Tag: baby boomers

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BABY BOOMERS CHARACTERISTICS: BABY BOOMERS DIVIDED ON WHETHER OR NOT TO DOWNSIZE

baby boomers characteristicsBaby Boomers characteristics: Introduction

There are now some new Baby Boomers characteristics. Baby Boomers are now between the ages of 54 and 72. Their new characteristics are now defined by definitely not being a one-size-fits-all group. The broad range in their ages and stages has divided them on whether or not to downsize.

Baby Boomers characteristics: The issues

Baby Boomers are healthier and working longer than previous generations; as a result, they’re not ready to sell their homes and downsize or move into retirement facilities. Others may not want to sell and downsize because of the hot housing market. And there’s a significant generational change that is preventing Baby Boomers from downsizing – their kids haven’t moved out.

Baby Boomers characteristics: Some stats

Statistics Canada reports that just over 33% of young adults, aged 20 to 34, lived with their parents in 2016. In Ontario, the number was higher – 42.1%.

According to a survey by Royal LePage:

  • 59% of Baby Boomers are renovating rather than moving
  • 52% of Baby Boomers say they won’t be downsizing
  • 18% of Baby Boomers said they didn’t expect their children to leave home before the age of 30
  • 9% of Baby Boomers said they didn’t expect their children to leave before 35
  • In Ontario, 50% of Baby Boomers would help their children buy a home
  • 44% of Baby Boomers would be willing to contribute up to 25% of the cost of their child’s home

Baby Boomers characteristics: Baby Boomers not downsizing

Although economists expected Baby Boomers to downsize in large numbers, that just isn’t happening. With the relatively new phenomena of adult children living at home, Baby Boomers are making the decision to renovate instead of move.

Downsizing is increasingly shifting to their 80s when they can no longer care for their homes. Although it’s a generous thought to help your children buy a house, Baby Boomers really need to consider whether or not that makes good financial sense for them or can potentially jeopardize their retirement. In addition, helping your children purchase a house that they can’t afford may do more harm than good.

Baby Boomers characteristics: Some Baby Boomers need a financial plan

If you’re in a financial quandary because you’ve helped your adult children purchase a house, or if they now find themselves with a house they can’t afford, seek professional help immediately. Ira Smith Trustee & Receiver Inc. is a full-service practice serving people just like you throughout the Greater Toronto Area (GTA) who need a plan for Starting Over, Starting Now. Give us a call today. We can give you peace of mind and set you on a path to debt free living.

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WHY AREN’T BABY BOOMERS IN CANADA RETIRING?

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Baby Boomers in Canada: Introduction

Baby Boomers in Canada are not retiring like the generations before them. As we discussed in a recent blog, there are many good reasons to keep working beyond age 65. Although Baby Boomers are the generation that has already reached aged retirement age or are fast approaching it (Baby Boomers are born from 1946 – 1965), many of them are not financially able to retire.

Baby Boomers in Canada: Franklin Templeton Investments Canada study

According to a study conducted for Franklin Templeton Investments Canada:

Baby Boomers in Canada: Canada Pension Plan (CPP)

There is good news for Baby Boomers relying on government pensions. According to the Government of Canada, up until 2019, the CPP retirement pension replaces one-quarter of your average work earnings. This average is based on your work earnings, up to a maximum earnings limit each year. Other sources of income—such as the Old Age Security program, workplace pensions, and private savings—make up the rest of your retirement income.

Beginning in 2019, the CPP will begin to grow to replace one-third of your average work earnings. The maximum limit used to determine your average work earnings will also gradually increase by 14% by 2025.

As a result, pension amounts will increase by more than 33%. Your pension will increase based on how much and for how long you contribute to the enhanced CPP. You will get the full increase if you contribute to the enhanced CPP for 40 years.

The enhancement also applies to the CPP post-retirement benefit. If you are receiving the CPP (or QPP) retirement pension and you continue to work and make CPP contributions in 2019 or later, your post-retirement benefits will be larger.

