Tag: saving for retirement

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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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Brandon Blog Post

CANADIAN HOUSEHOLD DEBT RATIO HITS HIGH TORONTO STAR REPORTS: WHAT’S THE NUMBER 1 FINANCIAL PRIORITY FOR CANADIANS IN 2018?

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canadian household debt ratio hits high toronto star reports

Canadian household debt ratio hits high Toronto Star reports: Introduction

In a recent blog we spoke about what Canadians feared the most financially. This week we’re going to discuss the number one financial priority for Canadians in 2018. We explain the issues because of the Canadian household debt ratio hits high Toronto Star reports, specifically in a December 14, 2017 article.

Canadian household debt ratio hits high Toronto Star reports: What Statistics Canada reported

Just when we think that Canadian household debt levels have gone as high as they possibly can, we reached yet another new high in the third quarter of 2017. According to Statistics Canada:

  • The ratio of household credit-market debt to disposable income (the key gauge for measuring Canadians’ debt loads) rose to 171.1% in the third quarter, up from 170.1% in the second quarter
  • Total household credit-market debt (mortgages, consumer credit such as credit cards and lines of credit and non-mortgage loans) increased 1.4% in the third quarter to $2.11-trillion, which is also a record

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Canadian household debt ratio hits high Toronto Star reports: What the CIBC opinion poll reports as Canadians’ financial priorities for 2018

CIBC did their annual opinion poll in December asking Canadians what their priorities were for 2018:

  1. 25% say that paying down debt is their top financial priority. This is the eighth straight year that paying down debt has landed in the number 1 position
  2. 15% say that they’re focused on keeping up with bills
  3. 13% say their top priority is growing wealth
  4. 7% say that saving for retirement is most important to them
  5. 8% want to save for a vacation
  6. 6% say a house or a renovation is their top financial goal
  7. 4% want to buy a vehicle or make another large purchase
  8. 4% want build up an emergency fund

Canadian household debt ratio hits high Toronto Star reports: What Canadians have said and what they really have done

Although when surveyed Canadians have said for the last eight years they are focused on paying down debt, only 16% in this year’s poll said that they were able to meet their goal. Knowing that you have to pay down debt and actually doing it are two very different things. In addition to not paying down debt, 26% of respondents said they took on new debt this year to pay the bills and to cover unexpected expenses.

Canadian household debt ratio hits high Toronto Star reports: We can help you keep your 2018 financial resolutions

Setting your priorities or making resolutions without a solid financial plan to back it up is going to keep you in debt. Instead of listing paying down debt as your top priority again next year, contact a trustee for professional help. We can help you solve your financial problems with immediate action and the right plan. With just one phone call to Ira Smith Trustee & Receiver Inc. you can take the first step to paying down debt and having financial peace of mind. Give us a call today and you can be Starting Over, Starting Now.

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Brandon Blog Post

SAVING FOR RETIREMENT IN CANADA: THERE’S NO EQUALITY OF THE SEXES

saving for retirmentSaving for retirement in Canada: Introduction

Ladies, I’m sorry to say that there’s no equality of the sexes when it comes to saving for retirement in Canada. The truth is that women need to save more for retirement than men. That may sound like an unfair, sexist comment but it’s a financial reality and here are four reasons why.

Saving for retirement in Canada: Why do women need to save more than men for retirement?

  1. Women outlive men on average by four years according to Statistics Canada. This means that women have to fund an extra four years of retirement Typically the older we get the more healthcare costs we incur including the high costs of some prescription drugs and in some cases, assisted living.
  2. Women earn less than men. As shocking as it seems, a woman working full-time in Canada makes 73.5 cents for every dollar a man makes, according to updated Statistics Canada income data produced for The Globe and Mail in 2016.
  3. In addition they report that these numbers are even lower for Indigenous and women of colour. On a global scale, the gender pay gap in Canada is more than twice the global average, according to research firm Catalyst Canadam. The Canadian pay gap is on average $8,000, while globally it’s at $4,000.
  4. Many women take time out of the workforce. Women on average work 28 years in their lifetime as compared to men who work 38, according to Diane Garnick, Chief Income Strategist at TIAA. Typically it’s women who take time out to raise kids or take care of elderly parents. These 10 fewer years of income really impacts retirement savings and pensions..
  5. Women get less in pensions than men. Lower earnings coupled with less time in the workforce many times equates with less pension.3bestaward

Saving for retirement in Canada: Unfortunately your dream of retirement may be just that – a dream

Many seniors saddled with so much debt that they’ve been forced to put off retirement or continue to work at least part-time. Are you a senior who is drowning in debt? Call Ira Smith Trustee & Receiver Inc. for a lifeline. We can help you get out of debt, get back on track and looking forward to retirement Starting Over, Starting Now.

 

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Brandon Blog Post

FULLY FUND YOUR RETIREMENT: ARE YOU ASKING YOUR HOUSE TO DO IT FOR YOU?

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Fully fund your retirement

Fully fund your retirement: Introduction

To fully fund your retirement, you need to start early. Canadians are just not facing that reality. According to HSBC Bank Canada almost half of working-age people in Canada are not currently saving for retirement. And, they’re twice as likely to consider selling their homes to fully fund their retirement compared to those who have been diligent about their retirement savings plans. Perhaps you are one of the smart and lucky ones who have including seeking the advice of one of the many retirement planning experts.

Fully fund your retirement: Are you counting on your house to?

A recent HSBC survey found that:

  • 20% of pre-retirees in Canada plan to downsize or sell their primary and secondary residence to fund their retirement.
  • Only 5% of current retirees will sell their house to fund their retirement.
  • At age 25-29, a group with low home ownership levels, only 12% expect their property will fund their retirement.
  • In their 40s, 20% expect their property will fund their retirement.
  • In their 50s, 26% expect their property will fund their retirement.
  • In their 60s, 31% expect their property will fund their retirement.

Fully fund your retirement: Needs are changing

There is certainly a dramatic shift in people’s views on pension funds, retirement funds needed, retirement strategy and certainly speaks to the lack of retirement planning, saving and the fully funded pension plan.

It seems that as Canadians approach retirement age, selling their house is the only retirement finance option available to them. The problem with this scenario is that it assumes that the house is sold and very sensibly the couple or individual will downsize their lifestyle and put their budget on a diet so that they can live off the proceeds of the sale of the house.

The reality is that if they haven’t:

  • clearly calculated the retirement funds needed for the lifestyle they wish to have;
  • saved for retirement (including considering the impact of tax on retirement funds); and
  • have not already downsized their lifestyle in preparation for retirement

they may blow through the proceeds of the house and be worse off than they were before.

Fully fund your retirement: What to do if your financial concerns prevent you from doing so

If you’re a pre-retiree with financial concerns seek the counsel of a professional trustee before retirement. We can help you deal with how to solve your financial problems while you still have options available to you so that Starting Over, Starting Now you can be on your way to enjoying financial health in retirement. Make an appointment with us for a free, no obligation with the Ira Smith Team today. You’ll be happy you did.

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