Tag Archives: Retire Happy

June 5: Best from the blogosphere

This week it’s back to basics with some of our favourite bloggers.

On HowToSaveMoney.ca Heather Clarke shares Budget Home Decorating Ideas. She says you can often make a “knock off” of a pricey designer item and a little bit of spray paint goes a long way. She also reminds us that there are some hidden gems at the dollar store.

Rona Birenbaum, a financial planner at Caring for Clients offers 5 reasons why you should negotiate your severance package. She notes that there may well be more money and protection available to you, but only if you ask. Also, she says the cost of legal advice is tax deductible.

In Jim Yih’s retirement seminars, even participants close to age 65 are often concerned that they have not saved enough for retirement. His Advice for Baby Boomers who are not ready for retirement is to get a plan, revise their retirement date and think about a phased retirement. He also tells readers to focus on their cash flow and consider finding another job if they do not love what they currently do.

Boomer & Echo’s Marie Engen suggests Frugal Summer Fun For Canada’s 150th Birthday. For example, Parks Canada is offering free admission to all national parks, historic sites and marine conservation areas for the entire year. If you haven’t got your Discovery pass yet, you can order one online, or you can pick one up on arrival at any Parks Canada location.

And finally, Tom Drake answers the question What Is the CPP Death Benefit and Who Should Apply? Typically the death benefit is paid to the estate of the deceased, but where he/she does not have an estate, it can go to one of the following three entities:

  1. Whoever paid for the deceased’s funeral expenses. The death benefit is mainly designed to offset funeral expenses, so it makes sense that it will be paid out to the person or institution who covers these costs.
  2. Surviving partner: The spouse or common-law partner left behind by the deceased can also apply for, and receive, the CPP death benefit.
  3. Next of kin: Finally, if the other two circumstances aren’t met, the deceased’s next of kin can apply for the death benefit.


Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Written by Sheryl Smolkin
Sheryl Smolkin LLB., LLM is a retired pension lawyer and President of Sheryl Smolkin & Associates Ltd. For over a decade, she has enjoyed a successful encore career as a freelance writer specializing in retirement, employee benefits and workplace issues. Sheryl and her husband Joel are empty-nesters, residing in Toronto with their cockapoo Rufus.

April 17: Best from the blogosphere

By Sheryl Smolkin

In a guest post for the Financial Independence Hub, Certified Financial Planner Gennaro De Luca writes that based on his experience, men and women approach taxes and investing differently. For example, he says nine times out of 10 it is the woman who takes the bull by the horns to get the family’s taxes done. Women tend to be more involved and are much more apt to ask questions of their accountant or tax preparer about tax credits and government benefits the family may be eligible for.

Robb Engen on Boomer & Echo discusses which accounts to tap first in retirement with Jason Heath,  a fee-only financial planner. Heath says it may make sense for people who retire early to withdraw funds from their RRSPs first and defer CPP and OAS until age 70.

Retire Happy veteran blogger Jim Yih outlines the top 5 new retirement trends and how they will affect your retirement. For example: retirement is not about stopping work; many people are “phasing into retirement.” Furthermore, long term care is an essential component in a retirement plan.

10 simple ways to save money at the gas pump was recently posted by Tom Drake on the Canadian Finance Blog. Who knew that avoiding unnecessary weight in your car; using cruise control on highways and driving under 100 km/hour could save you money?

And Sean Cooper recounts the story of his unexpected $1,300 furnace repair bill in the depths of a Canadian winter. Luckily, he is mortgage-free, so he had the necessary money sitting in his savings account. But his experience shines a spotlight on the importance of saving up an emergency fund in advance.


Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Mar 13: Best from the blogosphere

By Sheryl Smolkin

Well another RRSP season is in the bag, but that doesn’t mean you should put saving for retirement on the back burner for another year. If you haven’t done so already, it’s a great time to review your finances and arrange to have both registered and unregistered savings deducted at source so your nest egg continues to grow even when you are busy doing things that are a lot more fun than financial planning.

