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Vince Mayne initially retired in 2012 after a career as a chartered professional accountant, the last part of which was working as an IT executive at Hewlett Packard.
“I was ambivalent about retirement at first. A lot of my persona was wrapped up in my job because of the international travel and responsibilities, so I took some contracts at IBM for another couple of years before retiring officially in the fall of 2015,” says Mr. Mayne, 69, of St. Catharines, Ont., in the latest Tales from the Golden Age feature.
He was assured by three different financial advisers that he was financially ready to retire. “The last one told me I would have to live until I was 116 before I would drain my bank account. Even if I did live that long, I’m not sure I want the quality of life that might come with it,” he said.
While Mr. Mayne was financially prepared, he says there was “a huge void in my life” after his wife died of cancer while he was still working. Read the full interview here, including some radical changes Mr. Mayne has made in his life since and how he spends his time in retirement. “I like to describe myself as a ‘sen-ager,’ which is a senior with money and no curfew,” he says.
‘The most discredited financial instrument in history’ makes comeback in Canada
A forgotten financial relic pulled from the pre-Industrial Age has been resurrected to help Canadians saving for retirement. Guardian Capital introduced a line of mutual funds that riff off the concept of the tontine – a financial instrument that more or less vanished a century ago.
The tontine is an investment fund with a dark twist – all participants benefit when one among them dies. In the most extreme version, shareholders commit their money for life, with the entire sum of capital going to the last survivor, making tontines a classic plot device in Agatha Christie novels, murder mystery dinner theatre, and even an episode of The Simpsons.
It was a gentler form of the tontine that gained immense popularity in Europe starting in the 17th century as an annuity that pays a growing dividend as investors die off. About 200 years later, a type of tontine administered by U.S. life insurers flourished, before an embezzlement scandal brought on a regulatory crackdown.
That effectively killed the tontine, at least in North America, bringing an ignominious end to what British financial historian Edward Chancellor once called “perhaps the most discredited financial instrument in history.”
Moshe Milevsky, a York University finance professor, has been arguing for years that tontines deserve a reboot to help fill a gap in the collective retirement security of Canadians. A June poll by Angus Reid found that more than six in 10 Canadians aged 55 and older have delayed or plan to delay their retirements because of a lack of savings.
The average Canadian is retiring at 64 years old, leaving at least two decades’ worth of living expenses to plan for. This has made for a growing longevity problem. As people live longer, it raises the risk of outliving one’s savings. Tim Shufelt reports
Can Carl, 59, afford a $1.25-million rebuild of his waterfront Toronto house without jeopardizing his retirement plan?
For years, Carl has wanted to tear down his dilapidated old house on the suburban Toronto waterfront and build a new, larger one with a couple of rental units for income. Now that he’s retired, he’s wondering whether he can manage it financially. Carl is 59 and single with one adult child.
“I bought my current house in 2008,” Carl writes in an e-mail. “I always intended to renovate/rebuild but I’m only getting to it now in retirement,” he adds. “It’s a property with a pretty spectacular view of the water but it is falling apart.”
Carl says the build price has increased by 37 per cent from the initial design estimate and this has him looking at selling investment assets to help fund the project. The cost is now expected to be $1.25-million.
Most of his $125,000 in gross income comes from his investments, so the projected rental income “is to help diversify my income sources in retirement,” he adds. His cash flow goal is to continue to generate $125,000 a year before tax.
In the latest Financial Facelift column, Ian Calvert, vice-president and principal of HighView Financial Group in Toronto, looks at Carl’s situation.
Ask Sixty Five
Question: I took my Canada Pension Plan (CPP) at age 60, but now regret it. Can I stop taking it and defer until 65 or 70, or is it too late? What are my options?
We asked Jamie Golombek, managing director of tax and estate planning at CIBC Private Wealth in Toronto, to answer this one:
If you’ve started receiving your CPP retirement pension and change your mind, you may be able to stop the payments but only if you act within the first year.
Under the rules, you can cancel your CPP pension up to 12 months after you started receiving it. This request must be done in writing and you’ll have to repay all of the CPP income you’ve received.
Contact Service Canada to cancel your benefits. You can then start receiving the CPP pension at a later date, up until you reach age 70.
Have a question about money or lifestyle topics for seniors? E-mail us at firstname.lastname@example.org and we will find experts and answer your questions in future newsletters.