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Is Ignorance Really Bliss?

Some folks seem to be living in an Ignorance is Bliss cloud sourrounded by a fog of Doubts and Fears concerning their futures!

 When people ask me what I do, I sometimes tell them about the writing, speaking, and courses I do about Retirement Readiness.  Then I hear their lines like "I am going to die in harness"  or "Freedom 85 for me" or "I am only 40 something or 50 something and am too young to think about that."  Really?  Do they have a crystal ball or a cracker jack financial planner looking after their money or a solid defined benefit pension or all three?

Look!  If you do not do the planning, who will?  Crap happens like lay-offs, divorces or separations, injury or illness, economic meltdowns, caregiving responsibilities and, any of these, can mean the  Plan A needs to be modified to Plan B.

So many folks I talk to do not have a handle on Plan A never mind Plan B! They are just swimming like mad and keeping their noses just above the water.  They are not looking for the shore at all it seems.  This swim can get tiring after awhile.  Building something to stand on could be a good idea.

So many turn their financies over to someone else and do not question.  They let the bank, their significant other, their accountant, or their investor do the heavy lifting.  Some have one foot on the accelerator making as much money as possible while their partner is spending on credit like a drunken sailor!  So many marriage partners do not communicate or plan together.  It might be too stressful!  And ending up broke and in debt would not be?

Get it together folks!  Educate yourselves and take responsibility for the future that is being created with every decision made!


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Splitting Up Means Splitting Assets

The so-called Grey Divorce rate is up and climbing.  It has gone from 4% in the early 90's to 12% and that does not include those who have separated and not divorced but lead separate lives.  In the middle of the emotional muddle and the individuation process comes the splitting of assets and reassessing retirement.

Now what?  What happens with housing?  Often times the wife wants to keep the house but really cannot afford to do so.  What happens to pensions and retirement benefits?  Are there survivorship considerations? Health care? Estate planning issues? Lawyers' fees?  Is there enough left over to sustain two households into the future?  Does someone have to go back to work or keep working longer?  How does one maintain a civil and respectful relationship with a former spouse?

Counsellors, doctors and therapists can provide professional help with shock, grief, anger, and identity issues that may flow from the break-up.  Lawyers can deal with the legal issues including splitting of assets and the actual divorce.  Some financial advisors are certified divorce specialists who can look at the whole picture with the couple or one member thereof.  Now there is a book by one such advisor and a  lawyer, Eva Sachs and Marion Korn, called WHEN HARRY LEFT SALLY: FINDING YOUR WAY THROUGH GREY DIVORCE. This is a must read for anyone considering a later in life divorce.

It presents the issues in a clear, organized manner with a very accessible style of writing and format.  The considerations are there with supporting examples and stories of couples as case studies.  Lists of questions and end of chapter summaries keep it to the point and easy to follow.  It is up to date and relevant to anyone considering a later in life split up.  Reading and working through this book may save a great deal of time, worry, and wonder about the process as well as cost for the professionals involved.


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On June first of this year, my mother passed away.  That led to a series of decisions about the funeral, her belongings and what to do with them, her estate, bill paying and final taxes, but also how to deal with the grief at the same time as these decisions.  It was a bit overwhelming to deal with the emotions of the loss and the need to make clear and correct choices as one of the executors. 

Many women have these serious decisions to make after the loss of a loved one, a health crisis of their own or of someone close to them, or a job loss or change, a failing business or marriage.  Dealing with all these serious issues at a time of loss and grief is tricky at best.

This September and October a group of professionsal women are doing workshops to help women prepare for making the best choices no matter what the situation.  Intelligent Women Informed Now (IWIN) is the name of the seminar series.  I starts with FINANCIAL SECURITY with two women in the financial field on Saturday, September 14th from 9-12 at Riverside Glen in Guelph.

