Retiree' are facing financial challenges in Canada

 Many of those who retire face a monthly financial shortage. The combined monthly income from the Canada Pension Plan, Old Age Security, is about $1450. Many who do not have a Canada Pension may also qualify for the Guaranteed Income Supplement, which could be as high as $959.26. Even with this, many retired people have a yearly income of less than $28,000 a year.

Statistics Canada said the country’s inflation rate rose to a new 18-year high of 4.4 percent in September. Higher prices for transportation, housing and food were the biggest factors in the spike to the cost of living, the agency said.

Many seniors must cut back on their expenses and fear they will outlive their money. The Canadian Association of Retired Persons (CARP) has about 350,000 members, said less than 30 percent of older Canadians have a pension. That leaves retirees to live off their savings, which are currently being affected by low-interest rates. CARP did a survey and almost 40 percent said they were afraid that they were going to outlive their money.

Ageism is a reality for seniors and many find that many employers don’t want to hire a senior. Those senior job seekers find they are invisible to the employer.

Some experts believe many seniors are struggling to get by because there are fewer defined benefit pension plans, which are indexed to inflation and usually found in the public sector.

I, like many seniors, often rely on investments that are locked in with low interest rates, because I believe I can’t afford riskier but higher-paying investments.

Interest rates are low and many of my friends have invested in their own in RRSPs, but these depend on the market. That can be problematic because they rarely keep up with inflation.

I have talked about how the government measures increases in the consumer price index “basket of goods” and how it is not in touch with how seniors spend. CARO also believes that the tool Statistics Canada uses to determine the cost of living isn’t reflective of older Canadians and the items they need to survive.

Unfortunately, these bureaucrats and politicians are the main ones left that have fixed indexed pensions, and they just don’t understand the impact on older Canadians. Because of having a financial shortfall every month, many seniors are turning to the food bank. 

Are Canadians prepared for retirement? Short answer is yes

Fidelity’s 2021 Retirement Report suggests that COVID has had a major impact on how Canadians prepare for retirement. Shifts in global culture have affected both pre-and post-retirement respondents brought about by the COVID-19 pandemic according to data collected in 2021. Twenty-one percent of pre-retirees surveyed said that the pandemic would delay their plans to retire, while 30 percent of pre-retirees surveyed cited boredom as a major factor that prevented them from retiring as early as they’d like. While financial factors remain a major concern for those looking to retire, the fear of being stuck at home with nothing to do — not even work — is causing many Canadians to push their retirement back a few years and continue working.

Uncertainty over future financial events looms over the head of Canadian pre-retirees. Fidelity’s report found that 56 percent of pre-retirees were concerned with the impact of rising costs of living on their retirement savings. Despite fears about future inflation, actual pensions have been performing incredibly well recently. In December, the average solvency index of pension plans rose slightly to a whopping 112 percent, while the pension expense index dipped to 77.6 percent. The first measure tracks the ratio of assets held in a pension versus expected payouts, while the second track the expense of maintaining a pension account. Both trends suggest pensions will be stable in the short-term future, and some account holders may even benefit from cashing out some extra assets while still maintaining a solvency index of over 100 percent.

As a country, Canada places an unusually top priority on pensions. Not only is Canada one of only six OECD countries that spend over one percent of its GDP on tax expenditures for retirement savings, but it also maintains one of the six highest pension-asset-to-GDP ratios among OECD nations.

Fidelity’s report suggests that the key to preparing for retirement is having a written plan. Eighty-five percent of pre-retirees with a plan felt financially prepared for retirement, compared to 46 percent without. Respondents with a written plan felt better emotionally, socially, and physically prepared for retirement as well. The report found similar boosts among respondents who worked with a financial advisor. Of the 25 percent of respondents with a written plan for retirement, 86 percent worked on that plan with their financial advisor.

Retirement is likely to change in a post-COVID world and some of the prep that Canadians will have to do isn’t of the financial sort. Snowbirds, COVID travel restrictions profoundly impacted the demographic of mostly older people who travel to warmer climates during the winter months. Not only did their lack of travel opportunities cause huge financial ripples in both their Canadian homes and their winter abodes, it triggered a cultural shift in the expectations that Canadians have for their post-retirement lifestyle. Financial advisors are comparing the latter stages of retirement to a COVID lockdown, giving pre-retirees a glimpse of what life is like as age catches up and travel feels like a chore. Factors like being close to family, having parks within walking distance, and having magnificent views out of your windows become a lot more important when you can’t winter in Florida.

Overall, Canadian retirement preparedness is a mixed bag. Fifty-six percent of Fidelity’s respondents were concerned with rising costs of living, and 53 percent felt like they hadn’t saved enough to feel comfortable. Despite this, financial data suggests pensions are stable and performing well, while strong national support for pensions continues. Having a written plan for retirement seems like one of the most effective ways to help feel prepared about how the changing culture of global travel may affect your retirement plans. Even after the virus is long gone, the communications technologies, delivery services, and lifestyle changes we adopted to survive the lockdown will remain. It might be difficult for the newly retired to travel the world, but it’ll be easier than ever to bring the world to them.

