Hidden costs in retirement

I have talked about the hidden costs of retirement with the biggest hidden cost being health related. Those who retire, at some point, will face unanticipated health care costs. Yet a new poll shows that we are not prepared for those costs. Retired Canadians aged 50 and over are finding that unanticipated costs, health issues and higher than expected tax bills are their biggest surprises in retirement. Complicating the situation for these retired Canadians is that many left the workforce before they expected to, putting pressure on their retirement income and leaving many wishing they had started planning sooner.

It's important to remember retirement planning is much more than checking your annual RRSP contribution off the list. The key to mitigating surprises or coping with the cost of health issues is planning ahead for the life you want to live.

Canadians are not stupid we are among the most educated people in the world, yet when it comes to retirement, many Canadians underestimate their spending in retirement. We appear to have a blind spot about this topic, or don't realize that we may have to retire earlier than we expect. If we are forced to retire early we may be unprepared to manage higher expenses than expected on a lower income than planned

Taxes can impact retirement cash flow Before 2009, when Tax Free-Savings Plans (TFSA) were introduced, Registered Retirement Savings Plans (RRSP) were among the few tax-efficient retirement savings vehicle. The poll indicates that some retirees bulked up on their RRSP savings, and are now facing a surprising tax bill as they convert their RRSP income into Registered Retirement Income Funds (RRIFs). As a result, some may also experience claw-backs on income-tested government benefits, which could have been avoided with earlier planning. 

Tax tips for fewer retirement surprises:

• Create your retirement plan - Getting a sense of your retirement goals and what they will cost you is the first step to building a tax-efficient retirement plan.  Your retirement plan is personal to your goals and income needs, so speak to an advisor to help you build the plan that's right for you.   
• Maximize tax-advantaged savings as you near retirement – Now is the time to accelerate your savings by maximizing your RRSP and TFSA contributions. Not only will your savings grow without tax within these plans, when you withdraw funds in retirement you'll likely do so at a lower income so you'll pay fewer taxes (with an RRSP) or no tax at all (with a TFSA).
• Withdraw RRSP funds strategically – and re-invest in a TFSA – Although funds can remain in your RRSP until age 71, consider how early withdrawals may help to reduce your overall tax bill in retirement. Use the  Retirement Calculators to understand how all of your income sources (benefits, pensions, savings) work together, and identify where you may be able to top up income at lower marginal rates. For added savings, consider re-contributing after-tax RRSP withdrawals to your TFSA, to continue tax-sheltered growth.
• Retiring early? Time your withdrawals to maximize your benefits: If you're retiring early or entering semi-retirement, speak to an advisor about the benefits of using your savings or delaying your CPP/QPP benefits to fit your income needs for retirement.

Laughing is contagious

f you have not seen this, take a look. It is a reminder that laughing is contagious. Try not to laugh or smile as you watch it, I am betting that you can not.

Gonzales (a division of Serviceplan Benelux) created a local market stunt in Antwerp metro for the Belgian "choose happiness" campaign of The Coca-Cola Company. With the insight "happiness starts with a smile", Gonzales turned moody subway faces into smiling one

Living through Kitchen renovations

Last fall we decided to renovate our 30-year-old kitchen to bring it up to modern standards. The idea is that in another 5 or 10 years, we will not be able to live in the house and will have to sell. When we examined which renovations will add the most value to a home we discovered that remoulding the kitchen was the best idea.

So, we found a good designer and told her what we wanted, and her company became our contractor for the project. It was a worthwhile investment. We wanted to finish the work on the kitchen before my daughter and her extended family from Australia came to visit, so our time frame was short.

I know many of you have lived through the chaos of a renovation but it was the first (and last) time for us. The first step was to remove everything from the cupboards and as we did this we realised that we had many items that we did not use, so they were given to Value Village and to family members who needed them. However, even after culling our cupboards we had boxes of food and utensils that filled the family room to the brim. For the first two weeks, as they dismantled the old cupboards it was not so bad. 

The plumbing was an interesting adventure; when our house was built in the late 80's they used Poly B for the plumbing. While we found out that with Poly pipe leaks are unforeseeable and there are no signs to warn of an upcoming leakage. Some things that influence polybutylene piping detrimentally consist of:

·        Poor instalment by the plumbers.

·        Water quality.

·        Age of the pipe and fittings.

·        Devices used during the instalment were calibrated for correct tolerances.

·        Chlorine and mineral levels.

·        Degeneration of pipe fittings.

When polybutylene pipe reacts with the oxidants in tap water, it becomes fragile, occasionally scaling or flaking. This results in the fracturing of the indoor surface area of the pipe, which permits, even more, degeneration. Ultimately the pipe will start to leak, causing water damage.

As luck, would have it, the day before the demolition of our kitchen was to begin, we found a leak in our plumbing system. So, after discussions with the contractor and the plumber we made the decision to replace all of the plumbing in the house, which added time to the renovations.

