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Greg Demuynck retired at the end of last year, at age 64, after working for the same company, the Alberta Motor Association, for just shy of 38 years.
“People often say: ‘How could you work for the same company for so long?’ But I had 14 different jobs throughout that time, which kept it interesting,” he says in the Globe’s latest Tales from the Golden Age feature.
It was after suffering a heart attack in 2019 that he started thinking about retirement. “It wasn’t genetic; it was related to stress and diet – things I could have controlled,” he says. The plan was to retire at age 62, but then COVID-19 came along.
“Since I couldn’t travel, go to concerts, movies or the gym, I deferred my retirement. I was part of the team that implemented my company’s COVID plans, which was a new and exciting challenge, so I stayed,” he says.
But then, after a couple of years, he grew weary of the relentless pace. Read the full story here including why Mr. Demuynck believes why it’s healthy for retirees to separate from work once you retire.
Can Russ, 55, and Vicky, 47, retire early and live comfortably?
When Russ’s employer offered him a buyout package a few months ago, it was an offer he was keen to accept. He was earning $87,000 a year working in manufacturing.
Russ’s plan is to work part time for a few years. His wife, Vicky, plans to retire at age 55. Vicky earns $42,000 a year working in health care. Both have defined benefit pension plans but only Vicky’s is indexed to inflation. Russ is age 52, Vicky 47.
They have two children, one still at home and going to university. Among their short-term goals is doing some work on their Southern Ontario property.
Naturally, they wonder whether their pensions and savings will allow them to live comfortably for the rest of their lives. They also ask, what is a reasonable replacement ratio for employment income in the current high inflation environment – in short, how much will they need to maintain their lifestyle? Their tentative retirement spending goal is $68,000 a year after tax.
In the latest Financial Facelift column, Matthew Ardrey, a financial planner and portfolio manager at TriDelta Financial in Toronto, looks at Russ and Vicky’s situation.
What else we’re reading:
David Suzuki is retiring from The Nature of Things to focus on activism
After 44 years of hosting CBC’s The Nature of Things, the upcoming season will be David Suzuki’s last, the CBC reports. But he’s not gone for good: the public will still be hearing a lot from the iconic Canadian environmentalist.
“This is the most important time in my life,” Mr. Suzuki said in an interview on The National on Sunday. “I hate to call it retirement. I’m just moving on.”
Read the full story here
In case you missed it:
How a retired teacher went from the classroom to spending days with a chainsaw
Ken Pockele, 67, retired in June, 2009 just before his 54th birthday after working for more than 30 years as a secondary school teacher.
“I had some health issues in the years leading up to my retirement, which made me think more about how I wanted to spend my days,” he says in the Globe’s latest Tales from the Golden Age feature. “It certainly made the decision to retire much easier.”
The first few years were spent rebuilding the family cottage on Muskoka Lake, making it more liveable for longer term enjoyment. Mr. Pockele remains active playing golf and hanging out with his grandchild.
“As far as my age goes, I don’t see myself as 67; I still think I’m 39. I get a lot of energy from my wife, who is the same age, and very active,” he says.
Read the full interview here
Ask Sixty Five
Question: With interest rates rising so quickly, guaranteed investment certificates (GICs) are obviously a lot more attractive than they once were, paying close to 5 per cent in some cases. Should I sell some of my losing stocks and buy GICs? At least I’ll be making money.
We asked Simon Tanner, principal financial advisor with Dynamic Planning Partners at iA Investia Financial Services Inc. in Vancouver to answer this one:
The market declines we’ve seen so far in 2022 has many investors reconsidering their mix of stocks and fixed income. The recent surge in interest rates has certainly made GICs and high-interest savings accounts more attractive.
While reviewing the asset allocation within your portfolio is important, be careful about abandoning your investing strategy too quickly. It is far more important to review your overall risk tolerance and investment plan before running towards “guaranteed” income products.
For example, if your current investment plan recommends you hold 70 per cent of your portfolio in stocks to reach your financial goals, what has really changed? Given current inflationary pressures, it’s likely your income needs have increased. It’s also unlikely the higher prices we’ve been experiencing as consumers will decrease anytime soon.
That said, if a GIC paying 4 or 5 per cent is going to produce enough income to reach your financial goals in the short term, then buying some GICs now may be a great option for some of your fixed income needs. However, if you require more yield from your portfolio over the longer term, then now may not be a good time to sell stocks, especially when they are most likely down compared to the start of the year.
While there are no guarantees the stock market will bounce back, it has always done so in the past, eventually.
Also remember that when it’s time to renew your GICs, depending on the term, the rates could be lower than they are today if the Bank of Canada reverses course and starts lowering its policy rate.
There is also the consideration of paying capital gains tax on the growth generated from the sale of any non-registered assets (in other words stocks that aren’t in your RRSP or TFSA). And, if you were to sell any non-registered stocks at a loss, the only way to take advantage of tax-loss selling benefits is to also have capital gains either in the same tax year you sold, or in the future. Profits from a GIC are taxed as regular income, which is not as favourable as profits received from a capital gain or dividend income.
While it’s hard to watch the value of your portfolio go down, it’s best not to react to shorter-term market moves. History has shown that, over time, having – and sticking to – a diversified, balanced portfolio produces the best results over the long term.
Have a question about money or lifestyle topics for seniors? E-mail us at email@example.com and we will find experts and answer your questions in future newsletters.