June 2: BEST FROM THE BLOGOSPHERE

June 2, 2025

What to do if your savings have dried up – and you are still going strong

A recent article from MoneySense explains that even if we outlive our savings, we still have some options.

Not everyone, the article begins, is able to save for retirement, or has some sort of pension program at their workplace. The article cites the example of Cheryl, 60, “a single parent with low income” who suffered a workplace injury and is now receiving modest Ontario Disability Support Program benefits.

Or Shannon, who along with her husband works full time, but is struggling to make ends meet, the article continues. “We have good educations and somewhat good jobs,” she tells MoneySense, “but at the end of the month, there’s not much left over.

“Canadians today are living longer than previous generations, and not everyone has the financial means to support themselves throughout retirement. According to the latest data from Statistics Canada, six per cent of Canadian seniors lived below the poverty line in 2022. And at present, nearly eight per cent of food bank clients are seniors,” MoneySense reports.

So what should you do if you have run out, or are running out, of savings? MoneySense has some suggestions.

Be sure, the publication advises, to file your income taxes on time. “If you’re a low-income earner who isn’t filing their taxes, you’re missing out on all sorts of benefits. It’s one of the worst things you can do financially,” certified financial planner Jackie Porter tells MoneySense.

For example, low-income seniors who file their taxes on time are “automatically enrolled for the Guaranteed Income Supplement starting at age 65 and receive tax-free payments on a monthly basis.”

Next is budgeting – do you have one and are you sticking to it, the publication asks.

“Take a good look at your budget and cash flow,” MoneySense suggests. “Answer this question: does your income (including Canada Pension Plan and Old Age Security and other government payments) cover your fixed and variable expenses? Expenses can include rent or mortgage payments, insurance premiums, car payments, groceries, entertainment, etc. If your income falls short of your expenditures, establish a budgeting goal based on the gap that you’ve identified,” the publication continues.

OK – be sure you are signed up for any government programs and are spending less than what you bring in. What other thoughts does MoneySense have?

Low-income homeowners might want to consider a reverse mortgage, the publication reports.

“Here’s how it works: If you’re 55 or older, you may be able to borrow up to 55 per cent of your home’s appraised value. These funds are tax-free and can be received in a lump sum or monthly installments. Interest is charged on all borrowed funds, but the balance isn’t typically due until the home is sold or until the last surviving homeowner dies (whether that’s you, your partner or a property co-owner),” MoneySense advises.

You may, the publication continues, be able to access some of the cash value in your term or whole life insurance policy. “Cashing out the policy means you’ll have some money but no life insurance, while borrowing against the cash value means you’ll get a loan while retaining the policy,” MoneySense notes, adding that those considering this option should first seek professional advice.

There’s a way to take some or all of your savings to produce an income stream that won’t run out – converting savings to a lifetime annuity payment. This is an option for retiring members of the Saskatchewan Pension Plan. With an SPP annuity, you’ll receive a monthly payment for life, and depending on the option you choose, your surviving spouse or beneficiary may be eligible for benefits when you pass away.

Check out SPP today!

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MoneySense

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