Baby Boomers in Canada: Many just want to work

In addition to the financial benefits, many Canadians prefer to keep working beyond the retirement age. Work provides a sense of accomplishment, a social environment, keeps the mind sharp and the body active.

Baby Boomers in Canada: Are you a Baby Boomer who’s still paying off debt?

However, if you’re one of the Baby Boomers who’s still deep in debt, you need professional help now. Although your situation may feel hopeless, there are solutions to every problem with immediate action and the right plan.

Ira Smith Trustee & Receiver Inc. has helped many people just like you throughout the GTA. We can help you get back on your feet and give you back peace of mind. Give us a call today and Starting Over, Starting Now you can put your struggles behind you.

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FINANCIAL GOALS FOR MILLENNIALS: STOPPED DUE TO BABY BOOMERS?

financial goals for millennials

Financial goals for millennials: Introduction

Today’s Brandon’s Blog discusses the notion that financial goals for millennials are being hurt by baby boomers. Not only are we living longer; we’re living better. The expression “65 is the new 55” seems to quite accurately describe the changes in our workforce.

Financial goals for millennials: Baby boomers are working longer

Thanks to no mandatory retirement in Ontario, Baby Boomers can work well past 65. According to 2016 census figures, 20% of Canadians are working, either full or part-time, paid or unpaid, past 65. The number of post-retirement workers has doubled since 1995. Unfortunately for millennials who are blaming their financial woes on the Baby Boomers, working longer makes good financial sense.

Financial goals for millennials: The academic’s view

Craig Riddell, a UBC professor of economics, says, “One of the principal causes is increased longevity, and people are staying healthy longer. Another important factor is the decline in pension coverage, especially in the private sector of the economy, and a gradual switch from defined benefit plans to defined contribution plans.

There is no incentive to retire early with the Canada Pension Plan (CPP) if you like working. CPP no longer has a specific retirement age, such as 65. Instead, there is a retirement “window” between the ages of 60 and 70. The later you retire, the larger your monthly payment. If you are going to live an average lifetime, you will get the same amount in total. You don’t pay a penalty by retiring later. If you retire at 60, you get the lowest payment”.

Financial goals for millennials: The benefits to working past 65

Although millennials are against the trend, there are many benefits to working past 65. Karen Zeleznik, a financial planner at Libro Credit Union reports that:

  • Canada Pension Plan benefits jump by 42% if you delay taking them until age 70, even more, if you keep contributing
  • Old Age Security payments work on the same principle, but some or all is clawed back for those with high incomes
  • Many private-sector plans also offer fatter pensions if retirement is put off past 65
  • Tax bills increased by a higher tax bracket from “double-dipping” can be reduced with spousal income splitting
  • In the end, it comes down to one thing: How long are you going to live?
  • It’s a question of taxation, lifestyle and life expectation. If you live to be 90, sure, delay it, because you will get more for a longer time. It’s just math

Financial goals for millennials: Working past 65 is a great advantage

Working past 65 is a great advantage for Baby Boomers who have not saved enough money to retire comfortably. As long as they keep working they can enjoy a lifestyle that they’re accustomed to and enjoy. And many, plain and simply, enjoy working.

Although millennials like to blame Baby Boomers for their financial woes, the high cost of living and the astronomical cost of housing are the real culprits, not the lack of jobs. The job market can be challenging whether or not the Baby Boomers are working longer. And the reality is that millennials will likely have to work longer as well, due to the increased life expectancy and disappearance of defined pension plans.

Financial goals for millennials: Are you struggling financially?

If you’re a millennial who’s struggling financially, you need to take action before things become dire. Consult a professional trustee for help with your financial problems. The Ira Smith Team can help you get back on your feet financially and start saving for your retirement so that perhaps you won’t need to work past 65. Give us a call today and Starting Over, Starting Now, you can put your financial woes behind you.