Two weeks later on September 28, a lawyer and realtor talk about HOME AND ESTATE.  In October on the 5th and 19th, the topics are HEALTH AND LIFESTYLE  and then TRAVEL AND LEISURE.  These topics are what I have heard the women in my courses say they want to know about.  We do not know what we don't know and this series of no more that 20-25 women per session gives us a chance to learn what we need to know.  Straight talk about some basics.

The cost is $40.00 for all four sessions or $15.00 per session.  Call 519 846 8207 to sign up or use this website to do so.  Let other women know and invite them to join us on those dates.  If you want a similar series in your area, please contact me at that number.

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Getting the Best Advice

Should I take the CPP early?

How much is the OAS anyway?

How much should I be saving?

Where can I get unbiased advice?

All of these questions are common to those about to retire or who are planning ahead.

CPP and OAS 

For the CPP question take a look at Jim Yih's blog at and search for the information on that issue.  It is a question of doing the math, making your best guess on your own longevity, and knowing what your values and needs are.  Do you save for higher health care costs when you are over 75 or do you spend it when you will enjoy it most in your Go Go stage of retirement?  I like the Have Fun While you can Philosophy but that is me.  

The same site will give you the dollar figures for the OAS and information about the clawback levels of income.  When you make over about 69,500 for this year anyway, you start to lose the OAS income to the taxman.  Tax reduction is a key method of preserving your money for you and your family.  Find out about that too.

Save Your Money!

That was my grandfather's way of saying goodbye.  I heard it many, many times.  Did I do it?  Not to the extent that he did that is for sure.  The average Canadian saves about $1.80 for every $100.00 earned.  Not enough, is it?  If you do not have an employer pension, you may want to make that $10.00 per $100.00 starting now and more if you are getting close to retirement.  I paid between 7 and 9 percent of my income into a pension and am I ever grateful that I did!  I also put money aside into RRSPs before retirement,  a non-registered plan and now my TFSA.  Yes, I am still saving in retirement.  It helps deal with unexpected costs like the time my car blew up and the travel I still enjoy.  I just got back from 10 days in Paris and 6 days in the Loire Valley.  Thank you pay yourself first plan!

Do Your Homework!

So many good sources of information are out there and most are free.  

Some of the banks like RBC, BMO, TD and others have websites with lots of good information available.  Insurance companies do as well.  Sun Life has a cafe that Boomers could visit and learn some.  These are sources of information designed to educate as well as sell products.  some have retirement calculators but they are not crystal balls.  They do not know the rate of inflation, how long you will live, or return on investment, for example.  A tool, yes, but a limited one. 

There are lots of good books, including mine, It's Your Time, David Chilton's latest, Gail Vaz-Oxlade's books, and Gordon Pape's  latest.  There are also a plethora of websites and blogs dealing with retirement issues.  Jim Yih's is a favourite, Balance Junkie, Blonde on a Budget, Boomer and Echo, Gail Vaz-Oxlade's blog and site, and the list goes on.  The Canadian Centre for Policy Alternatives has various reports like Working After 65 that are informative. Follow the links and find what you need to know.

Do not just hand over the running of your financial life to others.  You are the one most engaged with your money and your future and so learn what you can on your own.  You will then know what you want and need, where to look for the services you require, and know the questions to ask when you get there.

Spend less that you earn, know your cash flow situation, save effectively, and live modestly, so that you can sleep at night and retire with a wide range of options.  

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Suddenly Single and Retirement

I talked to a woman who had lost her husband to a sudden heart attack two years before they had planned to retire.  They had made their downsizing and travel plans and were excited at the prospect of retiring and hitting the road for a year's trip around North America.  That trip never happened and those plans died with him.

She was left to deal with his estate, his clothes and stuff, his last tax statement, the memories of him everywhere at home, and his absence from her life.  Her best friend and partner was gone.  At least he had left a clear will, some insurance money, a partial pension, an almost paid for modest house and only a few debts.  She needed to stay working longer than she had planned to make up for being on a single income, but had nothing else planned as she was not used to being single and planning by herself.

