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Responsible investing has moved mainstream in recent years.FG Trade/iStockPhoto / Getty Images

Many greying Canadians are adding a green hue to their investment portfolios to make money, manage risk and leave a better world for their children and grandchildren.

Responsible investing – which considers both financial returns and social/environmental good – has long been on the radar of baby boomers and aging Gen Xers, with ethical mutual funds being widely available since the 1990s. Still, it was often seen as a niche strategy that potentially added risk to an investment portfolio.

Consequently, considering only companies with strong environmental, social and governance (ESG) track records may seem ill-fitted for today’s retirees who seek steady, low-risk investment returns.

But responsible investing has moved mainstream in recent years. ESG performance has become a critical metric used by large money managers such as BlackRock Inc. and institutional investment managers like the Canada Pension Plan Investment Board (CPPIB).

“Many mainstream institutional investment managers began to integrate ESG metrics and research into their investment processes in the 2000s,” says Simon MacMahon, head of ESG research at Sustainalytics in Toronto. Joel Schlesinger reports.

Can this mid-50s couple retire in a few years?

It’s a familiar refrain from folks in their mid-50s with retirement in mind. Jake is age 55, Hannah 56. “We don’t plan to work past my wife’s 62nd birthday,” Jake writes in an e-mail. “We’ve both spent a lifetime of long hours and busy weeks and would really like to retire even sooner if possible.”

Jake earns about $80,000 a year in communications, while Hannah has a government job paying $64,000 a year. They have a mortgage-free house in Toronto and substantial savings. Hannah has a defined-benefit pension plan that will pay her $25,630 a year, including bridge benefit, falling to $17,560 a year at age 65.

”We have long aspired to be snowbirds,” Jake writes. Their plan is to spend their winters in a different locale each year “because we’ve always loved to explore.

”They are helping their son with his university education and would like eventually to help him with a down payment on a first home. Naturally, they are concerned about taxes and tax-efficient investing.

Their retirement spending goal is $60,000 a year after tax, indexed to inflation. Are they on track?

In the latest Financial Facelift column in the Globe, Matthew Sears, a vice-president and financial planner at T.E. Wealth in Toronto, looks at their situation.

He’s not lazy, he’s retired

Tired of hearing about how it’s important to stay busy in retirement. For some retirees, “sloth is a high art form that needs constant burnishing.” Being lazy is to be embraced, says Bill Jermyn in this First Person piece for the Globe.

“After I retired, it took me some time to get used to not being gainfully employed,” he writes. “I slowly realized that far from laziness being a sin, it could be my best friend. Part of the assumption is a lack of motivation. However, in my case, it is not a lack of motivation but rather a different view of what is important. I know what I want to do – not much, in fact – and have begun to use laziness as a shield to avoid what I don’t want.”

Mr. Jermyn offers some advice on how to hone laziness into a well-developed skill.

In case you missed it

Should you move to a retirement community?

There comes a time when many older Canadians realize that their home is too much of a burden and it makes sense to downsize into something more manageable. For some retired people, that means looking into retirement living communities – also known as an active adult or adult lifestyle communities – with amenities and services and a chance to be among other seniors who share their outlook and interests.

Selecting the right retirement residence can be one of the most difficult decisions for seniors to make, with many of the same questions first-time home buyers have such as: ‘What can I afford?’ ‘What are the amenities and services available?’ And ‘What are the neighbours like?’

Writer Paul Brent talks to some seniors who have moved to independent-living facilities and are loving it: “I didn’t want to be in a big high-rise or interact with neighbours that were younger than I was or rowdier than I was,” says Donna Weddell, 74, who lives in an adult lifestyle community building in Burnaby, B.C. “This seemed like a very good fit: I would get the socialization. I meet new people in like circumstances, and everything is provided for me.”

Why so many of your fashion icons are seniors

The Instagram model is posing in a powdery blue skirt set and chunky pink orthotic sneakers with a matching backpack hanging off her small shoulders. She’s demonstrating t'ai chi, a sport she does competitively, on a colourful street in Vancouver’s Chinatown.

The model, Mrs. Ma, isn’t your typical Instagram star but has become somewhat famous after being featured in a project-turned-book, Chinatown Pretty, by photographer Andria Lo and writer Valerie Luu.

During dim sum dates in Chinatown, the creative duo noticed that seniors in the neighbourhood had a very distinct style: “Lots of colour, pattern, Supreme hats mixed with velvet, quilted, two-piece sets that they got from Hong Kong,” Ms. Luu says. “And there were so many unexpected, colourful, beautiful, touching details – maybe they were wearing a hand-knit sweater their sister-in-law made or a shirt made from leftover scraps from a sewing factory where they worked.”

The scenes made Ms. Lo and Ms. Luu want to know more about the poh pohs (grandmas) and gung gungs (grandpas) that were rocking these unique looks. And when they started posting their miniprofiles on Instagram, they realized other people did, too. Stacy Lee Kong reports.