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LEVERAGING THE GEN X RETIREMENT MARKET FROM OVERLOOKED TO OPPORTUNITY: WILL GENXERS BE READY FOR RETIREMENT?

leveraging the gen x retirement market from overlooked to opportunity 0
leveraging the gen x retirement market from overlooked to opportunity

Leveraging the gen x retirement market from overlooked to opportunity: Introduction

There is much written and discussed about retirement as it pertains to seniors and Baby Boomers, but the younger generations have for some reason been omitted from the conversation. They seem to have all the time in the world to prepare for retirement, but is that really the case? Hopefully by the end this Gen X retirement blog, you will see that there is room for leveraging the Gen X retirement market from overlooked to opportunity.

Leveraging the gen x retirement market from overlooked to opportunity: Gen X challenges for retirement saving

Hot on the heels of the Baby Boomers is Generation X or Gen X. The Harvard Center uses the years from 1965 to 1984 to define Gen X. In theory GenXers should be well on their way to preparing for retirement, considering it’s only 10 years until the oldest GenXer turns 65. The Insured Retirement Institute (IRI) recently released the findings from its fourth biennial report on Generation X and how well prepared for retirement they are.

Leveraging the gen x retirement market from overlooked to opportunity: Generation X retirement crisis

  • 60% of GenXers have money saved for retirement. This is down from 65% two years ago
  • 40% of GenXers have no retirement savings – an increase of 5% from the previous study and 66% have not attempted to calculate how much they would need to save to retire
  • 60% of GenXers believe they will have enough money in retirement. They believe they will have enough money to cover their basic expenses. Also,they think they will be able to enjoy travel and leisure activities. This is despite their concerns about adequate savings and expenses. Most have either no savings or comparatively low retirement account balances,
  • Gen Xers working with advisors are better prepared for retirement, and far less concerned about the risk of falling short

Leveraging the gen x retirement market from overlooked to opportunity: Gen X challenges for retirement saving

What are the top 3 retirement risks GenXers are most concerned about?

  1. 66% – changes to Social Security
  2. 64% – high health care costs
  3. 59% – running out of money

Leveraging the gen x retirement market from overlooked to opportunity: An opportunity for everyone

Whether you’re well-prepared or ill-prepared for retirement, the one piece of advice that will serve you all well is to make sure that you don’t drag debt into retirement with you. If you’re struggling with debt, now is the time to seek professional help.

The Ira Smith Team can help free you from debt and get back to saving for retirement Starting Over, Starting Now. Give us a call today and make an appointment for a free, no obligation consultation. We can set you on a path to a worry-free retirement.

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#VIDEO – DEBT INTO RETIREMENT: DO YOU NEED RETIREMENT SOLUTIONS?#

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We hope you enjoyed our video – DEBT INTO RETIREMENT: DO YOU NEED RETIREMENT SOLUTIONS? If you would like a free copy of our eBook “Cost of Claiming Bankruptcy In Canada”, please subscribe, or confirm your existing subscription, to our blog by CLICKING HERE

The trend of debt into retirement

The biggest trend in debt into retirement among baby boomers is having a home mortgage in retirement. Financial advisers warn that this new trend could have serious lifestyle consequences for seniors. We have written on the topic of seniors in debt before:

Have seniors previously taken debt into retirement?

The baby boomers are the first generation carrying a mortgage into retirement; that’s never happened before. Think about it. Our parents typically bought one house they lived in their whole lives. They paid it off and it was a priority to pay off the house.

Today, because of low rates and the wish to use the home as much for financial gain as for shelter, people typically move up two or more times. The previous generation viewed their home as mainly shelter, and looked at paying off the mortgage as forced savings. With the mortgage gone, our parents then continued saving for a “rainy day”. Memories of the great depression were vivid and alive in their parents’ minds, who passed on the behaviour and mentality that saving was important.

Has the world changed causing seniors taking debt into retirement?

Today, the stock market crash of the late 1980’s is but a distant memory, let alone the feeling of depression. The post-World War II growth years, followed by boom and recession times of the 1970’s through the 1990’s, doesn’t really exist anymore. Rather, in our global economy, growth is slower, so a slowdown in the economy is also muted. The need to save as a philosophy has also taken a back seat, and given the price of homes and the size of the related mortgages, savings today in a growing family is also a near impossibility.