This is not an unusual story.  I hear variations of this often.  The average age of a woman becoming a widow in Canada is 56 and I have not found out the age for widowers.  The grief and loss can be overwhelming emotionally and yet decisions and choices need to be made.  Some days are bad ones and when a good one comes along, the person may reach out to others or get busy on the long to do list.

About 30% of Canadian seniors are single because of the death of a spouse.  Not only does the survivor have to deal with the grieving process but emptying the deceased's effects,  making financial decisions that may have profound lasting effects, redefine themselves as a single person, deal with the grief of other family members and friends, and replan a future as a widow or widower.

Service Canada can help with information about the Death Benefit, Survivor's Pension, and the Guaranteed Income Supplement if that is appropriate to the income level of the survivor.  Bereavement and self-help groups can provide support and links to resources in the community.  Websites like can help reach out as well.  Counsellors and therapists may provide help as needed in this often painful transition.  

Sometimes the death is not a sudden one and the partner takes time off work to act as a caregiver.  This can have devasting effects on their own pensions, career path, as well as their emotional and physical health.  A trusted group of advisors can help support the caregiver with legal, financial, and medical resources and advice.  Too often the caregiver is too stressed to seek out this advice or get the help they need.

Play out the What Happens If scenarios to make sure all ducks are in a row if you find yourself in a caregiving or suddenly single situation!

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Going it Alone into Retirement

In these times of silver separation or late in life divorce, couples face a minefield of emotions and decisions at the same time.  Even if the marriage has been going through the motions for awhile, lots of family and personal history, dying dreams, the scope of the changes, and extended family can make this an experience a rough roller coaster ride.  I would suggest that you get as much help with the process as you can from shoulders to cry on and ears to listen to good lawyers and advisors.

Emotions like guilt, anger, resentment, grief, shock, fear, depression, excitement, and even shame can cloud judgement and colour the experience.  Objective and knowledgable guidance can be very reassuring and informative.  One often needs help with negotiations from a lawyer or mediator.  Navigating the legal system can be tricky and foreign to the couple as well.  Valuation of assets can be challenging to do in order to get a clear and up to date financial picture.  Counsellors may help with the emotional pain and the transition to a single person identity.  Lawyers, mediators, counsellors, close friends, divorce  and separation financial analysts, and support groups all have parts to play as advisors and supporters through this transition.

Often in a couple, tasks and areas of expertise are divided. Perhaps she does the monthly purchases and budgeting and he does the investments and taxes, while she does the shopping, decorating, and social planning, he does the cooking, renovating and holiday planning.  Now all aspects need to be understood and taken on by each former partner.  Both need to understand the full financial fallout, take charge of financial management, household management, figure out how to deal with a possible drop in each of their standards of living as assets are sold and divided, and each one fashions a new future alone or with someone new.

Nancy Leek, a Certified Divorce Financial Analyst, puts it this way. 

"My job is to take the time to understand what part of the couple they played, and help them fill in the blanks.  I explain what is going on in very easy to understand terms and educate them.  This is in addition to figuring out how to split assets appropriately during the divorce.  My job also extends out to helping with referrals to put the entire divorce plan into play.  I am able to get a couple to a point of seeing settlement suggestions within a couple weeks, not months.  This helps ease the emotions as a lot of the unknown is gone and there is a lot of positive encouragement that goes on at every meeting to help people avoid getting too overwhelmed by all the changes happening."

Going it alone can be a huge challenge and learning curve.  Find your mentors, supporters, advisors, and friends as you move out of your old life as a partner and spouse into the new life you want to create for yourself.  Careful of those celebratory shopping sprees and trips until you know your situation, careful of doing things you would not like to fess up to later,  be mindful of the effects on and reactions of your children no matter how old they are, as well as those of your neighbours, in-laws and friends.

 Be kind to yourself in the process.  Reach out when you need to and get the help that is available. 

