How a retiree trained herself to live off CPP and OAS prior to leaving her last job. Plus, why early RRIF withdrawals don’t work for most retirees

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“I retired at age 69 after years of working at different retail stores in Toronto, starting at the bottom and progressing into various managerial roles,” says Zarina Decambra of Lindsay, Ont., in the latest Tales From the Golden Age. Her last job was as an executive assistant at CultureLink, a settlement agency for newcomers to Canada, adds the 79-year-old, where she worked for 17 years.

“When I was 67, I took three months off to travel by myself around Europe and Asia – I went to 25 cities in 10 countries. When I got back, I didn’t want to return to work. I never had that feeling after returning from vacation before.”

For Decambra, it was a sign that it was time to retire. “I resigned the first week I got back, but my boss asked me to stay on for another year to help train my replacement, which I did.”

Decambra felt that she was prepared financially for retirement. “I have always managed my money well, even while working in retail and raising three kids with the help of my ex-husband,” she says. At her last job, she earned about $55,000 a year. Decambra also contributed to the company’s retirement plan and her registered retirement saving plan. She now has a financial adviser who manages her investments.

“I’ve always understood the value of saving. A year before I retired, I started cutting back my expenses and trained myself to live off only my Canada Pension Plan (CPP) and Old Age Security (OAS) benefits.”

Read the full article here.

Are you a Canadian retiree interested in discussing what life is like now that you’ve stopped working? The Globe is looking for people to participate in its Tales from the Golden Age feature, which examines the personal and financial realities of retirement. If you’re interested in being interviewed for this feature, and agree to use your full name and have a photo taken, please e-mail us at: goldenageglobe@gmail.com Please include a few details about how you saved and invested for retirement and what your life is like now.

Can Maurice and Fiona afford to spend their winters in Palm Springs?

After three years of wintering in their small-town B.C. home because of the COVID-19 pandemic, Maurice and Fiona are eager to return to their favourite vacation spot next winter: Palm Springs, Calif.

Fiona is age 80, Maurice 82. They have a mortgage-free house, some savings and investments and children, grandchildren and great grandchildren. Their combined income from investments, government benefits and a small company pension is about $68,000 a year.

“We would like to go south three months each winter as long as health and finances permit,” Maurice writes in an e-mail. The trip would cost at least $15,000, of which $5,000 would be travel insurance. “Fiona is in excellent health and I’m in decent health for a man of my age,” Maurice writes. “My dad lived to 97, so the genes are favourable.”

They plan to live in their house for at least another five years and then move to an independent retirement residence. “There are several places in our area where prices for a couple range from $50,000 to $60,000 a year, including all meals,” Maurice adds.

One of their goals is to preserve capital. They wonder if their investment portfolio – 25 per cent cash and 75 per cent stocks – is appropriate. They are spending about $61,000 a year after tax.

“How long can we afford to go to Palm Springs?”

In the latest Financial Facelift, Tom Feigs, a certified financial planner at Money Coaches Canada in Calgary, takes a look at Alan’s situation.

Want a free financial facelift? E-mail finfacelift@gmail.com.

Which country’s citizens enjoy the longest retirement period?

In the latest Charting Retirement article, Frederick Vettese, former chief actuary at Morneau Shepell and author of Retirement Income for Life, looks at the pros and cons of starting your CPP pension at early retirement here.

In case you missed it

Why early RRIF withdrawals don’t work for most retirees

To withdraw early or maintain the status quo? That’s the question some retirees face when making a decision on their registered retirement income funds (RRIFs), writes Globe Advisor reporter Deanne Gage.

Some advisors recommend withdrawing from RRIFs earlier than the mandated age of 71 to increase a client’s income and tax efficiency. But Doug Chandler, Canadian retirement research actuary at the Society of Actuaries in Calgary, says Gage, warns the situation is more nuanced and says, in many circumstances, accelerating RRIF withdrawals isn’t a great idea.

The FP Canada Research Foundation funded Mr. Chandler’s research assessing the value of early RRIF withdrawals. He spoke recently with Globe Advisor to discuss his findings.

Read the full article here.

How universal long-term care services could help ease financial burden

Canadian households spent $9.4-billion of their own money on long-term care (LTC) services in 2019, according to a new report from the National Institute on Ageing (NIA) – and that was before the health care system was hit by the pandemic and rising costs.

An aging baby boomer population and longer life expectancies are expected to lead to greater demand for these services and put more pressure on the system, adding to the financial burden for Canadians seeking private LTC services, notes the report from the Toronto Metropolitan University think tank-focused issues affecting Canada’s aging population.

The NIA proposes a solution: a publicly funded LTC insurance program. It says the program could be funded through specific contributions from Canadians’ wages, similar to the Canada Pension Plan, or through general taxation, as with Canada’s national health insurance program. In return, the NIA says Canadians would have “a greater sense of security” in meeting unpredictable future LTC needs.

The Globe spoke with Dr. Sinha recently about the NIA report and how it could help ease the financial burden on Canadians later in life.

Read the full article here.

Retirement Q&A

Q: I understand some lawyers will act as professional executors and charge a little less than the trust companies. How would you compare their service as executor to that of a trust company?

We asked Andrew Higdon, a lawyer with KPMG Law LLP’s Estates and Trusts practice in Ottawa.

Like a trust company, some lawyers will accept an appointment to act as a client’s executor. There are several factors to consider when evaluating whether appointing your lawyer is right for you.

Both a lawyer and a trust company are arms-length alternatives to appointing a family member or a friend as an executor. This can be an advantage, particularly where you don’t wish to burden a relation with a complex or lengthy estate.

Comparing the suitability of a lawyer and a trust company may depend on several factors – including fees. Some lawyers (though by no means all) have useful expertise in estate administration or corporate law, which can reduce delays and the risk of errors or inefficiencies. Trust companies often have in-house resources such as lawyers and tax professionals who enable them to administer complex estates more easily than a lawyer practising on their own. However, a lawyer from a well-resourced firm or with a broad professional network may have equivalent resources. Bear in mind that if your estate is uncomplicated, these additional resources may not be needed.

Your long-standing lawyer may also be uniquely familiar with your family’s dynamics, assets and personalities, allowing them to act with insight and sensitivity. If they also prepared your will and other estate planning, they may also be more familiar with your wishes.

Lawyers may agree to administer estates with elevated litigation risk or other complications that make them unattractive to a trust company. As well, a lawyer may accept an estate with a net worth below the minimum value cut-offs that trust companies may use, perhaps charging an hourly rate to administer the estate rather than a fee based on a percentage of the estate value.

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.

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