Risks from taking debt into retirement

Two of the risks of having debt into retirement are:

  1. Delayed retirement plans as the baby boomers must keep working to have enough income to service and repay that debt.
  2. If you become injured or sick and cannot work, there won’t be the income to service and repay the debt.

Solutions for taking debt into retirement

So, baby boomers much find ways to mitigate the cost of debt into retirement and being able to repay that debt in a reasonable time period. Some of the more common ways are:

  1. Prior to retirement and after spending the large costs of children and family, while you are still experiencing higher earning years, is to shorten the amortization period of mortgages so that more money goes towards principal.
  2. You can increase the frequency of your mortgage and other debt payments from once a month to once every two weeks, thereby reducing principal faster.
  3. Refinance debt with higher interest rates, such as credit card debt, with mortgage or line of credit financing and then use strategies such as the two listed above to repay that debt.
  4. Adjust your budget so that you are not spending more than you earn, and allow the necessary part of your after-tax income pay off your debt.

What to do if you fear taking too much debt into retirement

To have a free checkup on your debt in retirement, and to look at ways of solving it while avoiding bankruptcy, contact Ira Smith Trustee & Receiver Inc. today. Our team of professional trustees can help you manage your financial crisis and get you back on your feet Starting Over, Starting Now.

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GREY DIVORCE: BABY BOOMERS ARE SPLITTING UP

Grey divorce is a growing trend

Some are calling it grey divorce. Baby boomers divorcing after many years of marriage. People think they will be married forever but many times, it isn’t meant to be. People have their families, and increasingly, they then find after decades of marriage that they just can’t relate to each other anymore. Ultimately, they have to accept things are as they are not as they wish them to be.

We have previously written on this topic:

The trend is not stopping

Since 1990 the divorce rate has doubled for couples over age 50 and researchers found after age 40 its often the wife who wants the divorce. People are no longer willing to compromise to live in unhappy circumstances. Longevity is a key factor. We are all living longer, and spending four or more decades with the same person is becoming more difficult.

Nowadays, people in their forties and fifties and sixties feel very youthful and if you’re in a marriage that your needs aren’t being met, we have choices. Financial independence is more prevalent among seniors and baby boomers put an emphasis on individual happiness. Should you live unhappily or as roommates under the same roof?

It can be financially complicated

Financial advisors caution that splitting up later can be complicated. Timing is critically important because people that are in their late fifties or early sixties may have planned for retirement to be right around the corner, and the financial ramifications of your marriage ending in your senior years may substantially alter those plans for both spouses.

According to the Investors Group:

  • 80% of those people who divorced at the age of 50 or older say they will delay retirement because they need to work longer than planned
  • 62% say their post-breakup savings and investments will no longer be adequate to fund their retirement
  • 54% of those who divorced at or past the age of 50 found it difficult to make financial decisions surrounding their splitting up
  • 53% had to adjust their retirement plans
  • 47% will have to scale back on their anticipated retirement lifestyle
  • 26% no longer have enough retirement savings

What should you do if your life is financially complicated?

If you are experiencing financial problems, instead of going deeper into debt and just putting your head in the sand like an ostrich, contact us today. Seek the help from a professional trustee, even if you’re not considering bankruptcy at this stage.

A licensed insolvency trustee will evaluate your situation and help you to arrive at the best possible solution for your problems, whether that solution is a bankruptcy alternative like credit counseling, debt consolidation or a consumer proposal or even bankruptcy. With immediate action and the right plan, the Ira Smith Team can solve your financial problems Starting Over, Starting Now. We’re just a phone call away.

