Turning 65 didn’t stop this woman from trying new things – like a tattoo. Plus, the shock of your RRIF versus the lows of the stock market

“At 65, I got a tattoo to remind me to keep trying new things.

Seniors are either completely ignored or treated like children. Qualifying for seniors’ discounts is not something I was looking forward to and so turning 50 was my life’s nadir. I have distinct memories of that cold, rainy, miserable August day with many unfulfilled dreams and self-imposed expectations.

After that unforgettable experience, an inner voice told me that I needed to take control of my future. Thirteen years later, during a road trip with my son and his partner, I innocently promised to get a tattoo when I turned 65. I wanted to challenge myself to stay young at heart and this tattoo was going to be the beginning of that odyssey. Seemed simple enough at the time.

Many of us have made promises that we did not keep, but this one felt different. In my heart, it felt like the right thing to do. I am not a risk taker by nature, but this seemed like a risk worth taking.

I had lots of time – over 18 months to design a brilliant tattoo, the perfect design for my soon-to-be senior self. But what tattoo to choose and where to place it became almost daily obsessions. What should it represent? Should it be flamboyant or subtle, black or multicolored? Where should the tattoo be on my aging 65-year-old body? The traditionalist in me agonized over the decision.”

Read Linda Slocombe’s full story here.

Can Liam and Olivia afford to retire and take their dream vacation?

Like many people their age, Liam and Olivia are eager to retire from the workforce, take a big trip to some far-off place, then come home and dote on their grandchildren. Liam is 64 and Olivia is 62. Liam, who was downsized some time ago, is making $25,000 a year as an independent contractor. Olivia earns $70,000 a year as a technician.

They have saved a substantial sum.

The couple have a mortgage-free house in the Greater Toronto Area and two adult children who are financially independent.

“We have always been savers,” Olivia writes in an e-mail. “We paid cash for everything. Once the house was paid, we saved and put our two children through university. We travelled every year with our children when they were at home and we try to now even though they are adults,” she writes.

For their first big retirement vacation, they can’t decide between the Galapagos or New Zealand, but say “we will be toasting each other and enjoying our retirement!” Neither has a company pension. Now that they have saved, they are unsure how to withdraw. Their retirement spending target is $70,000 a year after tax.

In the latest Financial Facelift, Gregor Daly of Efficient Wealth Management Inc. of Mississauga, and Florin Pop, a portfolio manager at Tactex Asset Management Inc. of Thornhill, Ont., to look at Liam and Olivia’s situation.

Want a free financial facelift? E-mail finfacelift@gmail.com

How many healthy years will I have in retirement?

In the latest Charting Retirement article, Fred Vettese, former chief actuary of Morneau Shepell and author of Retirement Income for Life, looks at the trends for Canadian women interested in knowing how many years they can expect to live disability-free here.

In case you missed it

Gordon Pape: If you’re depending on RRIF income, you may be in for a shock

If you depend on RRIF payments for a significant part of your income, you could be in for a financial shock this year. Income from your Registered Retirement Income Fund may be about to decline by hundreds or even thousands of dollars just at a time when inflation is driving up the cost of everything from food to mortgage payments.

The culprit? Last year’s stock market woes, which hit interest-sensitive securities like banks, REITs, and utilities especially hard.

These are the mainstays of many RRIF portfolios. Add to that the worst performance by bonds in 40 years and you have a toxic mix. The result was a big hit to the value of many RRIF accounts.

Those losers should recover over the next couple of years, but in the meantime they’ll create a cash flow problem. Here’s why.

The amount of the annual minimum withdrawal from a RRIF is based on two factors. The first is the plan’s value at the start of the year. The second is your age on Jan. 1, which determines the minimum withdrawal percentage rate.

Let’s work through the math. We’ll assume the account holder was a retired nurse who was age 75 on Jan. 1, 2022, and had RRIF assets totaling $500,000.

The minimum annual withdrawal rate at 75 is 5.82 per cent. That means she was required to withdraw $29,100 last year. In a normal year, her investments probably would have returned more than she withdrew, but 2022 was anything but normal.

Read the full article here.

What to do when you unexpectedly become someone’s caregiver

“On a Thursday afternoon a few weeks back, I exited the neighbourhood pharmacy tightly clutching three packs of 20 adult diapers. They were piled so high I could barely see my path to the pharmacy parking lot. That’s the moment I realized fully that I’d become an unexpected caregiver of a woman named Joanne.

Unexpected because I’m not Joanne’s partner or adult child. She’s my big sister. I’ve known and loved her my entire life. She has dementia. I suspect she’d be mortified if she knew I was keeping her stocked with adult diapers.

It’s just one of an endless number of tasks on the unexpected caregiver’s to-do list.

I’m not alone. In a 2018 report, Statistics Canada said roughly one in four Canadians aged 15 and older provided care to a family member or friend. Caring for parents or parents-in-law is the largest single category. Many are partners, some are siblings and some are parents of adult offspring with acquired brain injuries and other conditions.

Joanne and I expected to be caregivers to our parents. Our father had congestive heart failure and our mother had dementia. Caring for them felt like a chance to do what they did for us when we were young.

What defines unexpected caregiving is that the burden is unanticipated and usually unplanned. One moment, your parents are gone and you think you’ve got a good 10 or 15 years before you might have to care for a partner. The next, you find yourself being yanked back into the caregiver role.”

Dr. Brian Goldman of Toronto shares more of his personal story here.

Retirement Q&A

Q: I have a query regarding my mother-in-law for whom I file a tax return annually. She is in her 80s and lives with and supports her son who is 50 years old and a quadriplegic. She has very limited income, and I am wondering if there are any caregiver deductions that I have not discovered, which would apply to her.

We asked Stefanie Ricchio, CPA, Founder & CEO of SRBC Inc., Disability Advocate and CPA Canada financial literacy volunteer, to answer this one:

The most common caregiver credits that would apply in this situation are the Canada caregiver credit (CCC) and the Disability Tax Credit (T2201).

The CCC is a non-refundable tax credit that may be available as she supports a dependent with a physical impairment.

To claim the CCC, one or more of the following individuals must depend on you for support because of a physical or mental impairment:

1. The person is your (or your spouse’s or common-law partner’s) child or grandchild
2. The person is your (or your spouse’s or common-law partner’s) parent, grandparent, brother, sister, uncle, aunt, niece, or nephew (if they resided in Canada at any time in the year)

The individual is considered to depend on you for support if they rely on you to regularly and consistently provide them with some or all of the basic necessities of life, such as food, shelter and clothing.

In addition to this, the 50-year-old son should have already qualified for the T2201 which, if they do not have any taxable income, should be transferred to the caregiver to claim on their personal income tax return. Finally, CPA Canada also features financial literacy sessions and webinars on many topics, including Disabilities: Accessing your benefits, a webinar airing on March 8 from 12:30 – 1:30 p.m.

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.