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Retirement and Divorce: Going It Alone


The divorce rate for 55+ age group is up and climbing even in these uncertain economic times.  The kids have moved out, values and attitudes have changed, needs and expectations are no longer met, stresses and strains have taken their toll, another person has come into the picture, or there is the one more shot at happiness wish. Whatever the situation, the fact remains that splitting assets at any age is traumatic but, at the retirement stage, it can really shake up expectations, plans, and realities for retirement.


One household becomes two, expenses then go up, assets may get sold without a thought to tax implications, legal fees need to be paid and extreme emotions can govern major decisions.  It is a minefield of emotions time when the assets get evaluated and the negotiations begin.

Linda Cartier, the president of the Academy of Financial Divorce Specialists, and Gail Belchior of Financial Divorce Solutions answered some of the questions I had about the financial implications of divorce at this stage of life.  I wanted to know what issues were the most contentious and learned that "for men, the most pressing concern is often the division of their pension.  Many are unaware that a pension accumulated during the marriage is a divisible asset.  This comes as a hard truth for many both men and women. A proper valuation is important to be able to determine the appropriate division of assets.  Another element regarding pension division is whether to take a lump sum or take it when the pension owner retires.  There are benefits and drawbacks to either decision."

I have two women friends who were teachers and each had to pay from their pensions at divorce.  One chose to pay a lump sum to her husband who had gone back to university and was just finishing his degree while the other pays a percentage of her pension to her self-employed ex-husband.  Homes were sold in each instance.  One wanted the pain of payment not to stretch out her whole lifetime while the other was advised by her financial planner to go with the lifetime of payments.

"For women, the most pressing concern is future financial security.  Since women are more likely to have a lower income and less pension assets they tend to experience a greater reduction in their standard of living post divorce.  ...for women, the house, often emotionally equates to stability."


A financial divorce consultant can take a look at tax implications, timing of sale of assets, untangle the complex money picture, and, in Gail's words, "educate, demystify the complexity of the family finances and empower couples to face the new family dynamics with the understanding of how the cost of living, tax rules and daily bill paying will impact their lives in order to live in two households with the least pain possible."

She sums up  her role in the picture well by saying, "The process of divorce offers the promise of a new start, but too often this promise is threatened by an unfair or poorly-considered property settlement.  My role is to provide information, develop and point out alternatives that suit my clients' needs, offer objectivity, leave time for sober second thought, and help my clients' professional team come to a decision.  My goal is to enhance the quality of my clients' professional team and help them preserve wealth."

The decisions and agreements made in a divorce settlement can effect the rest of our lives.  Resentment and anger are not good guides for such far reaching consequences.  Regret and second guessing are not what you want to take into your future.

This is the first in a series about going it alone in retirement.  Stay tuned.

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Buying real estate in Florida or Arizona for your Canadian retirement?

Real estate agents have been taking Canadians on jaunts to points south to show them the opportunities in the American market for a few years now.  The subprime mortgage mess has created opportunities for cash- in- hand buyers.  Banks and lawyers in Canada have been learning the ins and outs of these transactions and holding seminars to share their knowledge.  These have been for the most part well attended.  A recent one in Winnipeg had 800 people attend.  Winterpeg, indeed!  As Canadians, we are interested in a deal and a winter escape plan combined.

About 2 million Canadians live in the U.S. as expats.  Many others are seasonal visitors living there from a few weeks to 6 months at a time. One figure that surprised me was that on average, Canadians are buying  million dollar luxury homes in the States at a rate of one per week!  For cash!  They are bringing their Canadian cash from whatever sources and buying in the U.S. so that they have no mortgage there.  That may be because getting a mortgage there has become a paperwork nightmare, a list of extra fees with a 2 per cent foreign national premium added for good measure.  As well, once the term of the mortgage is expired, it is treated not as a renewal but as a whole new mortgage with all the paperwork and fees all over again!

Our banks are happy to help finance a first, second, or vacation home but not necessarily an investment property.  A property management company is important to have if you are not there full time for insurance purposes as well. The Phoenix area and the tri-county areas of Florida are getting used to Canadians as they are investing at a steady rate.  Getting  advice from Canadian financial institutions and real estate lawyers  who understand the American system is crucial.  They know that post-dated cheques south of our borders are all live and can be cashed at any time regardless of the date.  They know the difference between a short sale which can take a long time and an REO or bank owned property for sale.

