Are you the family banker?

I was talking to my brother as he was doing the math needed to see when he could retire. As part of the conversation, he told me that his son was soon going to be in a position to start to pay back the loans my brother had given him to get his degree. I have another friend that also had helped his daughter to finish her degree and then to get resettled after her divorce.

I started to wonder how many Boomers act as the family bank. I know that I have helped support my son and have paid for trips to come home for my daughter and her family. For most Boomers, a family makes life, and life in retirement, richer and more enjoyable. But family connections can also complicate retirement. Retirement planning has traditionally centred largely on the needs of an individual or a couple. Our lives and the lives of pre-retirees today are complicated a few converging trends. One of which is that Parenthood Doesn’t Retire. In today’s uncertain economy, adult children and other younger relatives, struggling with career stalls and financial difficulties, are increasingly turning to us for a helping hand.

According to a Merrill-Lynch Study six in ten people ages 50 and over are providing financial support to family members. This support may be to meet a one-time need, or it could be ongoing assistance over the course of many years and is often offered without expecting anything in return. But those providing support to family members are often not accounting for it in their retirement planning, nor are they talking with family members about it, which can pose a hidden risk to retirement.

Financial help extends in multiple directions, including adult children, grandchildren, parents and in-laws and siblings. The amount of support provided by Boomers to a family can be thousands of dollars a year and averages $14,900 among people with less than $5 million in investable assets

Three out of five people (56%) age 50+ believe a member of their family is the “Family Bank,” meaning someone who their extended family is most likely to turn to for financial help.

The role of the Family Bank is often assigned to those who saved and invested responsibly. In fact, the more financially responsible you are, the more likely other family members will consider you to be the Family Bank

Half of the younger Boomers say they would make major sacrifices that could impact their retirement to help family members. Three in five say they would retire later, four in ten would return to work after retirement, and more than one-third say they would accept a less comfortable retirement lifestyle to help the family financially Family

We are willing to make major sacrifices to our own retirement and financial security in order to support family members, without knowing why the money is needed. We don’t expect to be paid back but we hope that at some point if we need assistance or help our family will be there for us. We believe helping family “is the right thing to do” and our “family will help me in the future”. If we think that the money we are given is being misused, we are more likely to stop helping. When we give the help, we do not expect to be paid back although if that happens it nice.

Unfortunately, very few of us have prepared financially for potential family events and challenges. The vast majority of people of us have never budgeted and prepared for providing financial support to other family members, caring for an ageing parent or relative, or helping to pay for their grandchildren’s education. We have not prepared but we still provide such support. This lack of preparation extends to end-of-life issues as well. Among Boomers only about half of us have a will, four in ten have a healthcare directive and just one-third have both a will and a healthcare directive. We have to plan better.

Have you ever caught someone's eye?

This is so bad, it's funny

A man is dining alone, in a fancy restaurant and there is a gorgeous redhead sitting at the next table. He has been checking her out since he sat down but he lacks the nerve to talk with her. He is deciding on how to get his courage up and is just about ready to say something to her. Suddenly she sneezes, and her glass eye comes flying out of its socket towards the man. He is surprised, but being a pretty good athlete he reflexively reaches out, grabs it out of the air, and hands it back. Oh my, I am so sorry, the woman says as she pops her eye back in place. "Let me buy your dinner to make it up to you, " she says. 

He agrees and is delighted. They enjoy a wonderful dinner together, and afterwards, they go to the theatre followed by drinks. They then go out dancing at an after-hours club. At the club, they talk, they laugh, she shares her deepest dreams and he shares his. She listens. After paying for everything, she asks him if he would like to come to her place for a nightcap and stay for breakfast. They had a wonderful, wonderful time. The next morning, she cooks a gourmet meal with all the trimmings. The guy is amazed!! Everything had been SO incredible!! You know, he said, "you are the perfect woman. Are you this nice to every guy you meet?" No, she replied, 

Wait for it.......................................

"You just happened to catch my eye."

Where do you think you will live after you retire?

I find it interesting that many who are thinking of retiring believe that once they retire they will have the freedom to live anywhere, and they will pack up and go. That is not what happens when we retire, most of us reconnect with our own community. We don’t downsize, because we have children and grandchildren who visit and we need a large home to allow that to happen. Our home, if we own a home, becomes important not just as a financial windfall, but because of the emotional connection to our home.

I have a few friends who decided to move when they retired, and for a long time, they regretted their decision to move. Most of my friends have stayed where they are in retirement. When deciding where to live in retirement, whether you decide to move or stay in your current home, carefully consider a range of priorities that will be important to you in future. You should consider affordability, climate, proximity to family and friends, recreational or cultural activities, opportunities for continued work, access to good healthcare, etc.  My brother-in-law talked continually about moving upcountry when he and his wife retired, but once they looked at the items I listed they decided to stay where they are, however, if you are thinking of moving to another area consider trying out a potential area to live in retirement with extended visits or short-term rentals.

