One of our most popular online financial tools for subscribers is the Canada Pension Plan calculator, which helps you decide the right age to start your CPP retirement benefits. Our thinking behind this calculator was to open people’s minds about the considerable financial benefits of delaying CPP as late as 70.
We have run lots of articles on the benefits of delaying CPP, and much of the response is often skeptical. People are more worried about dying young than living a long life and potentially running out of money. Pro tip: Think more about a long life and its effect on your finances. If you do that, you’ll see the benefit of delaying CPP to get higher monthly payments than if you started at the standard age of 65 or as early as 60.
But there are situations where taking CPP at 60 makes sense. They’re nicely summarized in a recent post in the Boomer & Echo blog: When you need CPP income to pay your bills, when you have a reduced life expectancy and when you have no CPP contributions from age 55 to 60.
Tempted to take the CPP early and invest the money? This blog post says no: “Remember, the CPP is taxable income, so you won’t be able to invest the full amount unless it’s in an RRSP. Then take investment fees into account and consider how much will you need to earn to beat the guaranteed 7.2 per cent return that comes with delaying CPP by a year.”
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Rob’s personal finance reading list…
For those starting to invest later in life
A personal-finance blogger who started investing young offers some thoughts for people starting in their 40s and 50s. The bottom line here is that there’s still time to put together a useful amount of money for retirement.
This is how financial advisers should treat seniors
In this article, experts coach advisers on how to express empathy to clients who are seniors. I’m including it here to help seniors and their families understand the kind of service advisers should be providing clients of advanced age.
Travel savings for rookie, intermediate and jedi-level hackers
Hacks are tricks or shortcuts to save money or improve efficiency. Here’s a good bunch of travel hacks that are presented in an novel way – for those just learning about how to slash travel costs, for those who have some familiarity and for those who already know the score. Note: This is information is from a U.S. website, which means that stuff on banking doesn’t fully apply in Canada.
Cheap ways to fix bad smells in your kitchen
These five tips are will cut bad odours and help you avoid the costs associated with clogged drains and other household issues.
Today’s financial tool
Investors who are interested in preferred shares should check out PrefInfo.com, a directory of major pref-share issues in the marketplace and their features. It’s run as a public service by money manager James Hymas.
Q: Is It a wise financial decision to buy a prepaid funeral package?
A: I did some research online about this and the consensus seems to be negative on prepaid funerals from a financial point of view. While they do lock in costs and protect against future inflation, you could accomplish the same thing by investing your money or putting it in a high-rate savings account. That way, the money is available if you move to another community that is far from the funeral home where you bought your prepaid package. There’s an emotional side to this question, though. A prepaid funeral is a way to arrange the kind of funeral you want and take away the funeral-planning burden from your survivors. On that basis, it could make sense.
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.
What I’ve been writing about
- Bank of Nova Scotia serves up credit cards that save travellers money
- ETF investors, the emerging trend of zero-fee funds is just a sideshow (for Globe Unlimited subscribers)
- This is the place to stash your investing cash (for Globe Unlimited subscribers)
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