Other heads up include carrying costs and the local environs.  These can include items like property taxes that can vary state to state and county to county, utilities costs like air conditioning or power washing, Home Owners' Association costs, HOA fees or strata fees as we call them, home insurance that can skyrocket after a hurricane, and property management costs.  Potential purchasers need to do their due diligence when it comes to researching the area.  Call the local police to find out about crime rates, research the amenities available as well as the neighbourhood including the ratio of renters to buyers.  You may wish to rent in the area prior to signing on the dotted line.

Death and taxes also come into the picture.  What are the taxes now?  What are the laws there if someone passes away or there is incapacity?  Probate fees, U.S. Estate tax, capital gain tax, and sales tax or hotel tax on rental income require a clear examination.  How you hold the property is also a choice between a trust, a corporation, or a partnership or not.  No one wants to be in a position of paying lots of taxes no matter how nice the pool is.  No one wants to leave a spouse paying high fees while the property is frozen in probate.  A Canadian power of attorney is not recognized by American laws, for example. It may feel like home but the rules are very different.

Do your homework.  Get your financing in Canada.  Talk to a lawyer who knows the ins and outs of the American real estate situation but speaks Canadian.

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Us vs. Them Really?

Human Resources Minister Finley gave a speech in Toronto recently about the need for pension reform in light of the Pig in the Python Baby Boomer generation heading into their golden years.  She wanted to protect youth from the huge tax burden this will cost, she claimed.  She mentioned nothing about her pension should she win another election which would be $92,057 taken directly from the public purse.  She was fanning the flames of intergenerational resentment, a divide and conquer tactic.

Prime Minister Harper suggests that Old Age Security move from age 65 to age 67 in 2025.  Most of the Baby Boomers will get the pension at 65 then.  Those born from 1960 on will not but that is the tail end of the Baby Boomer generation.  The largest cohort was born in 1959 and will turn 65 in 2024 and will then get the OAS at that time.

This means that those who will have to wait are just into their 50's and everyone younger.  The Baby Boomers are not the target of reductions then but the next generation who are paying for the Boomers' health care costs in the most expensive time, the last ten years of life. Specifically, the real costs of health care jump during the months before death.  In 2025, the front end of the Boomers will be in their late 70's and the back end their early 60's.

Younger folks need not jump to resentment of Baby Boomers as suggested by politicians as this is an excuse to rob them of two years of pension, not the majority of the Boomers who will collect before 2025!  Do the math folks!  Surely putting resources and policy changes around health care and hospice care merit some consideration, along with  support for home care, adult day care, dementia facilities, and grannie-nanny programs.  

We need to stick together and use our heads to deal with the demographic realities that lie ahead!  Our kids are the ones who need those pensions given the economic environment they are struggling through now.

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Retirement's Harsh New Realities by Gordon Pape


David Chilton calls it his finest work yet and I agree.  It is also timely for the Boomer generation thinking about retirement in this market and political climate.  He structures the book presenting nine harsh realities and then countering with nine solutions. He then adds his conclusions, his answers to common questions, as well as some practical resources that people can access.

These realities include the demographic reality of an aging population, and the decline of pensions in general and defined benefit pensions in particular.  We may want to watch how Germany, Italy, and Japan deal with their aging populations where almost one in five is 65 years of age or older.  We have seen riots in the streets of Europe over changing the retirement age.  What happens in Canada if the age goes up for receiving OAS?  We already have higher penalties for taking CPP early.

Other realities deal with our own lack of preparation now that we are on our own.  Our savings rates are not good, investment options are not promising, debt levels are scary, and the tax system is out to get as much as possible from us.  He explains that in 2010 savings rates were 4.2 per cent per household while the debt-to-income ratio had grown to 150 per cent with average family debt at $100,000!  No wonder many are working longer and expect to continue to do so!

