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Doreen Smith plays the ukulele at her Kelowna, B.C. home.Aaron Hemens/The Globe and Mail

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Doreen Smith, 69, of Kelowna, B.C., retired in 2016 at the age of 62 after working for almost two decades as a certified financial planner. In her experience, shared in the latest instalment of Tales from the Golden Age, she came across many people who died years earlier than they expected. “Nobody knows how long they’ll live or be healthy,” says Smith, “and I wanted to retire while I was still active and able to enjoy life. I ran my own business and only took a week or two of vacation a year.” So, she looked forward to spending more time with her husband. He retired two years earlier after selling his machine-shop business.

“My decision to retire wasn’t a quick one,” says Smith. “I thought about it for years, including what we would do, where we would go and how we would fill the days, weeks and years. I worked about 50 hours a week, and I wrote a weekly column for the local paper, so I knew it would be a lot of time to fill.” Unlike your finances, planning personal time isn’t something others can do for you, she adds.

“To me, it’s important to be social, especially in retirement. It often means stepping out of your comfort zone to meet new people and learn new skills,” Smith says. In 2021, when the pandemic limited socializing, she taught herself to play the ukulele. “I had always wanted to try it. A year later, after being unable to find a local ukulele group, a Kelowna seniors’ centre asked me to start one and lead it.” She was initially nervous and scared, especially after only a year of self-taught playing, but decided to go for it. “Our weekly ukulele group still exists today. It’s a handful of seniors sharing a love of music.”

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: [email protected] Please include a few details about how you saved and invested for retirement and what your life is like now.

Can Lorna, 65, afford to travel now and still have money left in her later years?

Lorna describes herself as a retired single woman, age 65, living in Toronto, in this Financial Facelift. She has one child who is 22 and away at university.

After a career in health care, Lorna has a defined benefit pension of $76,020 a year, indexed to inflation, which makes up the bulk of her retirement income. She is also collecting Old Age Security benefits.

Short term, she wants to buy an electric car and spend more time and money travelling. She plans to live in her condo as long as possible.

She wonders which of her savings and investment accounts she should draw down first. “Will my money last until age 95, assuming long-term care might be needed for five years?” Lorna asks in an e-mail. “What might be left when I die?” She also asks if she can afford to help her daughter financially.

Lorna’s after-tax spending goal is $68,000 a year.

In this Financial Facelift, Anita Bruinsma, a chartered financial analyst with Clarity Personal Finance in Toronto, looks at Lorna’s situation.

Want a free financial facelift? E-mail [email protected].

How much does it help to postpone retirement a couple of years?

In the latest Charting Retirement article, Fred Vettese, former chief actuary at Morneau Shepell and author of Retirement Income for Life, weighs the benefits of choosing to put off retirement by a year or two here.

In case you missed it

Buyer’s guide: Travel insurance for snowbirds

Retirement may be the time in your life where you can make those travel dreams come true, but it also comes around the age where travel insurance gets seriously more complicated, writes Report on Business reporter Salmaan Farooqui.

That’s because at 60 years and above, insurers will generally start to ask much more detailed questions about your health history to better calculate the risk they’re taking on.

“Answering these questions is where the problems begin. You have to be careful,” says Martin Firestone, president of Toronto-based insurance brokerage Travel Secure.

He says the information you need to provide isn’t always straightforward, and answering any questions incorrectly can jeopardize your coverage. If you’re travelling in the U.S., that could mean tens or hundreds of thousands of dollars in medical bills.

Also not covered in this article is trip cancellation and trip interruption insurance, which are particularly important as climate change continues to create destructive weather events such as the wildfires in Hawaii. This form of insurance can have all sorts of different conditions, so it’s important to know your policy’s limitations and keep all receipts if things go wrong.

If you’re planning to become a snowbird, picking the right insurance plan will be critical to your peace of mind.

We list some top tips from insurance experts here.

The top surprises – good and bad – new retirees face

In some cases, says finance writer Dale Jackson, new retirees risk running short on cash by having too much of their retirement savings in rental properties, says one advisor.

More than 90 per cent of Canadians with a written financial plan say they feel financially prepared for retirement, according to the recent 2023 Fidelity Retirement Report. Yet, Jackson notes, only 85 per cent report being emotionally prepared for it.

The findings suggest all the planning in the world cannot prepare retirees for the mental shock of retirement.

“What they have in their heads might not relate to reality,” says David Driscoll, president and chief executive officer at Liberty International Investment Management in Toronto.

Based on his 25 years advising clients, he says the dramatic shift from working and saving to spending and – whatever – leaves many reeling.

“The first year is one of transition. It’s usually the most difficult because you have to find activities that give your life purpose,” he says. “You can only golf so much.”

Globe Advisor spoke with three veteran financial advisors about the top surprises – good and bad – that many new retirees face when they embark on this new phase of life.

Read the full article here.

Retirement Q&A

Q: My husband and I are planning to downsize within a year. Should we consider purchasing a condo or adult community townhouse or sell the family home and rent? We still want to be able to leave something for our kids.

We asked Andrea Milo, a partner with private enterprise tax and family office at KPMG Canada.

The decision of whether to buy or rent a home when looking to downsize and preserve wealth for your children depends on both financial and non-financial factors. On the financial side, the value of your home will likely play a big role. If the family home is sold and a portion of the proceeds are used to purchase a smaller home (or condominium), the remaining proceeds could be invested. If the invested funds generate a sufficient return needed to fund living expenses (e.g. property taxes, utilities, maintenance, condo fees), that capital could be preserved and passed on to your children. Similarly, if renting, the amount of capital that could be saved and passed onto your heirs would be more substantial (assuming sufficient return on the invested proceeds to fund the cost of rent and other living expenses).

Families may also consider gifting cash during their lifetime, as opposed to upon death. Since there is no gift tax in Canada, a taxpayer could consider gifting cash proceeds from the sale of the family home to their children. This would defer the tax that would otherwise arise on death and avoid probate fees, versus a scenario where parents hold the sale proceeds in an investment portfolio at the time of their passing. The result would be more assets in the hands of beneficiaries, as opposed to taxes paid.

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