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After more than 20 years working in government, including as a Canadian immigration officer with foreign postings, Ellen Yachnin decided to take early retirement in mid-2019 at age 56.
She then spent a year and a half serving on boards, upgrading some skills and spending time with her family, before launching her own immigration consulting firm in February. Ms. Yachnin built the company based on her experience as a diplomat, including skills and knowledge to best present a client’s case to Canadian immigration
“I like giving back to people, helping people. I thought, ‘What do I have to give? My knowledge of immigration,” Ms. Yachnin says, now 58.
With a 16-year-old child, working independently from her Toronto home gives Ms. Yachnin the flexibility she needs. She’s one of a growing number of older Canadians taking the entrepreneurship route in the later stage of life. The Business Development Bank of Canada says entrepreneurship has tripled among people over age 55 since 2000. For a retiree who may have no entrepreneurial experience, launching a business can be a challenge. Kathy Kerr looks at some advice from experts on what to consider.
What happened to the promise of universal pharmacare?
Canada is the only developed country in the world with a universal health care system that doesn’t include universal coverage of prescription drugs. The federal Liberal Party promised to “take the critical next steps to implement national universal pharmacare” during the 2019 election, and some subsequent throne speeches, but the discussion appears to have been largely sidelined since the pandemic.
That’s even though Canadians continue to support universal prescription drug coverage. An Angus Reid Institute survey released last fall showed 86 per cent of Canadians support pharmacare, and 77 per cent said increasing coverage for Canadians should be a high priority for government.
While Prime Minister Justin Trudeau’s minority government appears to have the political support necessary to push through a pharmacare plan, given that the NDP is fully behind it, not all provinces are. Cost is also a concern, especially as the government’s COVID-19 expenses continue to pile up. Paul Brent looks at the issue as part of a special report on health care.
In case you missed it
Advice for seniors on how to downsize their stuff
Over the past few months, Carolann Harding has been helping her mother, Gloria Harding, move from her condo into an assisted living apartment in St. John’s. The experience has uncovered just how much stuff a person can accumulate over a lifetime. “It’s been the process of going through piece by piece, drawer by drawer, box by box, and mom not realizing half the stuff that she had,” she says.
Fortunately, Ms. Harding and her mother were able to go through her accumulated items together, deciding who would get what and what could go. Some are forced to do that difficult task alone in the throes of grief.
“It’s easy to get rid of junk, but the hardest part is going through all the old stuff, finding things from my grandmother when she was a little girl,” says Ms. Harding. “What do you do to honour those memories of your grandparents and your parents and things like Bibles from 1900? That’s the kind of stuff I’m really struggling with. You can get rid of the junk but how do you sort and prioritize the sentimental things?”
The rise of retail and mass production since the end of the Second World War has put more things in the reach of more people than ever before. As a result, baby boomers have a lot of stuff they either need to downsize now, or leave to their heirs to handle it. Dene Moore reports
Why retirees should pay attention to the withholding tax
Withholding taxes are unavoidable in your working years since, for most employees, they’re automatically deducted every pay period. Being retired doesn’t exclude you from making remittances to the Canada Revenue Agency (CRA) on your retirement income, but there are more choices of how and when to pay the CRA that can impact your lifestyle.
Experts say the key is having a withdrawal strategy that considers your different retirement income sources and their tax rates, to keep more money in your pocket.
“You really have to think about cash flow planning when going into retirement, and where you’re going to draw from, to make sure you can pay your bills every month,” says Allison Marshall, vice-president of financial advisory support at RBC Wealth Management in Toronto. Joel Schlesinger reports
What else we’re reading
Think an inheritance will solve your problems? Think again
It would be nice to believe that a financial windfall, such as winning the lottery or receiving an inheritance, is a silver bullet to solving all financial problems. However, history is filled with stories that prove this often is not the case.
This U.S. article notes many heirs have lost their fortunes to extravagant lifestyles, lavish gifts, multiple costly divorces and illicit habits.
“If you believe you will receive an inheritance one day, it is important to know that a lump sum will present opportunities – but also some challenges,” the author states, while highlighting the ways people mishandle a windfall and recommendations on how to best prepare yourself for an inheritance.
Advisors can help baby boomers weigh early retirement amid COVID-19
Denise Gallant, a veteran certified financial planner with Applied Wealth Strategies in Sydney, N.S., is finally visiting her three-year-old granddaughter in Edmonton for the first time since the COVID-19 pandemic began. No glitchy Zoom call required.
If the past 20 fraught months have taught her anything, it’s that spending time with family should never be taken for granted. Life’s too short. Many of her clients who are close to retirement are feeling the same way, she says. After months of uncertainty, some are re-evaluating their priorities and taking the plunge to leave work earlier than planned. The pandemic, and its emotional fallout, has been a catalyst to spark “the Great Resignation.”
“Oh yes, we’re seeing this,” Ms. Gallant says. “In a perfect world, people would retire when they are financially ready, but the decision to stop work is often about many other things. Financial security is not always the priority.”
A recent survey from the Canadian Institute of Actuaries shows the pandemic has altered how non-retirees are planning for their golden years fundamentally. It’s not always a pretty picture, though. Eight per cent of survey participants planned to retire early due to pandemic-related health and safety concerns, while another 7 per cent would retire sooner because they already lost a job or were laid off. Kira Vermond reports for Globe Advisor
Ask Sixty Five
I turned 65 in April of 2021. Unfortunately, at that time I was helping my husband who is much older than I recover from major surgery. I threw 100 per cent of my energy into his battle and let everything else slide. It wasn’t until August that I was able to catch up with the previous many months of managing things like our chequing account. I was shocked to find out when I reviewed the monthly statements that I was receiving Old Age Security (OAS). I assume that at some time in the past year, before I had decided to defer OAS and Canada Pension Plan (CPP) until 70, I must have filled out a form that made this payment of OAS happen as soon as I was 65. I have written two very definitive letters to the local office requesting they stop paying me OAS and asking to reimburse what was paid over the five months previous. The monthly payments have stopped but there has been no acknowledgement of my letters or anything about the reimbursement I requested. What can I do?
We asked Jamie Golombek, managing director of tax and estate planning for CIBC Private Wealth Management in Toronto, to respond to this one:
OAS payments generally begin automatically at age 65, although individuals may apply to defer benefits up to age 70 and receive a higher amount. Individuals who have been receiving OAS pension for less than six months and wish to cancel (and defer) the OAS payments can submit a request in writing (there is no prescribed form). Amounts already received must be repaid within six months.
Since you have already submitted a written request within six months of starting to receive payments, and payments have stopped, it seems the request to cancel OAS may have already been approved. I would suggest contacting Employment and Social Development Canada (ESDC) to confirm the status of the request and make arrangements for repayment of amounts received within the six-month period. Options may include contact online, by phone, by e-mail or in person, see www.canada.ca/en/employment-social-development/corporate/contact/oas.html .
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 firstname.lastname@example.org and we will find experts and answer your questions in future newsletters.