This vlog was inspired by our eBook – PERSONAL BANKRUPTCY CANADA: Not Because You Are A Dummy, Because You Need To Get Your Life Back On Track

 

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MILLENNIALS DEBT; A PLAN FOR ESCAPE

I recently read an article on millmillennials, millennials debt, Gen Y, Boomers, Baby Boomers, bankruptcy alternatives, debt, student loan debt, trustee, bankruptcy, credit, counselling, debt consolidation, consumer proposals, restructuring and turnaroundennials debt that actually referred to Millennials as “The Generation of Debt”. We recently reported on this very serious problem in our blog “Gen Y Trapped: Millennials in Debt”. Pew Research reports that Millennials are more distrustful of people than ever, less likely to belong to a party or religion, more in debt, and say they are unable to marry because they lack a solid economic foundation. In addition Millennials are also the first in the modern era to have higher levels of student loan debt, poverty and unemployment, and lower levels of wealth and personal income than their two immediate predecessor generations (Gen Xers and Boomers) had at the same stage of their life cycles.

I found this millennials debt issue particularly interesting because just a few days ago I had a conversation with a Millennial who said that her friends felt disenfranchised and angry with the Baby Boomers who have enjoyed benefits that they expected and will never have like company defined pension plans and old age security benefits at age 65.

Clearly one of the major issues is that Millennials had expectations but no financial plan and many are now trapped in a debt cycle that they don’t know how to escape. Millennials debt is a problem that needs to be dealt with as soon as possible. And dealing with debt is not a DYI project. If you’re a Millennial facing serious debt issues and an uncertain financial future, contact a professional trustee. Contact Ira Smith Trustee & Receiver Inc. There are many ways to deal with debt as well as bankruptcy which include credit counselling, debt consolidation and consumer proposals.

We’re here to help. We can discuss with you the various bankruptcy alternatives for the restructuring and turnaround of millennials debt and your entire financial life leading to your overall well-being. We can put you back on the path to lead a healthy and productive life so that you can escape the millennials debt trap. Make an appointment with the Ira Smith team today so that Starting Over, Starting Now you can live a happy, productive, debt free life.

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IS BABY BOOMERS DEBT PREVENTING THEM FROM GETTING MARRIED?

IS DEBT PREVENTING BABY BOOMERS FROM GETTING MARRIED?Baby boomers debt is having an effect on baby boomers who wish to get married, but won’t. Shacking up is not exclusively for young people bucking societal traditions. About 33% of Baby Boomers are unmarried today and many are opting to live together instead of getting married, according to a survey done by the National Center for Family and Marriage Research at Bowling Green State University in Ohio. In fact, the number of Baby Boomers living together has more than doubled in 10 years – about 2.75 million people over the age of 50 were cohabiting in the United States in 2010 compared to 1.2 million a decade earlier, according to the research. U.S. Census Bureau data shows adults older than 50 are among the fastest growing segment of unmarried couples in the U.S.

Why are Baby Boomers choosing to cohabitate instead of tying the knot? The most common reason cited is money – debt, benefits, taxes and cash flow are preventing couples from saying I Do. Many Baby Boomers have assumed a heavy debt load as a result of:

Debt has hit the Baby Boomers hard and many are reluctant to enter into a marriage where they may be assuming additional debt as a result of the marriage. Others are reluctant after having suffered financially as a result of grey divorce. There are many reasons that Baby Boomers are in debt and we have explored them in several blogs – Baby Boomers Debt: Reasons Why It Is So High, Baby Boomers Debt Crisis: Waiting For An Inheritance To Bail You Out, and Grey Divorce Can Create Serious Debt For Boomer Retirees.

If you’re experiencing serious debt issues, then you already know that debt doesn’t miraculously disappear on its own. You need professional help and a solid plan for moving forward with your life Starting Over, Starting Now. Don’t let debt prevent you from doing the things that are important to you. Contact Ira Smith Trustee & Receiver Inc. today and take the first step towards living a debt free life.

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BABY BOOMERS DEBT: REASONS WHY IT IS SO HIGH

BABY BOOMERS DEBT: REASONS WHY IT IS SO HIGHThere are various reasons why baby boomers debt is so high. According to the 2011 Canadian Census, 9.6 million persons, or close to 3 Canadians out of 10 (29%), were baby boomers. Baby Boomers, the generation born between 1946 and 1964, face challenges unlike any other generation before them. Sometimes referred to as pre-seniors, the sandwich generation (taking care of children and parents), and the club sandwich generation (taking care of grandchildren, children and parents), many Baby Boomers are finding themselves ill prepared for retirement.

