If work is a big part of your life, retiring can be like getting reassigned to a new job where you have no skills or experience.
A surprisingly high number of people have trouble with the transition. Recently, I included a link to a post on a retirement blog saying that 28 per cent of retirees are depressed. A 69-year-old reader of this newsletter had some thoughts about adjusting to retirement and got in touch to share them.
You need to have something to look forward to in retirement, Ottawa-based Paul Pagotto wrote in an e-mail. “Simple things like weekly coffee clubs, monthly breakfast clubs and more fun things like a movie, show or sports event.”
Mr. Pagnotto said travel is something that he particularly looks forward to, including the research and planning for each trip. Three more of his thoughts on finding your way in retirement:
- Spend time with grandchildren: “From talking to friends, that’s a big motivator.”
- Exercise: “I have enjoyed doing even simple activities like hour-long walks and short hikes through parks and forest areas – connecting with nature.”
- Imagine retirement before you actually retire: “I have found the pre-planning for retirement to be very helpful,” he wrote. “A transition, working three days a week before retirement, helps.”
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Rob’s personal finance reading list
Shrinkflation is why you’re still hungry
A gallery of grocery items that have shrunk in size. I was surprised at how much less we’re getting – double-digit declines for many items. Now, for a look at yet another distasteful trend in food – skimpflation, or the decline of food quality. Example: A cheese spread that no longer has cheese as its main ingredient.
Thoughts from a lifelong renter
As part of a Toronto Life series where young couples discuss their housing choices, a 34-year-old woman talks about why she’s a committed lifelong renter. Now, for a visit with a Toronto couple living rent-free – and happily – in a van. Finally, some pushback from a renter against landlords with too many rules.
Why travel insurance claims get rejected
Six common reasons why you won’t get reimbursed for a trip cancellation or a health-related claim.
Which is the cheaper ride?
A comparison of three-year ownership costs for EV, hybrid and gas-powered versions of the same vehicle. Prepare to be surprised at how similar these costs are in many cases.
Ask Rob
Q: My children are heavily invested in exchange-traded funds. I am a dividend investor. What are the tax implications when you withdraw comparing the two? Does an ETF that tracks banks give you the same result as holding a mix of back stock?
A: Dividend ETFs typically distribute dividend income to shareholders combined with a small return of capital as well, whereas bank stocks held directly pay strictly dividend income. The resulting tax impact in non-registered accounts should not be major. The management expense ratio for a dividend ETF will reduce its yield by roughly 0.2 to 0.5 of a percentage point. The offsetting benefit of dividend ETFs is diversification. Bank stocks have been hit hard lately, but dividend ETFs are performing well for the most part.
Do you have a question for me? Send it my way. Sorry I can't answer every one personally. Questions and answers are edited for length and clarity.
Tools, Explainers, Guides and Charts
An explanation of proposed changes to the Alternative Minimum Tax, applied to people who earn a lot of income via capital gains or claim substantial deductions/credits for things like charitable donations.
The Money-Free Zone
With its horns and dreamy backing vocals, Bob’s Casino might be my favourite song of the summer so far. It’s on the recent album by Grian Chatten, whose day job is lead singer for the excellent post-punk band Fontaines D.C.
Watch this
A TV news report about a woman who bought a $300 gift card at a store and found it had already been redeemed. Here’s a follow-up story about the refund she eventually got, as well as some commentary on how this was not a one-off problem.
ICYMI
- I tried a cash-only budget for a week. Here’s how quickly I saw $150 disappear
- Can Linda, 74, afford to give an early inheritance to her three children?
- How hard is it to save enough to retire at age 60?
More Rob Carrick and money coverage
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Even more coverage from Rob Carrick: – H6
- 🎧 Catch up on Stress Test: Why millennials and Gen Z are Alberta-bound for a more affordable life • Rising interest rates brought pain for new homeowners – and opportunity for house hunters • Why more Canadians are choosing to be childfree or delay parenthood • Love in the time of inflation: How to manage rising costs when dating • You're not bad at money – you're suffering from money shame • Retirement might look different for Gen Z and millennials. Here's how to plan for it • Recession-beating tips for the job market, housing, investing and the cost of life • Is the middle class dead for millennials and Gen Z?
- ✔️ The housing file: A house isn’t special. Get your head straight about the reality of home ownership • The good, the sad and the unaffordable: Saving for a home downpayment in Canada’s big cities • Property taxes are popping in some cities – how worried should you be about other tax hikes? • Our other real-estate problem – people have too much wealth tied up in houses • Borrowers and savers, here’s how to time the eventual rollback of interest rates
- 📈 Investing: Canada's top digital broker is TD Direct Investing, with an assist from the TD Easy Trade app • 2023 Globe and Mail ETF buyer's guide part one: Canadian equity ETFs • For the ultimate in cheap investing, check out the Freedom .08 ETF Portfolio • Yes, there is risk in Canadian bank deposits for the unwary and complacent • CDIC covers bank deposits, but who protects your investments if your broker goes bust? • Answers to your questions about the low-risk ETF paying almost 5% • Happy fifth birthday to one of the all-time best investing products for everyday people • An investing strategy that wins cleanly over the long term by outperforming in bad years like 2022
- 💰 Your money: Mortgage holders, savers and GIC investors, it’s time to change your thinking on interest rates • How much debt is each generation of Canadians carrying, and how do you compare? • For the sake of their financial futures, young people should leave Toronto and Vancouver • This practical new spin on a savings account might just peel you away from your big bank • Rental fraud grows amid rise in fake, falsified tenant applications • Are Canadians worse off financially now than in the 1980s? • From groceries to auto loans, here’s how much more it costs to live right now • When saving for retirement, should you change your asset mix over the course of your career? • Do retirement income needs always rise alongside inflation? Not necessarily • When the bank suggests you lock in your variable rate mortgage, it has an angle
Rob Carrick