He also points out something that I have encountered often.  Denial!  The Forever Young syndrome I call it.  Few Canadians have read a retirement planning book, taken a course, researched retirement, or discussed it with their families.  If you want a good place to start, check out with Jim Yih, read my book, IT'S YOUR TIME, or pick up a copy of Gordon Pape's RETIREMENT'S HARSH NEW REALITIES!

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The more I talk to folks on their way to retirement, the more I hear about their fear, cynicism, and even despair in some cases.  

"I do not see anywhere to hide at the moment."

"My financial planner says hang in but all I see is minus signs and trouble ahead."

"We will be fine if my health holds and my job does not disappear on me."

From financial planners, I hear that they are very busy putting out fires and reassuring clients and counselling them not to concretize their losses by selling low.

"It is as if everyone is holding their breath until this black cloud passes."

"Once Europe gets its act together, we can get back to business.  My clients are just frozen right now."

No one has a crystal ball and lots of us have seen the trader from England on you tube talking about the glories of another recession as he could make lots of money on that.  We see an amoral system shaking with the post Reagan deregulation free market convulsions that have rocked the banking systems especially in the US and Europe.  Where can capital go safely?  Whose hands do we trust with this capital? Is this slow down the new normal for the next decade?

No wonder I am hearing that retirement is being delayed up to 5 years by those who do not have defined benefit pensions.  No wonder I am hearing pension envy grumblings.  No wonder I am hearing single women saying they would consider a same sex marriage just for the income splitting.  OK that one was a joke.... I think.

We are in a crippling crisis of confidence for many reasons.  Life goes on.  Markets and merry-go-rounds do what they do.  Lots of folks out there are waiting to exhale or find a crystal ball with good news.

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A Failure to Plan...

Those who have a financial plan and get financial advice do better that those who do not have a plan. 

Women who are between 45 and 64 need a plan as they will likely live longer than any male significant other and thus will be on their own at some point if they are not at present.  About 71% of these women do not have a plan at all.  Only about 40% have a private pension and so the rest of that 60% must rely on their own savings and investments to supplement public pensions.

If single, you must rely on yourself.  If you are divorced, you must rely on yourself.  If your spouse dies, you must rely on yourself.  It pays then to increase your financial literacy and to work with someone you know and trust.  Many women run their own household's finances, but do not get too involved in estate planning, tax planning, pensions and survivorship payments, or retirement planning.

One way to start is to read Gail Vaz-Oxlade's books like Never Too Late or David Chilton's The Wealthy Barber Returns  as they are both easy reads with down to earth advice.  As is my book, It's Your Time.   Moneysense magazine is another good source including their website.  You may want to join an Investment Club with the goal to learn, not get rich quick.  Beware any such claims!

In 2009, only 24% of tax filers contributed to an RRSP.  I have no stats on Tax Free Savings Accounts as yet. About 10% of those 65 and over are still employed.  We are living in a time of real or at least threatened recession where jobs and savings can disappear over night.  Few of us can count on working over the long haul given the economy and possible health complications.

That means getting a plan together NOW!  Saving $5.48 per day becomes $2000.20 in a year without interest.  It's a start.

A man is not a plan.  A house is not a plan.  Your children will likely pay you back as much as you paid your parents and thus are not a plan.

Make a start and get a plan!

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Another four letter word...Risk!

"I never thought I would be divorced with half the assets at 60!"

"That heart attack changed my life and plans so profoundly."

"I never thought the kids, now adults, would both still be at home as this point."

"Our savings got devastated in the market mess of 2008."

"Downsizing has a whole new meaning now that it has happened to me."

Life is a minefield of risk which is why we have insurance, save for a rainy day, rely on family and friends,  don't smoke, drive carefully...Right?  Apparently not!  I have talked to hundreds of retirees and preretirees and have heard lots of stories about how circumstances or bad judgement have interrupted or sabotaged plans for retirement.  Some were retired prematurely by layoffs or closings or poor health.  Some lost savings or pensions or parts of pensions along with those jobs.  Some experienced divorces, ill health, the pressures of the sandwich generation, or market losses.  All of these can feel like the slippery slope of the snake in the game of Snakes and Ladders.