They expected to have their children off their payroll prior to retirement and never anticipated the financial burden of caring for aging parents and sometimes their grandchildren. Their defined pension plans have all but evaporated and they are left with huge financial responsibilities and a diminishing income. And sometimes, life just got in the way due to divorce or illness. These are many reasons why baby boomers debt is so high.

According to a BMO study:

  • Baby Boomers are about $400,000 short of their retirement goals.
  • The average Baby Boomer feels they need about $658,000 to retire on, not including Canada Pension Plan and Old Age Security money they’ll also get coming to them. However, the average amount they have saved so far is about $228,000.
  • 71% Baby Boomers said they plan to work part time in retirement to earn extra income.
  • 44% will sell off their valuable goods, such as antiques or possessions they don’t use.
  • 33% plan to sell their home to help make ends meet.

The Canadian Payroll Association (CPA) came to similar conclusions. Their study showed that the long term financial outlook for many Canadians is troubling because there is a huge gap between how much money people say they will need to retire and how much they are actually saving for retirement. In addition 40% of employed Canadians still are spending all of or more than their net pay and many are living paycheque to paycheque. Many Baby Boomers of retirement age are retiring with alarming levels of debt, or not able to retire because of their baby boomers debt.

If you’re a Baby Boomer with serious baby boomers debt issues, contact Ira Smith Trustee & Receiver Inc. today. Starting Over, Starting Now we will evaluate your situation and offer practical advice so you can clearly see the way to move forward.

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SENIORS IN DEBT: SOLVE IT WITHOUT BANKRUPTCY

SENIORS IN DEBT: SOLVE IT WITHOUT BANKRUPTCYSeniors in debt or baby boomers in debt, remains a hot topic of conversation and that’s no surprise considering the latest findings. Equifax reports that Canadian consumers continued to increase their debt burdens, but seniors in debt, being consumers 65 and older, had the greatest increase since last year.

According to a new CIBC poll, 59% of retired Canadians say they’re carrying debt. And 19% of those say that their debt level has increased over the past year, while 36% report their debt level has stayed the same. Seniors in debt, defined as those Canadians over the age of 65, have the highest insolvency and bankruptcy rates in the country, according to a report by the Vanier Institute for the Family. Among those retired Canadian seniors in debt, a Harris/Decima poll for CIBC found:

  • 37% are juggling two or more debt payments a month
  • 39% are carrying credit card debt
  • 30% have debt on their line of credit
  • 16% are carrying debt on their mortgage, and
  • 14% have loan debt

As this is a really important issue, we devoted several blogs to seniors in debt – What Do The Golden Years Really Look Like?, Why Are The Majority Of Seniors in Debt?, and Should Seniors Try and Pay Off Their Debt Or Declare Bankruptcy? Another option for seniors trying to start over is a consumer proposal.

Should seniors in debt consider a consumer proposal? Consumer proposals are a very good option for seniors in debt who are retired. Since most people in financial trouble don’t have many assets, the most common reason for filing bankruptcy is to prevent a wage garnishment. Since retired seniors with credit card debt, or other debt, don’t have any wages, there are no wages that could be potentially garnished. And, it is very difficult, if not impossible, for a creditor to garnishee a pension. Therefore a consumer proposal may be the right choice for retired seniors in serious financial trouble. You may also hear the question in layman’s terms: should seniors file a debt proposal to gain protection? What is really meant is one of the bankruptcy alternatives, the consumer proposal.

If you are one of the may seniors in debt experiencing serious debt issues, contact a professional trustee as soon as possible. Ira Smith Trustee & Receiver Inc. will evaluate your individual situation and create a solid financial plan for moving forward so that Starting Over, Starting Now you can live a debt free life and enjoy your retirement. Contact us today.

Watch for our next blog when we’ll be discussing the debt issues plaguing baby boomers.

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