Do you procrastinate?

 I tend, I think like many others to procrastinate on some things, but not on others. Over the years I have developed some skills in dealing with this issue. For those who wish to stop procrastinating feel free to try these ideas, when you get around to it:

• Use visualization by visually imagining in your mind what it will feel like doing the task last minute including the stress, exhaustion, and the possibility of not completing it in time or handing in a subpar product. 

• Enlist others to hold you accountable to complete each small step.

• Setting deadlines can be a helpful tool against procrastination when set correctly. A study from November 2021, found people were more likely to complete a task with a 1-week deadline or no deadline compared to being given a 1-month deadline.  Based on these findings if you tend to procrastinate set shorter deadlines rather than longer ones.

• Try the “chunking” method: Try to split things up into manageable chunks and do them over time. For example, instead of cleaning your whole house, which can feel overwhelming, just commit to cleaning the sink today and the floors tomorrow. Oftentimes when you get started on a subtask, it also makes it much easier to complete the whole thing because you prove to yourself that the task you put off isn’t really as bad as you made it out to be in your head.

Examine plans for your retirement!

I have written about my failure to adjust to retirement. I show on my blog page that I officially retired in 2006 but I actually retired in 2014. One of the main reasons I took so long to adjust is that I did not have a plan before I retired. My wife was ill, so she retired, and, on a whim, I retired at the same time. That was a mistake. 

After years of semi-retirement and years of full retirement, my suggestion or advice would be to sit down and do some planning. The first step is to understand that there are stages of retirement. They have been labeled by Michael Stein ins his book as the Go-Go years, the Slow-Go years, and the No-Go years and by others as the honeymoon stage, the comfort stage, and the slow-down stage. No matter what you call it, most people go through these stages as they get older.

The first stage is when you tend to be physically and mentally capable of living a fairly active lifestyle. In fact, the phase may not be that much different than pre-retirement except that there may be more time to do things like travel and hobbies.

For some, this stage will include work. It may be part-time work, or it may mean self-employment. Whatever the case, active retirement is really living the stereotypical retirement dream. Many retirees in this phase, they are busier than they were prior to retirement.

In the second stage, the body tells you to slow down a little. Often this happens between the ages of 76 and 84. We are creatures of habit and so in this stage, life starts falling into patterns and the excitement of retirement becomes more stable. We fall into predictable patterns like banking on Mondays, groceries on Tuesdays, bridge on Fridays, etc. 

Part of the reason for these patterns is that energy levels are changing, and patterns help minimize effort and thought without compromising on the enjoyment of life. The older you get, the more important it is to find routines and patterns that give you comfort and security.

In the final stage, time and age play a role in slowing down activities and abilities. Sometimes this is mental, sometimes physical, and sometimes it can be financial.

Often this stage requires some level of support from family, governments, or agencies. Again, this can be physical, emotional, or financial support. Choices become much more limited, and we move to complete unresolved issues before we die.

With an understanding of the three stages then it is a good idea to start by listing a number of questions such as:

·        What would a successful retirement look like for you?

·        What’s still on your bucket list?

·        What would a good “average day” look like for you?

·        What kind of retiree/senior/elder/grandparent do you want to be?

·        Who do you want to spend time with during your retirement?

·        What would be the ideal community for your retirement years?

·        What type of house could best meet your needs after you retire?

Answering these questions about each stage of retirement can help you more easily move on to the important decisions that impact your finances. Ideally, you’d start exploring your answers at least five years before you plan to retire. In my case, I explored all of these questions for five years after I retired so some of the questions for me were redundant. But if you haven’t already started and you’re closer than that or even retired, it’s better late than never!

·        When would you like to retire? How will you decide when to retire?

·        Do you know what your living expenses might be in retirement? Have you developed a budget?

·        Do you have a plan for developing sources of retirement income that can cover your living expenses?

·        Will you be able to live in your current house if you or your spouse become frail later in life?

·        Do you have a plan if you reach a stage in your life when you’re no longer able to manage your day-to-day finances?

·        When’s the right time to ask these questions?

It might take some time for you to reflect on these questions. Important decisions deserve your time and attention. Also, remember to talk to seniors who are in each of the stages mentioned above as that alters or helps evolve your thinking as you explore your answers and approach your planned retirement date. It might turn out that your journey of reflecting on the questions may be as enlightening as the answers themselves. Along the way, you might find even more questions to ask yourself.

 

Inflation and retirement saving

 I am interested in what is happening in Australia because my daughter, my grandson, and his father work and will retire in that country. So, I was interested in this story published in October by the Financial Review written by Duncan Hughes His lead is that in Australia by June 2024, retired couples aged 65-84 will need to find more money to live in retirement if inflation continues unchecked, if inflation is brought under control, then the numbers will change. My daughter and her partner have about 25 more years before they retire, but they need to take the risks seriously.

Retirees’ living expenses will increase by almost 10 percent over the next two years because of rising inflation, forcing many to find ways of boosting investment returns or accepting a lower standard of living.

By June 2024, retired couples aged 65-84 will need to find an additional $6600 a year to maintain a comfortable lifestyle, according to an analysis by RateCity, which monitors rates and fees. For singles, the increase is just over $4700.

This is based on annual expenditure for a “comfortable” retirement determined by the Association of Superannuation Funds of Australia (ASFA). The ASFA Retirement Standards for a comfortable lifestyle include one overseas trip every six years and modest social life. For households with higher expenditure, the increases would be significantly more and could mean the difference between one overseas trip or two a year.

