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Greg Demuynck retired at the end of last year, aged 64, after working for the same company, the Alberta Motor Association, for just under 38 years.
“People often say, ‘How could you work for the same company for so long?’ But I had 14 different jobs throughout that time, which kept the interest alive,” he says in The Globe’s latest article, Tales from the Golden Age.
It was after suffering a heart attack in 2019 that he started thinking about retirement. “It wasn’t genetic; it was related to stress and diet – things I could have controlled,” he says. The plan was to retire at 62, but then COVID-19 happened.
“Since I couldn’t travel, go to the concert, the cinema or the gym, I postponed my retirement. I was part of the team that implemented my company’s COVID plans, which was a new and exciting challenge, so I stayed,” he says.
But then, after a few years, he grew weary of the relentless pace. Read the full story here, including why Mr. Demuynck thinks it’s healthy for retirees to separate from work once they retire.
Can Russ, 55, and Vicky, 47, retire early and live comfortably?
When Russ’ employer offered him a buyout program a few months ago, it was an offer he was keen to accept. He earned $87,000 a year working in manufacturing.
Russ’ plan is to work part-time for a few years. His wife, Vicky, plans to retire at age 55. Vicky earns $42,000 a year working in healthcare. Both have defined benefit pension plans, but only Vicky’s is indexed to inflation. Russ is 52, Vicky 47.
They have two children, one of whom is still at home and going to university. Among their short-term goals is work on their property in southern Ontario.
Naturally, they wonder if their pensions and savings will allow them to live comfortably for the rest of their lives. They also wonder what is a reasonable replacement rate for employment income in today’s high inflation environment – in short, how much will they need to maintain their lifestyle? Their tentative retirement spending goal is $68,000 per year after tax.
In the latest Financial Facelift column, Matthew Ardrey, financial planner and portfolio manager at TriDelta Financial in Toronto, examines Russ and Vicky’s situation.
What else we read:
David Suzuki retires from The Nature of Things to focus on activism
After 44 years of hosting CBC’s The Nature of Things, the next season will be David Suzuki’s last, CBC reports. But he’s not gone for good: audiences will still hear a lot about the iconic Canadian environmentalist.
“It’s the most important moment of my life,” Suzuki said in an interview with The National on Sunday. “I hate to call it a retreat. I’m just moving on.
Read the full story here
In case you missed it:
How a retired teacher went from the classroom to spending days with a chainsaw
Ken Pockele, 67, retired in June 2009 just before his 54th birthday after working for more than 30 years as a secondary school teacher.
“I had some health issues in the years leading up to my retirement, which made me think more about how I wanted to spend my days,” he says in The Globe’s latest article, Tales from the Golden Age. “It certainly made the decision to retire a lot easier.”
The early years were spent rebuilding the family cottage on Lake Muskoka, making it more livable for longer term enjoyment. Mr Pockele continues to play golf and spend time with his grandson.
“Regarding my age, I don’t see myself at 67; I still think I’m 39. I get a lot of energy from my wife, who is the same age and very active,” he says.
Read the full interview here
ask sixty-five
Question: With interest rates rising so rapidly, guaranteed investment certificates (GICs) are obviously much more attractive than they once were, paying close to 5% in some cases. Should I sell some of my losing stocks and buy GICs? At least I’ll make some money.
We asked Simon Tanner, Senior Financial Advisor at Dynamic Planning Partners at iA Investia Financial Services Inc. in Vancouver to answer this question:
The market declines we have seen so far in 2022 have caused many investors to reconsider their mix of equities and fixed income. The recent spike in interest rates has certainly made high-interest GICs and savings accounts more attractive.
While it’s important to review the asset allocation within your portfolio, be careful not to abandon your investment strategy too quickly. It is much more important to review your overall risk tolerance and investment plan before running into “guaranteed” income products.
For example, if your current investment plan recommends that you hold 70% of your portfolio in stocks to achieve your financial goals, what has really changed? Given the current inflationary pressures, it is likely that your income needs have increased. The higher prices we’ve seen as consumers dwindle are also unlikely anytime soon.
That said, if a GIC paying 4 or 5% produces enough income to meet your short-term financial goals, buying GICs now can be a great option for some of your fixed income needs. However, if you need more yield from your long-term portfolio, now may not be the right time to sell stocks, especially when they are likely down from the start of the year.
Although there is no guarantee that the stock market will rebound, it has always done so in the past, eventually.
Also keep in mind that when you renew your GICs, depending on the term, rates could be lower than they are today if the Bank of Canada backtracks and starts lowering its key rate.
There is also the possibility of paying capital gains tax on the growth generated by the sale of any non-registered assets (i.e. stocks that are not in your RRSP or TFSA). And, if you were to sell non-registered shares at a loss, the only way to reap the benefits of tax-loss selling is to also have capital gains either in the same tax year you sold, either in the future. GIC profits are taxed as regular income, which is not as favorable as profits from capital gains or dividend income.
While it’s hard to watch the value of your portfolio drop, it’s best not to react to short-term market movements. History has shown that over time, having – and sticking to – a diversified and balanced portfolio produces the best long-term results.
Have a question about money or senior lifestyle topics? Email us at [email protected] and we’ll find experts and answer your questions in future newsletters.
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