The risks to retirees can include can live too long and at great health care costs.  Retirement can be for 30-35 years, a long time on a mostly fixed income.  The CPP and OAS are pegged to inflation as are defined benefit pensions.  Others may not be however.

Another risk is inflation which, like a mad Mario, eats away at assets.  Inflation rates are relatively low now but even at 2% that can add up to 40% or more after 20-25 years.

Asset allocation can be a problem if all your eggs are in one basket and a fox finds that basket.  Diversification acts to spread the risk but sometimes there is just no where to hide.  A trusted advisor comes into the picture here.

The withdrawal rate rule of thumb is 4-5% per year.  You need a big pot to keep money for the long run and be careful not to empty it too quickly.

The wild card again is health.  Health care can be costly and so look after your health as your best asset!

Watch for the ladders and beware of the snakes! 

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Takin' Care of Business

"I do not feel like I've retired.  I'm just so busy now."

"I do not like the term sounds useless and, well, old."

These are the kind of comments I hear from lots of Boomers who are just not comfortable with the idea of retirement.  They still have images of gold watches and rocking chairs, and feelings of being out of the action.  When the retirement age of 65 was chosen in 1951, the average life expectancy was 68 but that has increased to 80 and going higher.  

Some people will be retired for 30+ years but the average number of years between retirement age and current life expectancy is 15 years.  What do you want to do for those years?  Boredom sends 39 per cent of retirees back to work, and financial need has more in job search mode or hanging in at work.  Julia Moulden's new book, Ripe:Rich, Rewarding work after 50, helps you map out the next stage in terms of career.

 This year, with almost 350,000 Baby Boomers turning 65, the approaches to retirement, including not retiring, are vastly different that those of 1951.  The average age range of entrepreneurs is 55-64 as retirees start their own wide range of businesses.  Some are starting their new careers as artists, entertainers, inventors, consultants, renovators, or operators of bed and breakfasts.  The possibilities are limited only by one's imagination.

Canadians who retire now are not necessarily out of debt.  In fact, about one third of them are in debt to the tune of $60,000 on average.  They travel, have mortgages, take courses, dine out, patronize arts and culture options, give to charities, run 5K and 10K races, and have active social lives.  They may also be helping their aging relatives or their adult children.  This may require extra income from that new business or continued employment.  In fact, a 2005 Stats Can survey, showed the 65+ crowd ranked paid work as their most satisfying activity. Whether the reason is financial, boredom, or personal satisfaction, boomers are making a difference in the work world and starting many types of businesses changing the concept of retirement.

After the financial crisis of 2008, savings and investments took a hit and the middle class retiree especially got thrown for a planning- to- retire loop.  About 25% of our American neighbours between 65-75 are still in the workforce and this may very well increase dramatically in the coming decade.  We all need to make our worlds go around one way or another and continuing at work or starting a business are ways of doing that.

Just because you are retired does not mean that you have stopped the world and gotten off.  It keeps right on turning and you keep right on learning and, quite possibly, earning!

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A Crystal Ball or a Road Map?

When I  talk to people about retirement I often hear, "I likely won't retire anyway."

 "I can't think about that now...too busy."  

" I can not imagine what it will be like for me."

" I have enough on my plate now."

The money piece seems to be the biggest focus for those who take the time to plan.  Others are swamped by RRSPs, TFSAs, annuities, CPP, OAS, and, with so much to think about, they are frozen.  Planning is looking into the future and making it as predictable as possible with as many choices as possible.  Find those who can help you sort out the future you want for yourself.

Your retirement can be what you make of it and what you choose it to be.  The old stereotypes of retirement have fallen by the wayside.  Each retirement is personal.  You may need some direction and structure as a framework to hold your dreams.  Money is a part of that but so are your relationships, your health, your sense of yourself, and the things you love to do, accomplish, learn, or experience.