Consider all expenses when forecasting potential home-related costs during retirement, including mortgage or rent payments; income, estate, and property taxes; and insurance, relocation, utilities, repairs and maintenance, and other expenses. It is also important to consider whether you might want to renovate or remodel your home in retirement and plan and budget for those expenses as well. My wife and I did this and decided to renovate our home, which included redoing all of the plumbing as we knew it would be a major problem later on.

Assess whether you should pay off your mortgage before retirement. Paying off your mortgage before you retire can create greater financial security and peace of mind. But there are many factors – such as your risk tolerance, interest rates, taxes, estate planning, and other investment opportunities – that you should factor into this decision. Only about 68% of those retired have paid off their mortgage.

Don’t assume you will downsize your home in retirement. Moving to a smaller home can provide cash and reduce expenses, but you may find your current or even a larger home better fits your lifestyle and family needs in retirement.

Prepare for long-term care, in case it is needed, by researching options that would enable you to receive care where you most prefer, whether you choose to move to supportive communities and housing or to stay in your own home.

Consider home modifications and services that can empower you to remain in your own home if you face health challenges. Modifications, like installing lower counters and tables, replacing lever handles, enhancing bathroom safety features, and changing your living situation to avoid the use of stairs, can make it easier to get around your home. Home care services and health monitoring and alert technologies can enable you to continue living independently as long as possible

Though you will enjoy new freedoms during much of retirement, as you age, health challenges and care needs can become a larger factor in where you choose to live. There are two distinct phases when it comes to choosing where to live during retirement.

The first phase in retirement living, which can often span now 15 to 20 years or more, is a time of more freedom and new choices for how and where people live. This first phase has emerged as people live longer and are often healthier and more active than prior generations of retirees.

During the second phase, which often begins when people are in their 80s, health becomes an increasingly important factor impacting where people live. Among people age 85+, three-quarters have difficulties with at least some daily activities, such as housework, getting around the home, or other everyday tasks. As a result, many over the age of 80 consider a  move into an assisted living facility. The average age of people entering assisted living is 85.

Country Rankings

Have you wondered how your country ranks on a global scale?  US News and World Report put together a ranking of the best countries in the world to live. I am very happy where Canada is on the list for 2018. For those who want to see the entire list go here (pdf file). As you can see from the chart, the countries are ranked by various criteria, Entrepreneurship, Adventure, Cultural Influence, Citizenship, Movers, Quality of Life. The country attribute scores were equally weighted within each sub ranking.

You may not agree with the rankings or how they arrived at them, but if you go to the link above they will explain in detail, how they arrived at the categories and how they then arrived at the 10 ranking countries.

As they explain, “Best Countries is a dynamic, multimedia portal that includes rankings, video content, interactive data visualization tools, original reporting and op-eds from international thought leaders. The content leverages data derived from a proprietary survey produced in partnership with U.S. News & World Report, Y&R’s BAV Consulting and the Wharton School of the University of Pennsylvania.

The 2018 Best Countries rankings include an overall list of 80 nations numerically ranked – up from 60 in the inaugural edition.

Additional “Best of” lists were produced, including the countries that are best to headquarter a corporation, raise a family, receive an education, invest in, and more. Why rank countries? The Best Countries project is designed to help citizens, business leaders and policymakers better understand how their nations are perceived on a world scale.

Now for some insights into my country as shown in this report

Canada takes up about two-fifths of the North American continent, making it the second-largest country in the world after Russia. The country is sparsely populated, with most of its residents living within 125 miles of the U.S. border. Canada’s expansive wilderness to the north plays a large role in Canadian identity, as does the country’s reputation of welcoming immigrants.

Although the Norse briefly settled in Canada during the 10th century, European exploration accelerated in the 1500s. France and Britain angled for control over the region, with the British cementing their dominance in the year 1763. The country was a collection of British colonies until it became a self-governing dominion in 1867.

Canadians pride themselves in encouraging all of their citizens to honor their own cultures. In 1971, Canada adopted a national policy of multiculturalism, which celebrates the country’s diversity. The list of accomplished Canadian writers and artists is long. Céline Dion, Sarah McLachlan and Joni Mitchell are just a few of the Canadians who have made an impression on modern music.

Technically, Canada is a constitutional monarchy with the U.K. monarch as the head of state. The royal leader is represented locally by a largely ceremonial governor-general appointed by the Canadian prime minister. The government follows the British style of parliamentary democracy. The capital, Ottawa, is located in the province of Ontario.

Canada is a high-tech industrial society with a high standard of living. Trade agreements in the 1980s and 1990s dramatically bolstered trade with the U.S., and now the two counties are each other's largest trading partner. While the service sector is Canada’s biggest economic driver, the country is a significant exporter of energy, food and minerals. Canada ranks third in the world in proven oil reserves and is the world’s fifth-largest oil producer.

Canada faces national challenges related to the concerns of indigenous people and those in the predominantly French-speaking province of Quebec. While constitutional guarantees allow the province wide-ranging cultural and linguistic autonomy, movements for complete independence come in waves.

Canada is a member of the United Nations, through which it has participated in many peacekeeping missions. It is also a member of NATO and the Commonwealth of Nations.