55 to 80 per cent of your annual income every year throughout retirement. The problem is that too many people aren’t saving enough.
This article from Marthastewart.com looks at the six decisions people make earlier life that can impact their future retirement plans.
How to have a successful family meeting about money
No matter how wealthy a family is, educating the next generation about money is considered crucial to overall financial education, preparing for the future, and to becoming a good steward of an inheritance.
For parents who haven’t had conversations early, it’s not too late, according to this Kiplinger article. It offers advice on how to have an effective family meeting that’s both productive and maybe even enjoyable.
Ask Sixty Five
Question: I am retired, and I will be 66 in a few weeks. I took (Canada Pension Plan) CPP early, and have deferred my Old Age Security (OAS). I am married and my spouse is younger than I am. I have been making installment payments for a couple of years now. My husband has not received a notice of installments due. I have received my September and December installment notice from the Canada Revenue Agency (CRA). The payments are almost five times the normal amount due to the abnormally high capital gains I made in 2020.
We sold various ETFs in early 2020, before COVID-19 hit, to fund the purchase of a retirement home in B.C.’s Lower Mainland. This is a once-in-a-lifetime event. As a result, the CRA has pegged my September and December installments at $14,258 rather than the previous installments of $2,880. I have looked up what my total tax payable for 2017, 2018, and 2019 and it has ranged between $14,593 and $15,316. I am expecting my 2021 tax payable is going to fall into that range. I have already made the September payment to show I am acting in good faith. Is there any way of appealing to the CRA to reduce the December and anticipated March 2021 installments?
We asked Jamie Golombek, managing director, tax and estate planning with CIBC Private Wealth Management, to answer this one:
Great news – you don’t have to follow the CRA’s suggested instalments, if, as you say, this was a once in a lifetime event and your 2021 tax bill will be much lower. But let me explain:
Under our tax system, there are three options you can use to determine how much you need to pay each quarter: the no-calculation option, prior-year option and the current-year option. You are permitted to choose the option that results in the lowest payments.
Under the no-calculation option, on the installment notice you received, the CRA calculated your September 2021 and December 2021 instalments based on 25 per cent of the net tax owing on your latest assessed tax return, which for you was your 2020 return which included the sale of various ETFs that triggered capital gains tax. It sounds like you will be better off using the current-year method, whereby you simply base your 2021 instalments on the amount of estimated tax you think you will owe for this year and you pay one quarter of the estimated amount on each instalment date. This option works well for taxpayers whose 2021 income will be significantly less than 2020. Given that you already made that large September instalment payment already, if you also made March 2021 and June 2021 instalments based on your previous history, you may not be required to make any December 2021 instalment.
Provided you make the required instalments and they are remitted on time, no interest or penalties will be assessed. Be careful when calculating installments based on the current-year method, as if you underpay you could be subject to interest. Instalment interest is compounded daily at the prescribed interest rate, which is currently five per cent for overdue taxes. The instalment interest clock starts ticking from the day your instalment was due until the date it is paid (or, if unpaid, until April 30, 2022). An instalment penalty may also apply if the instalment interest is more than $1,000.
Have a question about money or lifestyle topics for seniors, or want to suggest a story idea for the Sixty Five series? Please email us at email@example.com and we will find experts and answer your questions in future newsletters.