Take a look at where you are now.  Decide what you want to take with you into retirement and what you do not:  the alarm clock and the stress levels, for example.  Figure out what you would like to add and start making it happen now.

 Just do not bury your head in the sand and hope that it will all work out.  A little planning now goes a long way toward the future you want.  Get the picture?

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Money Talks

Prior to retirement, the main focus of concern is often money and income flow. Most retirement planning books and courses centre on finances. How much will I need? Where will it come from?

According to a McMaster university study done in 2009, the average senior couple spends about $52,000 per year. How far that goes depends on whether debts are paid off, whether there is still a mortgage if you own your home, what kind of lifestyle you live, and what your budget looks like.

The average single person spends about $40,000 per year.

A no frills retirement is possible with public pensions that are indexed to inflation. Each Canada Pension Plan differs according to how many years of contribution and the amount of contribution. This can be checked on the Service Canada website.

The Old Age Security is about $525.00 per month. The Guaranteed Income Supplement can bump up income a bit as well. However, it must be applied for and many people do not access it.

Income can be supplemented with part time employment, cashing in investments, creating an annuity or “pensionizing” your investments through various means, or selling assets or renting out part of your home.
Private pensions also provide extra income but only about 40% of Canadians have these. Some are defined benefit while others are defined contribution.

Some retirees have disability payments, insurance support, or inheritances to supplement income.
The deluxe retirement with a second residence, two or more newer vehicles, regular vacations, club memberships, fine dining, charity donations, generous gifts to children and grandchildren requires a combination of income sources.

Keep in mind that retirement has stages: go-go, slow-go, and no-go. Costs for personal care rise dramatically after the age of 75 or at the onset of an illness or disability.

The early honeymoon period, usually 6 months to 2 years, can be expensive if you choose to make dreams come true or celebrate your freedom with travel, shopping, renovating, or starting a business or pursuing hobbies.
Figure out your monthly costs, your sources of income, and get a team of trusted advisors as you educate yourself about this next stage of your life.

Money is not everything but it does settle the nerves as an Irish saying goes.

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Freedom 85

The average Canadian who makes less than $50,000 expects to work to age 68 or 70. Market dips, company insolvency, lack of savings, health problems, and declining private pensions put many Canadians in a financial squeeze that delays or changes their retirement options.

A defined benefit pension and a company insolvency can leave employees and pensioners out in the cold. Stelco, Nortel, and General Motors created pension nightmares and new realities for many.

Some stay in the work force for financial reasons and others because that is what they enjoy doing with their time. For many retirees, reemployment is a popular choice. Moonlighting becomes them. As Hans Selye, the stress guru, said, “Retirement is fine as long as it doesn’t interfere with your work.”

Many retirees choose to continue or start their own businesses or become self-employed consultants. These “seniorpreneurs” make up for a record high 25% of the self employed. They are more than 30% of the total workforce over the age of 55.

Some companies are offering phased retirement plans for people who want to ease out of working, keep their hand in, but still take long vacations or keep a more flexible schedule. Estimates are that in less than 4 years, those over 55 will make up 20% of the workforce in Canada.

Not everyone chooses the timing of retirement. Not everyone has the choice to stay in the workforce. Some are forced into early retirement by downsizing, health problems, company relocations or shut downs or the fickle finger of fate. Those 45-59 who are laid off have a 25% chance of retiring within 5 years and those 60 or over have a 70% chance of retiring. Some of these lose pension income whether it is the private pension or a reduction in CPP income.

These circumstances can create not only a financial mess but an emotional one as well. One recent forced retiree put it this way, “No, I am not enjoying my retirement. It is more like a divorce, an unexpected one at that. After 31 years in a business I helped to build, they got rid of me. I am still mad as hell and hurt too. I thought they were my buddies. I was not ready to be pushed out to pasture!”

Timing is everything. Think about your timing for retirement.

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