Content from The Globe’s weekly Retirement newsletter. To subscribe click here.
Jeanne Keith-Farris’s earliest memories growing up in California are of playing in the surf with her mother. She dreamed of being on a board on the water when she got a bit older.
Then her family moved to land-locked Colorado when she was 12, followed by Calgary, where she lived until her retirement about a decade ago. Her surfing dreams dried up over the years – but they never died.
When their working years were over, Ms. Keith-Farris and her husband moved to Ucluelet, on the west coast of Vancouver Island and there, in the sand and surf of the Pacific Ocean, her surfing dreams were reignited.
“It’s a little daunting, starting, because I would have been 56 or so then,” she says. She played around in the surf for a few years but “that was not cutting it. That was not surfing.”
“A few months before my 60th birthday I caught my first so-called green wave [an unbroken wave, the kind you see in surf pictures] and just got hooked on it,” she says. “You get that one wave out there that one day and you’ve just got to find that magic again because it feels so amazing. And I won’t get them as often as some of the younger kids, but it keeps happening and I keep going for more, trying to find that elusive better wave.”
Now 65, she owns seven surfboards and hits the waves nearly every day when the weather co-operates. She inspired her daughter to learn and together they have gone three times to a surf school in Los Olas, Mexico.
“I built up strength and endurance, and then became obsessed with getting better,” she says. “I do keep improving and that’s what keeps me going out. It’s slow progress at this stage in my life.” Dene Moore reports.
Can this 30-something F.I.R.E. couple achieve financial independence before they hit 40?
Inspired by the F.I.R.E. movement, Brandon and Michelle – both in their mid-30s – have built a portfolio of income-producing properties and dividend-paying stocks they hope will soon free them from having to work. Characterized by extreme saving and investing, F.I.R.E. stands for “financial independence, retire early.” It helps if you earn a good income.
Brandon earns $127,000 a year plus bonus and employer pension plan contributions, while Michelle earns $92,000 a year. Their combined employment income totals $238,000. Michelle has a defined benefit pension plan partly indexed to inflation. They have two children, ages one and three.
Their aspirational goal is to “become financially independent, non-reliant on employment income, before 40,” Brandon writes in an e-mail. Ideally, they could live off their dividends and rental income. Their more realistic goal, perhaps, is to have enough rental and dividend income to allow them to work part-time – “resulting in about 50 per cent of current pay” – in five years or so, Brandon writes.
Their retirement spending goal is $120,000 a year. Achieving it on half the salary will be a challenge. “When can our passive income cover our expenses?” Brandon asks.
In the latest Financial Facelift column, Matthew Ardrey, a vice-president and portfolio manager at TriDelta Financial in Toronto, looks at their situation.
How a Vancouver firm is making clients’ dreams come true before retirement
For too long, financial advisor Mike Preto would come across investors in their 70s and 80s with big portfolios who never had the confidence to spend their hard-earned and well-invested money.
“They were always worried about running out,” he says, adding that many expressed regrets they didn’t enjoy their money more when they were younger.
Frustrated by these unfulfilled experiences, Mr. Preto and his team at Vancouver-based Hillside Wealth Management with iA Private Wealth Inc. decided to reframe the business to help clients create bucket lists earlier in life – and then save and invest to fulfill those dreams sooner rather than later.
The firm, which manages about $200-million in assets, has developed what it calls the “dreamscape” process to help clients identify their personal dreams – like taking a year off to travel with family, buying recreational property, or purchasing an RV and driving it across the country. The advisory team then creates what it calls a “dream pool” with surplus funds not needed to fund their retirement lifestyle.
“We take the time, even before that dream pool forms to really figure out what people want,” Mr. Preto says. “That way, we know the money is going to the right place.” Brenda Bouw reports for Globe Advisor.
Retirement means travel and time to manage his own portfolio for this 70-year-old
In the latest Tales from the Golden Age, Alex Lloy, 70, of Kincardine, Ont., talks about his decision to retire. It came five years ago, while on vacation with his wife in Barbados.
