A snapshot of aging Canadians
Aging, we believe, is less about ‘lost youth’ and more about a new stage of life. Certainly, your state of health is a major contributing factor to your experience as an older individual. Assuming you remain relatively well and active, what can 65 and older look like in Canada? And what are some of the key wealth-planning considerations for older Canadians? With individuals generally living longer, one of the most important issues is ensuring your funds last throughout the later part of your life.
Retirement income sources
Consider Mary’s example. A widowed 75-year-old, Mary inherited her late husband’s Registered Retirement Income Fund (RRIF). She now holds assets totalling $3 million, not counting the value of her home. Here is a breakdown of her income: 62% investment income, 18% RRIF, 11% Canada Pension Plan, 9% Defined benefit pension.
Maintaining your lifestyle
Maintaining an active lifestyle and following her passions is important to Mary, an avid theatre-goer and film buff. She is regularly included in family activities with her three children and seven grandchildren, who range in age from 15 to 22. At her monthly gardening club gathering, which includes women and men 65 and older, the discussion often centres around these key topics:
Preserving or growing wealth for the next generation
For example, what is the best way to help grandchildren financially? One option is a trust to help your beneficiaries. This can be established through your Will or during your lifetime (inter vivos). A trust can hold any asset, including cash assets or real property.
Spending habits
While Mary is comfortable, she doesn’t want to overspend and monitors her monthly expenses so that she can spend on things like overseas travel. The challenge for many of advancing age is to keep track, plan ahead and stay informed. Retirees and near-retirees may also be susceptible to particular risks such as financial abuse. Consider your spending habits over a three or four-month period to identify patterns and create a budget.
Working later in life
Many of Mary’s club friends are still in their 60s and some have part-time jobs. According to Statistics Canada, one in five Canadians over the age of 65 reported working in 2015. Finding part-time work in retirement can provide extra income and help you stay engaged and active. Identify your skills, interests and experience that may be valuable to a company on a part-time or consulting basis.
Preserving or growing wealth for the next generation
For example, what is the best way to help grandchildren financially? One option is a trust to help your beneficiaries. This can be established through your Will or during your lifetime (inter vivos). A trust can hold any asset, including cash assets or real property.
Spending habits
While Mary is comfortable, she doesn’t want to overspend and monitors her monthly expenses so that she can spend on things like overseas travel. The challenge for many of advancing age is to keep track, plan ahead and stay informed. Retirees and near-retirees may also be susceptible to particular risks such as financial abuse. Consider your spending habits over a three or four-month period to identify patterns and create a budget.
Working later in life
Many of Mary’s club friends are still in their 60s and some have part-time jobs. According to Statistics Canada, one in five Canadians over the age of 65 reported working in 2015. Finding part-time work in retirement can provide extra income and help you stay engaged and active. Identify your skills, interests and experience that may be valuable to a company on a part-time or consulting basis.
Housing options
Mary continues to live in the home she shared with her late husband and is conscious of the need to downsize eventually. Reluctant to move in with any of her children, Mary envisages moving into a retirement home with an independent-living component and the option to receive additional support, particularly if she develops any serious health issues. According to Statistics Canada’s 2011 Census of Population:
- 92% of aging Canadians live in private households as a couple, alone or with others
- 8% live in collective dwellings. This increases to 31% for people 85+.
- Nursing homes, long term care facilities, seniors’ residences
East coast living
Based in Toronto, Mary is representative of aging Canadians who mostly live in eastern Canada versus western and northern Canada. According to Statistics Canada, “from 2011 to 2016, the Atlantic provinces saw the biggest decline in the proportion of people aged 15 to 64, and in general, the largest increase in the proportion of seniors. In 2016, almost one in five people in the Atlantic provinces was 65 years of age and older – the highest proportion in the country.”
Travel adventures
For now, Mary would like to enjoy a few more major long-haul trips that allow her to spend as much time as possible overseas. Like many of her fellow Boomers, she is less budget conscious than younger travellers, not influenced by social media and is decisive about her travel plans. According to a 2017 report by Expedia MediaSolutions, Baby Boomers, compared to other generations, travel the most (28 days a year) and nearly half have already decided on a destination when they plan to take a trip. They are more likely to take an international getaway than stay within their own borders and are also quite adventurous once they get to their destination. Boomers are less likely than other generations to stay with family or friends and are more likely to stay in a resort.
While Boomers are not travelling as frequently as other generations, they make up for it in trip length.
You are never too old to set another goal or dream a new dream.
~ C.S. LewisOur priority is to help you put the right pieces in place.
Talk with a Richardson Wealth Investment Advisor to discuss and plan for your later years.
