Steffen, 60, and his wife Jennie, 57, have a household income of about $72,000 a year, none of which is taxable. Jennie earns about $2,000 a year doing part-time work.Amir Salehi/The Globe and Mail
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Steffen had been enjoying a professional lifestyle when a life-changing event left him with a permanent disability. Thankfully, he had long-term disability insurance to replace some of his income with monthly payments through to age 65.
Since then he and his wife, Jennie, have been living mainly on Steffen’s disability insurance and Canada Pension Plan disability benefits. Their household income is about $72,000 a year, none of which is taxable. Jennie earns about $2,000 a year doing part-time work.
Steffen is 60 years old and Jennie is 57. They have a mortgage-free house and about $727,500 in savings. They hope to build their savings to about $1-million.
Their challenge, as Steffen sees it, is to make the most of what they have saved and invested and to keep their taxable income low enough so that they can qualify for the federal guaranteed income supplement (GIS).
Their questions: Steffen still has about $56,000 left in his registered retirement savings plan (RRSP). Should he continue to draw it down before age 65 or hang on to it as long as he can? How can they keep their income low enough to qualify for the GIS after 65? How can they find a financial adviser “of high integrity and competence” who is familiar with the concerns of people with modest income?
In this Financial Facelift, Jason Heath, an advice-only financial planner at Objective Financial Partners Inc. of Markham, Ont., looks at Steffen and Jennie’s situation.
Want a free financial facelift? E-mail finfacelift@gmail.com. Some details may be changed to protect the privacy of the persons profiled.
How a visit to Mexico sparked a career change and a new place to call home
In this series, Reimagining Wealth, we explore the evolving definition of wealth in today’s world.
Ehren Seeland always knew she wasn’t meant to work in the corporate world and spend all day in an office, writes Allison Dunfield. But rather than wait for an opportunity to come along that combined her background in art with her love of travel, she decided to carve her own path and create her own unique career.
Ms. Seeland moved from the prairies to attend the Emily Carr University of Art + Design in Vancouver. There, she forged connections that would eventually enable her to set up a new life in Mexico, where she works with local artisans to help them sell their pieces at a fair price. She also met and married a Mexican man, Erick López Rodriguez, and they run several businesses together.
Here, Ms. Seeland describes her winding journey from Canada to living and working in Oaxaca, Mexico.
A retiree’s guide to the 2024 tax season
Retirement isn’t just a big milestone in your personal and professional life – it’s also a major shift in your tax situation, writes retirement and financial planning reporter Meera Raman.
With tax season in full swing, The Globe and Mail has gathered expert tips – from splitting your pension to turning an RRSP into an RRI – and how to start preparing for next year– to help retirees make the most of their tax returns.
Read the full article here.
Hello, from the retirement planning 101 beat. Allow us to introduce Meera Raman, The Globe’s new retirement and financial planning reporter. Retirement planning can feel overwhelming: too much jargon, not enough real-life context. Meera’s goal is to change that. That means covering not just the numbers, but the lifestyle shifts that come with retirement. Traditional retirement is changing. The idea of working until 65, retiring and never working again is fading. Many people are retiring earlier, then starting businesses, freelancing or even becoming influencers. We want to hear about what your second act is. Tell Meera about it at mraman@globeandmail.com.
In case you missed it
Lost pensions are a real problem. Here’s how to find them – and make sure they’re never lost again
This article is part of a new Globe Advisor series, Pensions Unpacked, exploring how workplace pensions fit into retirement strategies, and the technical details and decisions that come with the plans.
While it might seem unthinkable that someone could forget about their pension plan, it happens a lot, writes Barbara Balfour. Frequent job changes, relocations and a lack of financial guidance can easily lead to misplaced retirement savings.
In Ontario alone, an estimated 200,000 pension plan members have left a staggering $3.6-billion on the table, according to a December report from the National Institute on Ageing.
Helping clients recover these forgotten pensions can boost their retirement security significantly. But how do pensions get lost in the first place, and what can advisers do to help reclaim them?
“People who change jobs frequently often accumulate participation in multiple pension plans,” says Léo Deblois, a pension analyst and business development adviser at SFL Wealth Management in Quebec City.
“The problem arises when those plans take different forms – group RRSPs, defined-contribution plans, defined-benefit plans – and are held by various institutions.”
When employees move on, they often don’t update their contact information with pension plan administrators. Over time, when pension statements stop arriving, the funds simply fall off their radar.
“I’ve had clients who didn’t even realize they had a pension with their current employer,” Mr. Deblois says. “Fast forward 20 or 30 years and it’s no surprise they’ve forgotten about plans from previous jobs.”
A modest account balance can also exacerbate the problem. If an individual has only spent two or three years in a role with a modest salary, they might assume the pension isn’t worth claiming. But compounded growth can turn a seemingly insignificant balance into a substantial asset – if it’s recovered, Mr. Deblois says.
Read the full article here.
Many retirees fear outliving their money. The trade war is making them even warier
Martin Alderwick, 76, has been working since he was 12, caddying at a golf course for just a few dollars an hour. After a lifetime of working and saving diligently, shifting to spending from his nest egg hasn’t come easy.
“I have difficulty changing my habits because I was always a saver,” Mr. Alderwick said, who lives in Guelph, Ont.
Even though Mr. Alderwick and his wife bring in about $7,500 a month, he still hesitates to spend, even on things he enjoys. His financial adviser reassures him he can afford to loosen the purse strings, but the mindset of frugality is hard to shake.
That hesitation is common. Many retirees – even those with healthy nest eggs – struggle to spend, fearing they will outlive their money.
Financial advisers say that they’ve seen how spending in retirement can actually increase happiness, yet a lot of retirees can’t shake the habit of penny-pinching. Some worry they’ll outlive their savings. And now, with the uncertainty of a continuing trade war and rising costs that are expected to come with it, many are even more reluctant to spend, despite having the means to do so.
Read the full article here.
Retirement Q & A
Q: I’m interested in your perspective on High Cash Value Whole Life Insurance, even though I’m now retired at 65. I had believed that I was “too old” to benefit from this type of insurance, now that I can afford the lofty premiums. However, after a little research, it appears that such vehicles offer a whole range of benefits. Is this too good to be true, or am I missing something?
We asked Darren Devine, CFP®, chartered life underwriter (CLU) and financial planner, Sun Life, to answer this one.
A: Great question! High Cash Value Whole Life Insurance can be a useful tool, even in retirement, but it depends on your overall financial goals.
As you mentioned, this tool offers a valuable benefits including:
- Tax-free growth – Cash value and dividends (if participating) grow tax-advantaged.
- Market protection – Your policy isn’t affected by stock market volatility.
- Predictable returns – Guaranteed growth offers stability.
- Fixed premiums – Locked-in rates make future planning easier.
Other factors to consider when determining if this is the right type of insurance for you include:
- Liquidity – Accessing cash may come with restrictions and can reduce the death benefit.
- Opportunity cost – Premiums can be high. Could those funds work harder elsewhere?
- Estate planning fit – Best for wealth transfer, tax efficiency and legacy planning.
- Costs at 65+ – Premiums may be expensive at this stage of life and medical underwriting could be a factor.
Whole life insurance isn’t “too good to be true,” but it’s also not a one-size-fits-all solution. If your priority is estate preservation and tax efficiency, it could be worth exploring. If flexibility and income access are more important, other strategies may serve you better.
Working with a licensed financial planner can help put your goals into perspective and find the right tools to get you there.
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.
Interested in more stories about retirement? Sixty Five aims to inspire Canadians to live their best lives, confidently and securely. Read more here and sign up for our weekly Retirement newsletter.