Gardening in a New Way

Gardening is an excellent hobby. If you have enjoyed gardening for most of your life, you know the delights it can bring to your world. Gardening gives you the chance to work outside and to feel closer to nature by helping make food, herbs, or beautiful flowers where there was nothing but weeds.

For many, the joy of gardening is far more important than any cost savings they might get from growing their own food. If you did the numbers, the food grown at home is not that much less expensive than buying it at the local grocery supermarket. However, to have a garden full of producing plants that give you fresh food is so gratifying. Gratification comes from both growing your own food and harvesting.

Many of us can no longer garden the way we used to garden. Even those who are still living in their own home may find the physical labour of tilling the soil for planting and then tending the garden may be more than they can do at this stage of life. While you may want to get out there and get your hands dirty while planting your favourite flowers or crop-producing plants, you must be mindful of any doctor’s instructions that tell you to take it easy.

Others may have moved out of that house they owned that had a yard where they could create their garden. Maintenance is a concern for any gardener, so you let your kids work with you in the garden. You could also sell your old place and get a condo or apartment that is more manageable.  

Sometimes economy or health concerns play a factor in where you are living and the best place for you right now is an assisted care facility where you can have quality medical care available should you need it. But giving up gardening may be one of the many transitions to a smaller living space that you grieve about losing and missing every spring and summer when you want to be out there in nature enjoying the experience of growing things. 

Where there’s a will, there’s away. And there are new ways you can continue to enjoy the fun of gardening within the constraints of your lifestyle. One way might be to look into getting some window boxes for your apartment. People who want a small indoor flower garden often use these long planting boxes or nurture house planets. But you could get a few of these kinds of growing spaces, solicit some help from the facility maintenance people or your kids to get them installed and filled with good earth and enjoy puttering in those small gardening spaces and see the little plants you picked sprout and grow. With the extra time you have because of retirement, you will do an outstanding job of caring for that little garden.

You can also help your kids learn to garden. By adopting the “sweet but helpful Grandparent” attitude, you may find that your children and their spouses wish they knew your gardening secrets and with a bit of partnering, you could use their muscle and flexibility to set up a nice big garden at their house. Then you can just come over from time to time to tend it as much as you can and “supervise.”

Be there on harvest day so that everyone in the family can enjoy the fresh produce and herbs you grew. And you will get a sense of renewal that you found a new way to garden that lets you keep a treasured pastime and do so within the constraints that retired life brings.

Support your local SPCA and Food Bank

 In the middle of the coldest, shortest month of the year we may forget that there are people and their pets who need our help Prior to the COVID-19 pandemic, numerous BC SPCA locations informally offered food if those in need came in and asked for help. Since April 2020, they have significantly increased their food bank outreach services to meet the needs of people in challenging times.

Currently, animal centres offer local food bank support through the following distribution streams:

• Delivery to community partners: The SPCA provides pet food and supplies to established community food banks or other social services/community partners to meet their needs.
• Direct distribution at BC SPCA locations: The SPCA distributes food and supplies to clients who come to their location during open hours or on an appointment basis.
• Pet supply drop-off to identified communities: The SPCA drops off food and supplies with remote or Indigenous communities if there is a need.
• Off-site food bank: the SPCA sets up a community food bank in a targeted low-income area, or at a partner organization’s distribution site. An example is Charlie’s Pet Food Bank in the Downtown Eastside of Vancouver, a flagship program for the BC SPCA that has been running for over 20 years.

Support your local Foodbank and your local SPCA to help our neighbours who may need our help. Somethings to think about:

·   More than 50% of BC’s food banks are in rural areas (less than 10K population)

·   More than 50% of BC’s food banks are run completely by volunteers

·   More than 80,000 individuals are assisted by our food banks every month in BC

·   0,000 seniors each month access a food bank

·   Each month, BC food banks provide an additional 496,000 meals through shelters, soup kitchens & school lunches

Many food banks go beyond the original mandate of basic food support.   75% offer ‘food-focused’ programs. 45% offer ‘skill building’ programs. All this in addition to providing emergency help, while they seek long term solutions to hunger and food insecurity such as:

·   Recovery of surplus perishable foods

·   Community gardens 

·   Home canning and preserving classes 

·   Community kitchens 

·   Nutritional education, cooking, baking classes

·   Farm Gleaning Projects 

·   Supplying and Supporting School Lunch, Snack and After School programs 

·   Providing Food for Emergency Centres 

·   Meeting the Special Needs – seniors, babies, children, pregnant or nursing women

·   Drop-in Meals 

·   Farmer’s Markets

·   Working Together with Local Farmers 

·   Reclamation of surplus food 

·   Holistic Carefree dental care, shelters, temporary housing, showers, clothing, laundry

·   Nutritional Classes

·   Delivery & mobile food banks 

·   Networking to services 

·    Budgeting help

·   Employment search support