This week we feature more money-saving tips from some of our favourite bloggers.

Guest blogging on Retire Happy, Tom Drake reports on 10 financial success stories from 2016 to inspire your new year. One of my favourites is how Jason Heath who blogs at  Objective Financial Partners is raising his children so they place more emphasis on experiences rather than stuff. And Brenda Hiscock from Objective Financial Partners has been energized since she took a month off to complete Yoga teacher training at an ashram in Nassau.

Robb Engen from Boomer & Echo gives his take on the “the latte factor” and how it impacts the savings habits of millennials. He says, “At the risk of offending an entire generation, here’s what’s really going on: If you’re buying coffee every day, or ordering $22 [avocado and feta cheese] toast several times a week, maybe you’re just too lazy to brew your own coffee at home and cook for yourself.”

As you pull together the documentation to file your 2016 income tax return, you may be looking forward to a big tax return. Mark Seed, author of My Own Advisor says, “When it comes to tax planning my advice is: Don’t assume a big fat tax refund every year is good. If you’re always looking forward to the juicy refund it simply means the government kept some of your money and you could have had it working for you instead throughout the year.”

Big Cajun Man Alan Whitton admits to being a bit of a pack rat which creates clutter and can can lead to hoarding. So in this Lent season he is trying something new. For each day of Lent he is going to fill a bag (of any size) with things he no longer uses and donate the contents to charity. Other ideas for Lent are pay with cash for all 40 days or go for at least a one mile walk every day.

And finally, Barry Choi who blogs at Money We Have shares 6 things he bought used (and you should too). They include a three year old Subaru Impreza Hatchback ($18,000 instead of $30,000 new), a re-sale condo (stable maintenance fees and more space) and used video games online for about 25% less.


Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Feb 06: Best from the blogosphere

By Sheryl Smolkin

One issue on our radar this week of concern to many Canadians is the possible change to the deductibility of health and dental care insurance premiums for tax purposes in the upcoming 2017 budget. Currently these premiums are not a taxable benefit if they are paid for by your employer and they are a deductible medical expense for individuals purchasing private plans to supplement provincial medicare benefits.

On December 2, 2016 a National Post article noted that the Federal Liberals are eyeing a tax on private health and dental plans, a move that would take in about $2.9B. Journalist John Ivison reported that proponents of eliminating the credit argue that those with lower incomes but without private health plans are subsidizing those with employee-sponsored coverage. On the other hand, he said there is a strong economic case for encouraging employers to provide health coverage for employees.

Later in the same month, a coalition of health care service providers warned of the potential negative implications of taxing the premiums paid on employer-provided health and dental benefits. Ondina Love, CEO of the Canadian Dental Hygienists Association said, “When benefits were subject to provincial income tax in Quebec in 1993, almost 20% of employers dropped their coverage, including up to 50% of small employers. This loss of coverage can significantly impact the lowest-paid employees who will have trouble paying for drugs, dental and needed health care out of pocket.”

And now a Conference Board of Canada report commissioned by the Canadian Dental Association calculates that millions of Canadians will each pay at least $1,000 more if Ottawa taxes health and dental plans . And according to the National Post, the potential exists for a massive political backlash. The Canadian Dental Association reports that 50,000 protest emails have already been sent to local MPs and Bill Morneau, the finance minister, through its donttaxmyhealthbenefits.ca online petition.

Let’s hope that Prime Minister Trudeau’s comments on February 2nd suggesting that his government doesn’t plan to tax employee health and dental plans as reported in Benefits Canada will put this issue to bed once and for all for the benefit of all Canadians.

In another health-care related story this week, Marie Engen at Boomer and Echo makes The Case For A Universal Canadian Drug Program. She correctly says that prescription drug coverage in Canada varies widely depending on where you live, your health status, your income, and your age. Right now, each province has its own pharmacare program and there is no consistency. A universal prescription drug plan could not only reduce total spending. It would also cover everyone at an affordable price.

