Why this 63-year-old doesn’t count on any one source of income to see him through retirement. Plus, why all the fuss over mandatory RRIF withdrawals?

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“I semi-retired at age 55 after hiring a manager to run my trucking company, then retired fully at age 57 after winding down the business,” says Mickey McCarthy, 63, in the latest Tales from the Golden Age. “My wife retired last summer at age 57 from a career in hospital administration.”

McCarthy started dreaming of retirement at age 14, he adds, and began working part-time and saving money. “It meant when everyone was out partying at the lake, I was probably working, but I still had my share of fun growing up,” he recalls. “The discipline came from my parents, who had a strong work ethic before they retired in their early 60s. They were good at managing money and showed us how to enjoy it without wanting for too much. I have a philosophy that I’d rather do than have.”

McCarthy, who lives in Edmonton, was able to retire financially thanks to his business income and some good investment decisions made over the years. “As a kid, my Ukrainian grandfather told me to invest in something tangible, so I bought gold bullion, which I still own. My wife and I also own various types of real estate, some of which we’ve sold off in recent years.”

The couple also have an investment advisor who has their money in low-risk investments with the aim of returning about 5 to 7 per cent a year. “I told my advisor, ‘I don’t want to go back to work again, so let’s be reasonable,’ with the target investment returns.”

Read the full article here.

Are you a Canadian retiree interested in discussing what life is like now that you’ve stopped working? The Globe is looking for people to participate in its Tales from the Golden Age feature, which examines the personal and financial realities of retirement. If you’re interested in being interviewed for this feature, and agree to use your full name and have a photo taken, please e-mail us at: goldenageglobe@gmail.com. Please include a few details about how you saved and invested for retirement and what your life is like now.

What percentage of homeowners have paid off their mortgage?

In the latest Charting Retirement article, Frederick Vettese, former chief actuary at Morneau Shepell and author of Retirement Income for Life, takes a look at the number of homeowners who are mortgage-free by their retirement here.

Why all the fuss over mandatory RRIF withdrawals?

If the federal government wants to score points with seniors, writes personal finance columnist Rob Carrick, it will eliminate or roll back the requirement to make a minimum annual withdrawal from registered retirement income funds.

According to Carrick, eliminating the need to withdraw money from a RRIF each year would give seniors more flexibility in managing their retirement savings over increasingly long lifespans. But mandatory RRIF withdrawals aren’t as onerous as they’re sometimes made out to be. In no way do they force seniors to deplete their savings in a way that could cause them to run out of money.

The C.D. Howe Institute recently described mandatory RRIF withdrawal requirements as being stuck in the past, and urged they be eliminated or relaxed. A collection of groups have urged the federal government to raise the age at which registered retirement savings plans must be converted into RRIFs, and reduce the required minimum withdrawal.

Read the full article here.

In case you missed it

What to avoid in a divorce to prevent financial harm

The tone of divorce proceedings runs the gamut from cordial to downright cruel, says personal finance writer Mariya Postelnyak. But while feelings of anger are common, she adds, attempts to inflict financial harm on a spouse will backfire – and can prove very costly for those who try, lawyers say.

“People will sometimes fail to disclose assets, they’ll try to hide them and play games with the value, or they’ll hide money offshore,” says Andrew Feldstein, a lawyer at Feldstein Family Law Group. “There’s always an element of power and control that takes place between former spouses and finances is the element that bleeds into power.”

In April, a couple in Australia made the news for finalizing their 11-year-long divorce after both spouses consistently refused to provide a complete picture of their finances. And there’s no shortage of infamously difficult divorces in Canada. Take the case of Bruce McConville, an Ottawa man who claimed he burned about $1-million in savings to avoid giving it to his spouse amid divorce proceedings.

Read the full article here.

This is how much you should plan to spend on dental and medical costs in retirement

The least fun aspect of retirement planning is figuring out how much you’ll spend on dental and medical costs, says personal finance columnist Rob Carrick.

Nailing down your budget for travel, entertainment and other activities is the most fun part, he adds, while food and shelter are automatic. With health and dental costs, you’re contemplating expenses that potentially cost a lot, bring no joy and document your body’s natural decline into old age.

Longer lifespans and a strained health care system add some urgency to including health and dental costs in your retirement budget. But how much should you plan to spend on out-of-pocket expenses not covered by provincial health care plans?

Read the full article here.

Retirement Q&A

Q: What if someone who is ready to go into semi-retirement or retirement and wants to “port” their group plan benefits, is that possible? And how would the life insurance portion of that benefit work? Would it be cashed out, or would there be an option to continue paying into the life insurance once departing their place of work?

We asked Kim MacFarlane, vice president, Group Benefits, Manulife, to answer this one.

This is a really great question and unfortunately the answer is a bit of ‘it depends.’ Most benefit plans terminate at retirement, but there are still a few employers that may provide some form of benefit coverage into retirement so it is important to check with your coverage. There is no way to ‘port’ your coverage over to an employee funded benefit that offers the same health and dental package that your employer provided, but there are some very good options for people who may be losing their health and dental coverage.

For example, some group benefits providers like Manulife offer guaranteed acceptance for people whose group benefits are ending; all that is usually needed is a completed application within 90 days of losing the group coverage. In fact, robust plans offer tiers of increasing coverage that cover pre-existing conditions and eligible medications so members can maintain their prescription and overall health coverage beyond retirement.

When it comes to life insurance, there are conversion options for plan members that enable them to transition their employer benefit coverage without providing any medical information to qualify. If the employer coverage reduces or terminates, the plan member has 31 days to convert to an Individual Life policy for up to a maximum coverage amount of $200,000. That said, there are options in the market that may be more affordable if you are in good health.

As during any life change, you may want to consider speaking to your financial professional or advisor to evaluate all the available options in your situation.

Have a question about money or lifestyle topics for seniors? E-mail us at sixtyfive@globeandmail.com and we will find experts and answer your questions in future newsletters. Interested in more stories about retirement? Sixty Five aims to inspire Canadians to live their best lives, confidently and securely. Read more here and sign up for our weekly Retirement newsletter.