Tips on becoming a green thumb in your senior years, why retirement for an Ontario man is “the best job I’ve ever had” and tips on converting an RRSP early – Natural Self Esteem

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Gardening is one of the most versatile retirement activities, ranging from growing a few flowers on the balcony to designing ambitious plantscapes for the entire yard.

A survey by researchers from Dalhousie University found that 31 percent of people who started food gardening in 2020 were between the ages of 54 and 72. Enthusiasts cite benefits such as being able to be outdoors, boosting creativity and – especially during the pandemic and with food prices soaring – affordable and healthy eating home-cooked.

Gardeners jump into the hobby for a variety of reasons and are always ready to share tips. In this article, Kathy Kerr speaks to four Canadian green thumbs who share burrowing advice for seniors.

“Retirement is the best job I’ve ever had,” says the frequent traveler

In the latest Tales from the Golden Age feature, 68-year-old David Davidson talks about what it’s like to pull the plug on your career. “Retirement is harder than you might think — when you have a plan,” he says. Mr. Davidson explains how retirement has brought him even closer to his wife, daughters and grandchildren.

The financial details everyone should know before retiring

Before you retire, you should know how much annual income your savings, pensions and benefits will generate over a reasonable lifetime, writes Rob Carrick, the Globe’s personal finance columnist.

“Apparently a lot of people retire without this number,” he writes. In a recent Royal Bank of Canada survey of people aged 50 and older, 83 percent said they have saved less than they need for retirement, and nearly a third believe they will outlive their savings by 10 years or more .

Read the full article here.

Can this single mom afford to retire and sustain annual expenses of $70,000 a year?

Beth is starting a new chapter in her life and of course she has some concerns.

“I’m a newly divorced mom of two,” Beth wrote in an email. “I think I’m financially stable, but to be honest, I’m scared to death of having enough money for retirement now that I’m on my own,” she adds. “I need as much help as I can get.”

Beth is 52 years old and her children are 12 and 13. She has a well-paying executive job and makes about $140,000 a year plus a sizable bonus. She has no pension. The home she now lives in, in a small Ontario town, is worth $1.5 million with a mortgage of about $545,000. Beth has some cash in the bank – her share of the proceeds from the sale of the former family home – and is wondering whether to invest it or pay off her mortgage. Both she and her ex-husband contribute to a family-registered education savings plan for the children’s post-secondary education.

“I’ve lived and worked in many places around the world and when I retire I want to have enough money to travel further and care for and visit my children wherever they end up,” Beth writes. Her retirement spending goal is $70,000 per year. “When can I retire?” Beth asks.

In the latest Financial Facelift article, Nushzaad Malcolm, financial planner at Henderson Partners LLP in Oakville, Ontario, addresses Beth’s situation.

In case you missed it

Why you may need to change your executor as you age

Eventually, most Canadians get to estate planning and get their financial affairs in order—although it often happens later in life than it should. But making a last will really needs to involve more than a quick visit to a law firm to sign a document.

For those who are about to retire or are about to retire, it is important to not only ensure that your will is up to date, but also that you have selected an executor or executors who are up to the challenge, to carry out your last will.

Given that your executor acts as your voice after your death, Canadians need to think a lot more about who they choose for the role, says Darren Coleman, Senior Portfolio Manager, Private Client Group, at Coleman Wealth at Raymond James Ltd. in Toronto.

“People need to change this misconception or the idea that it’s an honor to choose someone to be an executor,” he says. “It’s a sign of tremendous trust and confidence in someone else, but at the same time you’re putting a remarkably heavy burden on someone.”

This burden includes time-consuming administrative tasks such as dealing with banks, insurance companies and government agencies, as well as dealing with the deceased’s family members who may or may not be beneficiaries of the estate. Paul Brent reports.

Should you move closer to your children when you retire?

Some retirees no longer need to live close to work and are faced with a big decision: move closer to their children and grandchildren or go in a completely different direction.

John Hamblin, 75, sees the move he and his wife Peggy made from Halifax last fall near their daughter and granddaughters in Saint John, NB, as “a benefit and a joy.”

When his daughter and her partner are too busy to pick up their 12- and 14-year-old kids after school, the Hamblins can get the job done. They play cribbage and card games. Even when the Hamblins are at their Arizona vacation home, there are regular video calls with their daughter and granddaughters.

The Hamblins had lived in Halifax for 20 years. Her new home in Rothsay, a suburb of Saint John, is a four-hour drive from Halifax. So if they want to visit old friends, they can still do so, says Mr Hamblin.

Statistics Canada shows that nearly 18,500 Canadians age 65 and older moved between provinces in 2020-21. Add in those moving within their home province and that’s a lot of older adults moving.

Some don’t get closer to their children, as Kathy Kerr reports

Ask sixty-five

Question: My wife and I retired a few years ago and will wait until age 70 to receive the Canada Pension Plan (CPP) and Old Age Insurance (OAS). We now live on combined institutional pensions at $21,720 per year and withdraw a total of $60,000 annually from the Registered Retirement Savings Plan (RRSP).

Question 1: Is there a tax benefit of withdrawing from an RRSP over a LIRA, or does it matter?

Question 2: We will convert both RRSPs and LIRAs to income accounts at age 71 as required, but is there a tax benefit if we partially convert these registered monies at this point to carry us through the next few years to old age of 71 years to wear?

We asked Laura De Sousa, a Wealth Advisor at Nicola Wealth in Vancouver, to answer this question:

Answer to Question 1: An important point to clarify is that RRSPs allow the account holder to withdraw year-round; a LIRA not. Assuming you are over 55, you can withdraw funds from the LIRA by converting the account to a Lifetime Income Fund (LIF) or a Blocked Retirement Income Fund (LRIF), which are tax-protected accounts used for withdrawals the cumulative value of a blocked RRSP. The conversion can be partial or complete. This is the only way to access the funds. To answer your question, the taxation of the plans is essentially the same. When funds are withdrawn from an account, the income is taxed in full in the year of withdrawal and a T4RRSP/T4RIF receipt is issued.

Answer to question 2: The income from the plans is taxed the same way.

I see an advantage in converting a subset of accounts to RRIF and LIF: instead of directing your financial institution for the flat rate RRSP withdrawals, you can systematically schedule the payments to be made every month instead of a larger flat rate. Also, RRSP withdrawal may incur administrative deregistration fees where RRIF/LIF should not. This depends on your financial institution.

If you plan to withdraw the entire $60,000 from an RRSP ($30,000 each) in one lump sum, the withholding rate is 30 percent; So you might find that you pay more tax up front at the time of withdrawal and remit it to Canada’s tax authorities only to get a refund at tax time.

It sounds like your average tax rate could be under 30 percent given your annual income needs. Converting the account to an RRIF/LIF gives you the option to set up the monthly recurring withdrawals and depending on the value of the account there may be no withholding at source – if your annual minimum payment is enough to meet your income needs cover.

Of course, please consider this finding with discretion. Everyone’s financial scenario is unique and there may be additional planning that needs to be considered.

Do you have a question about money or lifestyle issues for seniors, or would you like to suggest a story idea for the Sixty Five series? Please email us at sixtyfive@globeandmail.com and we will find experts and answer your questions in future newsletters.