Finally, in a post on Retire Happy, Sean Cooper tackles the question  Should You Take a Deferred Pension or the Commuted Value? He says many people go to their investment advisors to seek assistance on deciding what to do with their pension. But there is a clear conflict of interest.  “Your advisor can be a good source of information for deciding which funds to invest the commuted value in should you decide to take it, but at the end of the day the decision should be yours and yours alone,” he concludes.


Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Nov 7: Best from the Blogosphere

By Sheryl Smolkin

Halloween is over, Remembrance Day is this week and the stores are starting to look a lot like Christmas. But keep the end game is sight and don’t be distracted by advertising for the latest hardware or fashions that may blow your budget out of the water.

On Retire Happy, Sarah Milton writes about “How to stick with your financial goals.” She says what makes the difference between success and stalling comes down to three things: knowing what you want; chasing your fears and building a tribe.

Mint’s blog Personal Finance Guide to Setting Goals and Sticking to Them notes that financial planning is all about goals. There are two islands: what you have and what you want. The bridge between the two is your personal finance budget. Getting to where you want to be requires vision, planning and discipline – the vision to know what you want, a plan to get there and the discipline to stick with your plan.

Big Cajun Man, author of the Canadian Personal Finance Blog says We Invest the Way We Vote. In both cases, we make a hurried, uninformed decision after being unduly influenced by people who have their own agenda on why they want you to do it. Typically the decision may even be made at the last-minute, using your “gut” to decide. Let’s hope our US friends make rational decisions when they go to the polls this week!

When Do You Stop Helping Your Adult Children? Marie Engen questions on Boomer & Echo. She answers, “If your adult children are asking for something, whether it’s babysitting services, money, or something else and you need to say no, say it clearly. Don’t hint around that you’re busy or you’ve had a lot of expenses lately.”

And finally, with the dropping temperatures and snow falling already in parts of the country, you may be planning a warm weather get away. Mark Seed at my Own Advisor has some great hints for how to save and splurge on a vacation. He suggests skyscanner and Chris Myden’s suite of sites for flight deals. And I bet you didn’t know you can get great deals on car rentals from Costco’s web site!


Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Oct 3: Best from the blogosphere

By Sheryl Smolkin

The leaves are turning and the weather is changing. As fall visits us briefly before the long cold winter sets in, it’s time to re-visit recent posts from some of our favourite personal finance writers.

On Boomer and Echo, Marie Engen offers 5 Ways To Stretch Your Retirement Dollars. My favourite is to sign up for senior discounts. In Calgary an annual transit pass for seniors is just $95. BC Ferries gives a 50% discount on passenger fares (Monday to Thursday, except holidays). Retailers such as Shoppers Drug Mart have senior discount days. A number of universities and colleges offer free tuition, at least for non-credit courses.

Sara Milton writes on Retire Happy about Financial warning signs: Are you prepared for the worst?. She says before financial disaster hits, there have  usually  been warning signs for some time. Just like on the dashboard of a car, an individual’s financial “check engine” light was lit up like a Christmas tree and, either he/she didn’t notice or  deliberately ignored it in the hope that it would somehow fix itself and switch off.

While investors may be reluctant to sell stocks because the sale will trigger tax inclusions, Pat McKeough reminds us on the Financial Independence Hub thatCapital gains tax is one of the lowest taxes you’ll ever pay. For example, if an investor purchases stock for $1,000 and then sells that stock for $2,000, they have a $1,000 capital gain. Investors pay Canadian capital gains tax on 50% of the capital gain amount. This means that if you earn $1,000 in capital gains, and you are in the highest tax bracket you will pay about $247.65 in Canadian capital gains tax on the $1,000 in gains.