“I looked at her and said, ‘This is it. When we get home, I’m going to sell my business and retire.’ I wanted to enjoy my life and, for me, retirement was the answer,” he says.
He and his wife are enjoying life in a smaller town, travel and doing projects around the house.
“Our life is so full and blessed; we have a hard time counting our blessings. We know that we’re responsible for our enjoyment and happiness and that if it’s not there, it’s because we’re not creating it,” he says. “Overall, we are delighted with our retirement life. It is full of love, fun and adventure – exactly how we planned it.”
Three ways to reduce the impact of an aging Canadian work force
New data from Statistics Canada shows that for the first time, more than one in five members of the Canadian work force are close to retirement age (55-64). What’s more, this cohort of older workers outnumbers the young adults (aged 15-24) who are entering the labour market.
While our aging population certainly isn’t breaking news, Jason Ribeiro, a University of Calgary researcher, believes there are three key ways to lessen the impact of the demographic challenge.
“I think the recognition that this is a challenge that’s not going to be solved entirely by the government is important,” Mr. Ribeiro tells Deja Leonard in this article. All sectors must be engaged in partnerships that can creatively manage labour shortages, he says.
In case you missed it
Why more seniors are hitting the greens
Chris Stoat realized how fortunate she was to be a golfer over the past two years. The 78-year-old took up the sport in 2018, giving her some time to improve her swing before COVID-19 came along and crowded the links with people seeking a social and physical outlet during the lockdowns.
“It’s so well-suited to COVID: you’re outside, you’re social distancing, you’re active, and it’s something you enjoy,” Ms. Stoat says.
She’s among a growing group of retirees who have taken up golf in recent years and are planning to follow through with the popular pandemic pastime. Anna Sharratt reports.
Seniors are busting out their travel bucket lists
Elizabeth Forsythe wasted no time booking a trip to Florida after travel restrictions were lifted on the Canada-U.S. border.
The 69-year-old from Sussex, N.B., will be heading to Orlando with a group of girlfriends for some shopping and fun in the sun in mid-May.
“We have rented a car and a house and plan to do a lot of shopping, eating, sitting around the pool and take some day excursions,” says Ms. Forsythe. She is used to going south at least once a year to visit her brother in South Carolina and enjoy a sun-destination getaway, plus some quick jaunts across the border.
“We are [close] to the border and I go shopping with friends in Bangor several times a year. With the pandemic, this all came to a screaming halt.”
Like many Canadians who plan to take advantage of their retirement years by travelling, Ms. Forsythe is very pleased restrictions have ended. Dene Moore reports.
Ask Sixty Five
Question: During the pandemic we bought seven acres of vacant land on a lake. We would like to build a cottage on it in about five years. We’ve never built a house before. What are our money options to raise at least $300,000 to build from scratch? I am not sure conventional banks would provide a mortgage to seniors. We have assets like a home and investments, but our income draw from investments is pretty low.
We asked Mayeer Pearl, audit and advisor partner at Crowe Soberman LLP, to answer this one:
This question scares me. We are in an inflationary environment with a retired couple living off of fixed income and pensions. They need to examine if they can afford first to build the cottage and then once built, can they maintain it?
The other concerning item is their budget. They currently estimate that the cost to build will be $300,000 and state they want to build in five years. With the current rate of inflation, that cost could grow exponentially before they are ready to build.
In terms of financing the build, there are a few options. They can mortgage their home (assuming it is currently mortgage free), they can borrow against their investment portfolio, they can sell their house and rent, sell their investments or any combination of these options.
They have stated that their income from investments is already low. This build will lower their available cash flow regardless of how they finance it, as income will need to be used to service the debt, or assets that currently generate income will be sold to pay for construction. They need to understand whether their budget can sustain this new property.
Although not mentioned in their question, they could help defer operating costs and generate additional cash flow by renting out the cottage and or their current home when they are not using them.
The real question they need to ask themselves is whether or not they can afford to build, not how to finance it.
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 email@example.com and we will find experts and answer your questions in future newsletters.