Inflation is expected to rise to more than 7 percent by the end of this year before slowing to about 3 percent by December 2024, according to the RBA.

Retirees also face volatile stock and bond markets, making it difficult to offset the impact of inflation with rising investment returns, despite small improvements in interest payments from banks’ term deposits.

ASFA says a couple aged 65-84 needs about $66,725 a year for a comfortable lifestyle. For those 85 and over, this falls to $61,108. ASFA’s Retirement Standard numbers are updated quarterly. The next two years of inflation will increase the income needed for the same lifestyle to $73,377 and $67,200 respectively, according to an analysis by RateCity.

For singles aged 65-84 wanting a comfortable lifestyle, ASFA says the amount needed is $47,383 and for those aged 85 and over, it’s $43,996. In two years, the amounts required will be $52,106 and $48,382, based on RateCity analysis.

The following strategies can help counter inflation by increasing income and reducing costs.

Review the idea of cutting spending on luxuries such as subscriptions and memberships. But two areas specifically should be looked at – major future expenses and energy costs. I am shocked at the high prices of energy in Australia compared to Canada, so my daughter should look at an energy upgrade like solar panels and battery and/or energy-efficient windows and coverings on exposed windows.

In Canada and I suspect in Australia many people are working longer or delaying retirement or working part-time to supplement income is considered a favorable option for many seniors.

Participation in the labour force in Australia over the past two years by those aged 55-59 and 60-64 has increased about two percentage points to more than 77 percent and 60 percent respectively. Those over 65 in the workforce remain steady at about 15 percent.

As I approached retirement my financial advisor asked my to consider a more conservative investment approach. It took me ten years, but I finally did move to a more conservative portfolio, but for the first ten years I invested for growth. I retired at 60 and expect to live until I am in my late 80s or early 90’s so my investments need to last a long time. Many people my age can expect to live another 15 to 20 years. So, is important to maintain growth investments to generate income

I know of many people who retired and then spent money like there was no tomorrow. Some went on overseas holidays, and others bought new cars, or did home renovations or other expensive outlays. I did all of these things, but I was confident in my investment strategy. When I moved to a more

In British Columbia as a senior, I can defer my property taxes or borrow on a line of credit on my home. Some have purchased a reverse mortgage. This is where the senior can take the funds from the equity in their home as a lump sum, a regular income stream, cash reserve, or a combination of all three.

In Australia, the federal government’s Home Equity Access Scheme is a reverse mortgage with lower interest payments and fees but fewer services than commercial competitors.

More than 70 percent of retirees in Australia also receive some form of age pension, which is automatically adjusted for inflation twice a year. The remainder are self-funded retirees. There is also cost-of-living support offered through the Pensioner Concession Card and the Commonwealth Seniors Health Card.

As a parent and a retired person, I know that is vital to start planning for retirement well before they stop working, knowing that they can invest for longer and remembering that they may live for another 20 or 30 years in retirement. I constantly remind my daughter and my son about this, and I suspect they think I am a fussy old fussbudget.

Seniors should get per month

I have seen this post making the rounds on FaceBook that says, we should be paying seniors $2,000 a month.Great idea, but a bit misleading. Why did they choose that number? What is magical about $2,000. Right if you started collecting Canada Pension you could receive starting the pension at age 65 is $1,253.59.  This is not the reality but it is a number the government likes to toss around. 

To be eligible for that amount of payment, a worker must contribute to the CPP for at least 39 of the 47 years from ages 18 to 65. You must also contribute the maximum amount to the CPP for at least 39 years based on the yearly annual pensionable earnings (YMPE) set by the Canada Revenue Agency (CRA). The YMPE for 2021 is $61,600, Since very few people start working and earn $61,600 a year, the amount of CPP earned by most workers is less than the full amount. The average monthly amount paid for a new retirement pension (at age 65) in July 2022 is $727.61. 

In addition to Canada, Pension seniors collect Old Age security in Canada for those between 65 and 74 this amount is $685.50 for those of us over 75 the amount is $754.05. To receive the maximum a senior must earn less than  $$129,757.

So the average senior who has worked in Canada now receives an income from Canada Pension and Old Age Security of $1,413.11. If this is the senior's only income they may be eligible to receive a Guaranteed Income Supplement (GIS). There is a formula for calculating the GIS and GIS payments are calculated using your income and marital status. From July to September 2022 the maximum monthly payment is $995.99 if you're single, widowed, or divorced. The maximum monthly amount is different if you have a spouse or common-law partner.

So if a senior is eligible they could receive more money so they could be earning $2,409.10 a month. Not a lot of money but better than the $2,000 that the FaceBook authors are asking people to fight for from the government.

Living on a retirement income is hard and even at $2,409.10 a month or $28,909.20 a year. This is still very close to the poverty level in Canada which is $26,620 a year for a single person. There are many seniors who are below the levels stated here because these are the maximum amounts and very few people get the maximum amount. One of the questions people ask is the following:

Does Canada have high elderly poverty rates?

The poverty rate among Canadian seniors is one of the lowest in the world. Five percent live below Statistics Canada's low-income cut-offs,1 and 7.2 percent below the OECD's poverty measure.

The issue of having an adequate income in retirement is complicated and there is no easy answer, but we are fortunate in Canada but that does not we should be complacent as the rate of inflation is rapidly destroying many seniors' savings and retirement plans, and most importantly their access to good affordable housing.