For most young people in college or university student loans are a necessary evil. But they can become a tremendous burden after graduation. How I worked my way through university by Robin Taub on Forward Thinking profiles Corey Barss (age 25) who grew up in Brantford and attended Ryerson University. By saving money while he was in high school and working nearly full-time as a cook and server at the Ryerson campus pub while he was in university, he was able to graduate with only $30,000 in student loans. Even when he got a full-time job he continued work 12 hours/week at the pub in order to become debt free in three years.

And finally, the Globe and Mail’s Rob Carrick writes that one of the most important financial literacy lessons young people can learn is how to deal with banks. In Millennials, banks are not your friends his message to students is that banks aren’t your friend, and neither are they your enemy. They’re companies you do business with and that means you have to have to go in prepared to defend your own interests. He says students should look for ways to bank for nothing, and he gives  important factors to consider when evaluating student bank accounts.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Jul 25: Best from the Blogosphere

By Sheryl Smolkin

There’s lots of good reading in the blogosphere this week if you get tired of skimming romance novels on the beach or binging on your favourite Netflix series after dark. We’ve just started on the series Sherlock  and Spotlight and Trumbo are two great movies we saw from the comfort of our couch.

In other news, financial maven, television personality and blogger par excellence Gayle Vaz-Oxlade has retired at 57. While we will miss her valuable voice and sense of humour, it is encouraging to see has followed her own personal finance advice and can look forward to time for grandchildren and gardening.

Cheques started arriving in mailboxes across the country and Rob Carrick at the Globe and Mail says high-income families have reason not to like the new Canada Child Benefit, but it’s a win for most everyone else. Here’s how much the benefit will give you.

An interesting post on Canadian Budget binder explains How To Become Financially Secure So You Forget It’s Payday. While there is no magic formula, the checklist includes: start using a budget (no surprise); know where your money is going; understand your bills and how interest works; pay your bills on time and earn extra money if you can.

Cait Flanders sums up what she learned as a result of her two-year shopping ban in Two Years Without Shopping: What I Bought, Donated and Learned to Be True. She explains the rules for each year and details the few necessities she did buy. “For two years, I avoided all mindless and impulse spending decisions. But in a two-year period of time, I also learned you are bound to need some stuff – and that’s ok,” she says. “What I learned from tracking all my purchases this year is that there is a huge difference between talking yourself into thinking you need to buy something and actually needing to buy it.”

On the Financial Independence Hub, Kollin Lore says Millennials can learn from Boomers’ reinvention of retirement. Referring to Jonathan Chevreau’s new book Victory Lap, he says many millennials grew up during the recession and were set back earlier in their careers by student debt, so working past age 65 will be as much a necessity for them as for any other generation. Boomers can teach millennials how to stay motivated and take care of themselves in their senior years

And finally, on Retire Happy, Jim Yih asks: What are your family financial values? He and his wife are very open about money with their children but he suggests that because it’s easier to talk constructively about money from a unified front, a family financial value system might be useful. He shares a helpful series of questions that can help you create one under the headings: spending, debt, saving, income and money management.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Jun 20: Best from the Blogosphere

By Sheryl Smolkin

After several weeks of “theme” issues it’s time to check in with some of our favourite bloggers to find out what’s on their mind.

On Boomer and Echo, Marie Engen asks the perennial question RRIF Or Annuity? Which One Is Right For You?  She suggests combining both so an annuity covers your basic retirement expenses together with with your CPP, OAS, and any other pension income you may be receiving to give you a guaranteed income stream for life. This allows your RRIF to provide you with investment growth opportunities and easier access to your money for your more enjoyable lifestyle expenses.

Tax Freedom Day 2016 happened June 7th this year. Retire Happy’s Jim Yih says it’s another reason to celebrate summer. He explains where all of your taxes go because once you realize the severity of tax on your lifestyle, it is your job to investigate legitimate ways to reduce your tax bill. “I’ve often said that good tax planning is the foundation to any financial, investment or estate decision,” Yih concludes.