What else we’re reading

Snowbirds set to return to U.S. in droves with borders about to reopen

The news that the United States is reopening its land borders to fully vaccinated Canadians arrived too late for Bob Slack. Every November, the retired school principal and his wife Lois load up their car and drive from their home in Athens, Ont., to Winter Haven, Fla., where they spend five and a half months in a golf community southwest of Orlando, joining the estimated one million snowbirds who make the annual pilgrimage to the U.S. each year.

They made the same trip for 23 years – until 2020, when the pandemic arrived, the U.S.-Canada border closed and they decided the health risks were far too great. “We didn’t go because we were anxious,” Mr. Slack, 79, tells Globe write Gayle MacDonald in this recent article. “The reports coming out of Florida were not good.”

Many snowbirds shared the Slacks’ concerns, which explains why 70 per cent cancelled their travel plans last year. This year, the Slacks are going to return, but because they made their plans weeks ago – long before this week’s announcement that vaccinated Canadians will be able to enter the U.S. by land (and ferry) some time in November – they’ll be boarding a plane to get there and shipping their car south.

”There are still too many unknowns,” Mr. Slack says. “We don’t know if we could get refunds on our plane tickets or for the shipment of the car so we’re going to stick with the original plan. I must say, though, that we’re thrilled with the double-vaccine mandate. It raises our comfort level that much more.”

The reopening of the border is expected to mean more snowbirds will be spending winter in the U.S. South this year. Both the Canadian Snowbird Association and Snowbird Advisor – two Toronto-based research and advocacy organizations – predict the loosening of travel restrictions means an estimated 90 per cent of snowbirds will travel to their homes or rental properties this year. (Proof of vaccination will be required to cross.) Not quite prepandemic levels but very close.

Why oatmeal, protein and rest are key for Canadian 80-and-over Boston Marathon champion

When Canada’s Keijo Taivassalo was about 100 metres from the Boston Marathon finish line earlier this week, he noticed a runner with grey hair ahead of him. Mr. Taivassalo thought it was possible the man could also be in the 80-and-over age group, so he made a furious sprint to the finish to catch him.

”My foot was just ahead of his foot, it was so close,” he told Gregory Strong of The Canadian Press. “It was just incredible. I was so happy. But that showed I still had energy left to be racing in a marathon right to the finish line.”

It turned out the other runner wasn’t in his age category after all. That final dash gave the 82-year-old Mr. Taivassalo a time of 4 hours 10 minutes 23 seconds, well over half an hour ahead of his nearest 80-and-over competitor.

It was the second straight 80-and-over title for Taivassalo, who was victorious the last time the Boston race was held in 2019 – also winning by well over half an hour – with a time of 3:47.10.

”My secret is oatmeal,” he said. “Every morning I eat oatmeal and I mix all kinds of fruits in there. That gives me a good start for the day.”

Ask Sixty Five

Question: I would really like to know all the expenses and legalities for my daughter when the time comes that she will have to sell my house. I would like advice on if I could put her on as a joint owner of the asset now. What taxes, expenses are expected? Is there any way for her to avoid probate? I have her as a joint owner on my saving accounts. I was told that would even go to probate. It was suggested that I liquefy everything and put it in a company, but that I have to do it before I turned 85. All of this is very confusing. I would really appreciate some help, but don’t know where to turn.

We asked Jag Gandhi and Mark Chan, both vice-presidents of wealth planning at Gluskin Sheff in Toronto, to answer this one:

While under some circumstances joint ownership of assets can help avoid probate tax, we don’t generally recommend probate planning by owning assets jointly with an adult child. If your estate is required to be probated on death and you only have one will, there is the possibility the value of the jointly held assets would be included for probate tax purposes.

Owning assets jointly with adult children could also result in other issues, such as exposure to creditors or the inclusion of the assets on a potential marital breakdown for your daughter. If your daughter becomes a joint owner on the property, you would realize a taxable disposition on the portion transferred to her and may use the principal residence exemption (PRE), if available to you.

However, the PRE may not be available to her to shelter any gains on a future sale of your home if she already owns and lives in her own home. Resolving issues surrounding joint ownership after your death could result in your estate spending more money than the amount you are trying to save on probate taxes.

The executor of your estate undertakes significant responsibility in dealing with the sale of any real estate property. In addition to being responsible for the property’s interim upkeep, property tax and insurance, the executor has a fiduciary duty to maximize the value of estate assets for the beneficiaries. Failure to exercise this fiduciary duty may result in significant legal liability to the executor.

The suggestion of liquidating your assets and transferring the amount to a corporation and creating multiple wills to avoid the application of probate tax only works in certain provinces in Canada. However, the upfront cost to incorporate and annual maintenance costs may exceed the probate tax that you’re trying to save.

As an alternative, you could consider creating an alter ego trust (AET) during your lifetime. As long as you are over the age of 65, a resident of Canada and are the only one benefiting from the trust during your lifetime, you could consider transferring your assets into an AET now. By doing so, you are removing the assets from your estate, and therefore, avoid the application of probate tax on those assets at death. On death, the AET can outline how the assets owned by it are to be distributed according to your wishes, similar to the residue provision under your will.

You should speak to an estate planning professional about whether this option is right for you.

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.

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