Bridget Eastgaard lives in Calgary where due to the drop in oil prices the rental market is very soft. On her blog Money After Graduation she shares One Simple Shortcut To Put More Money In Your Budget. Her research revealed a similar unit renting for $250 less in her building plus a half-dozen comparable apartments renting nearby for less. She succeeded in lowering her rent by 20%, saving hundreds of dollar a month that will be redirected to accumulating a down payment on a house.

Sean Cooper thinks Millennials Should Save Their Down Payment and Not Rely on the Bank of Mom and Dad. He says by showing your millennial child tough love, you’re teaching your kids a valuable lesson: not everything in life will be handed to them on a silver platter. Just like you did, he says they should to work for it.You won’t be there to help them forever.

And the Big Cajun Man Alan Whitten reminds readers to keep an eye on their bank account to make sure automatic withdrawals are being processed properly on an ongoing basis. When he checked on his son’s RESP recently, he found that TD Bank mysteriously stopped depositing in November of 2015. There has been a problem ticket opened on this issue, and someone will be getting back to him.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

 

How seniors can unlock home equity

By Sheryl Smolkin

Results of Manulife Bank of Canada’s Debt Survey revealed that nearly one in five homeowners expect to access home equity to supplement their retirement income with 10% of respondents planning to downsize and use the excess equity to provide retirement income.

That got me thinking about what options are available to retirees who want to unlock the value of their home to live on when they stop working.

  1. Sell high, buy low
    Of course, the most obvious alternative is to sell your home in a metropolitan area where real estate prices are high and retire to a smaller, less expensive community. For example, it will cost you a lot more to purchase or rent a house in Saskatoon or Regina than if you retire to Rosetown or Wadena.
  2. Downsize
    If you own a large suburban property with the traditional three or four bedrooms and multiple bathrooms, you may want to downsize and simplify. Again, the amount of equity you can unlock will depend on where you are currently living, where you want to move and how much smaller you are prepared to go.
  3. Rent instead
    Even if you have always owned your own home, you may be ready to let someone else worry about escalating taxes, furnace repairs, mowing the lawn and shoveling snow. Investing the proceeds of sale of your home and renting an apartment or a house can give you freedom from those responsibilities, particularly if you want to be able to just lock the door and take off on short notice for parts unknown.The downside is that you get what you pay for. Quality rental stock is in short supply in many areas and the nicer the apartment or house, the higher the rent. Furthermore, rents will increase over time and you may have to move again when your lease is up. You also will not be able to do structural renovations or decorate a rented property in the same way as your own home.
  4. Become a landlord
    Can your single family home be converted into a multi-unit dwelling? If you live in a desirable area and you do a tasteful renovation, the rental income will quickly pay for itself and leave you with a stream of income to supplement your retirement savings.The HGTV show Income Property typically focuses on young couples trying to get into their first home, but there is no reason why a similar strategy cannot work equally-well for seniors who want to age in place. An extra bonus is that if you need live-in care later in life, the apartment can be reclaimed for the use of a caregiver.
  5. Home equity line of credit
    A home equity line of credit, or HELOC, is a revolving line of credit secured by your home at a much lower interest rate than a traditional line of credit. The operation of a HELOC is discussed on ratehub.ca. In Canada, your HELOC cannot exceed 65% of your home’s value. However, it’s also important to remember that your outstanding mortgage loan balance + your HELOC cannot equal more than 80% of the value of your home.You must pay at least the interest owing every month and you can also make extra payments of principle at your discretion. We have a HELOC which came in very handy several times when family members bought and sold property and needed funds to finance a purchase before the sale of their previous homes had closed.
  6. Reverse mortgage
    A reverse mortgage is a home loan that provides cash payments based on home equity. Homeowners normally defer payment of the loan until they die, sell, or move out of the home. CHIP is the only Canadian financial institution that currently offers reverse mortgages. The Pros and Cons of a Reverse Mortgage are discussed in detail in an excellent guest blog by Tricia French on Retire Happy. Reverse mortgages allow clients over 55 to access up to 50% of their home’s value. Payments from a reverse mortgage are tax-free income, so your income-tested benefits such as OAS and GIS will not be affected.You can repay the loan at any time and the amount you owe can never exceed the value of your property. You and your beneficiaries also will not be responsible for any shortfall if interest rates increase and housing values drop.Nevertheless, interest will quickly grow on the amount you have borrowed and start up fees can be thousands of dollars. A reverse mortgage can quickly erode the money you have available when you eventually sell and therefore the size of the estate you can eventually leave to your children.
  7. Sell ‘n Stay
    I recently learned about a new concept called Sell ‘n Stay where seniors can sell their home to an investor and lease it back for 10 years or even for life. Unlike a reverse mortgage, the homeowner can access 100% of the equity in their home. The concept, developed by Real Estate Agent Saskia Wyngaard, is currently only available in Ontario.Market value of the house is determined by comparing sales of similar homes that have sold recently in the same neighborhood. The house is offered for sale through an exclusive listing without open houses or staging. Exposure is limited to buyers who are interested in purchasing an investment property with an in-place A+ tenant.The new owner pays for taxes, insurance and repairs. The previous owner pays market rent of about 5% of the value of the house, renter’s insurance and utilities. Since 2013 Wyngaard has been involved in 15 such arrangements with lease backs of 10 years.

****************

Whatever method you choose to unlock equity in your home to supplement your retirement, the optimum situation is to pay off your mortgage before you retire. This will give you the most flexibility to plan for life after work without the burden of paying off debt.

Apr 25: Best from the blogosphere

By Sheryl Smolkin

I can never get too excited about the make and model of the car I drive. All I expect it to do is to reliably get me from A to B and cost as little as possible to run. But there has been a lot of press about the pros and cons of electric cars lately, including the latest luxury Tesla.

If owning a Tesla is on your bucket list, you may be interested in a blog from the self-proclaimed tightwad Mr. Money Mustache describing his 1400 miles of non-driving in a Tesla with a friend who recently acquired one for over $75,000 USD. He says the autopilot actually works, and the company has lined U.S. interstates and major cities with high-speed electric charging stations fueled with free solar electricity available 24 hours a day.

However for the rest of us, the more realistic option when we are looking for a family car is to purchase or lease a new or used vehicle from a car dealer in our community. Automobiles – Buying and Selling, an interesting post from Saskatchewan’s Public Legal Association discusses the pros and cons of these alternatives and your legal rights and responsibilities in each situation to help you make the decision that is best for you.

If a used car is in your future, take a look at What You Need to Know Before Buying a Used Car. When it comes to inspecting a car you are interested in, TrueCar.Advisor says be a “DIY detective.” For example, he suggests bringing along a little fridge magnet and placing it all over the car (lower door, front fender, etc). If there is any plastic body filler present, the magnet won’t stay in place, indicating the vehicle has been in an accident. If you want a more in-depth list of possible DIY Detective skills, visit the DMV guide.

Andrew Wendler acknowledges on caranddriver.com that vehicle listings on Craigslist are always free of oversight and may include half-truths and incomplete vehicle histories. However, this classified advertisements website can be a highly effective tool for locating the car of your dreams, so he provides 10 Tips for a Successful Car-Buying Experience on Craigslist that should help you separate fact from fiction and make a satisfactory purchase.

And finally, in a guest post on the Canadian Finance Blog, Retire Happy’s Jim Yih warns readers Don’t Fall for This Amazon Payments Car Scam. Unfortunately there are phishing scams out there that make you think you’re paying through services like Amazon Payments or PayPal, but you’re really sending your funds to a fake site and are unlikely to ever see that money again. He recounts how he almost got taken in by an Amazon Payments scam when he was looking for a used car a few years ago and includes screen shots, illustrating how you can identify signs of a bogus offer

*****

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.