We had been operating with a sink, a stove and the fridge, while waiting for the cabinets, once the cabinets arrived, we lost the sink and the stove, but kept the fridge for a few days. Eventually, our new appliances arrived and we had a new sink, which was put in when the countertops arrived (two weeks after the installation of the cabinets.  

The new cabinets arrived at the end  of two weeks and then the clutter became almost unbearable. To make room for the cabinets we had to move the kitchen boxes from the family room to the living room. So the family room became the place for the new kitchen cabinets to sit while waiting to be installed.

I did find some online advice on how to survive a kitchen renovation from  Kitchen Workbook at Houzz.com, We did #2, #3 and #4, but we could have done more. If you are doing renovations, the advice in #8 is what you have to hold onto, to keep your sanity through the adventure:

1.Designate a kitchen stand-in. Eating out all the time gets tiresome, not to mention the strain it can put on your budget. And no matter how much takeout you bring home, you'll still need a spot to make school lunches, pour a bowl of cereal or brew coffee. Set up a temporary kitchen somewhere that's out of the way of construction. If you're lucky enough to have a morning kitchen or a guesthouse, you can turn that into food-prep central. Or outfit a corner of the basement, garage or workroom with a few portable tables, standalone shelves, storage crates and folding chairs.

2.Winnow down your kitchen gear. During a remodel, your cooking and eating routine will be disrupted, and no matter how much you love to cook, ambitious meals will be a challenge. 

3.Keep things simple and pare down to the kitchen tools you really, truly can't live without. Be merciless — how often are you going to use your food processor or waffle iron? Stash the essentials close at hand and store the rest.

4.Plan meals around small appliances. Portable workhorses such as slow cookers, microwaves, toaster ovens, electric griddles and skillets, hot plates and coffee makers can get you over the mealtime hump.

Move your fridge to your temporary kitchen, if possible; if not, invest in a minifridge and a chest freezer (check Craigslist or Free cycle), or borrow them from a friend.

Stock the pantry with disposables. Without your usual spot to wash dishes, you'll be getting creative (the bathtub, an outdoor hose, a cooler full of sudsy water). 

Make life easier by stocking up on recyclable or biodegradable plates, napkins, cups and utensils. You'll streamline cleanup and cut down on the stress of your temporary displacement.

5.If the weather cooperates, put your grill to work. Here's a secret: Your grill can do almost anything your oven can. Need to roast meat or vegetables, or bake pizza? Look at the grill. You can even channel your Scout days and use it for foil packet meals, pans of biscuits and rolls, skillet pies and cobblers and, of course, s'mores.

6.Keep a stash of non-perishable snacks. When you're starving, but can't face putting together a full meal in your makeshift digs, snacks can save your stomach

7.Leave town for a short time, if you can. If you're considering a vacation or need to schedule a business trip, now might be a good time, assuming you're comfortable with the remodelling work continuing in your absence. Bonus points if you're visiting relatives — you might score a home-cooked meal or two.

8.Remember the big picture. In the grand scheme of homeownership, this is but a short period of inconvenience amid years of kitchen bliss. Keep the process in perspective and treat it as an adventure. When you're hard at work in your sparkling new kitchen, the temporary hassles will fade from memory.

21 Rules For a Good Old Age

21 Rules For a Good Old Age 

It is surprising where you can find good advice on the Internet. The following is from Assaly & Associates s.a.r.l out of Lebanon, and is a company that specializes in governing and handling the relations of our clients with their Bankers - “Bank Relationship Management”. Follow the link above if you want to read the source.

 Some of us have reached our golden years, and some of us have not. But these suggestions should be read by everyone. They have been collected from many a senior, each with his or her own piece of advice. Some you know, some may surprise you, and some will remind you of what's important. So, read well, share with your loved ones, and have a great day and a great life!

1.       It's time to use the money you saved up. Use it and enjoy it. Don't just keep it for those who may have no notion of the sacrifices you made to get it. Remember there is nothing more dangerous than a son or daughter-in-law with big ideas for your hard earned capital. Warning: This is also a bad time for an investment, even if it seems wonderful or fool-proof. They only bring problems and worries and this is a time for you to enjoy some peace and quiet.

2.       Stop worrying about the financial situation of your children and grandchildren, and don't feel bad spending your money on yourself. You've taken care of them for many years, and you've taught them what you could. You gave them an education, food, shelter and support. The responsibility is now theirs to earn their own money.

3.       Keep a healthy life, without great physical effort. Do moderate exercise (like walking every day), eat well and get your sleep. It's easy to become sick, and it gets harder to remain healthy. That is why you need to keep yourself in good shape and be aware of your medical and physical needs. Keep in touch with your doctor, get tested even when you're feeling well. Stay informed.

4.       Always buy the best, most beautiful items for your significant other. The key goal is to enjoy your money with your partner. One day one of you will miss the other, and the money will not provide any comfort then, enjoy it together.

5.       Don't stress over the little things. You've already overcome so much in your life. You have good memories and bad ones, but the important thing is the present. Don't let the past drag you down and don't let the future frighten you. Feel good in the now. Small issues will soon be forgotten.

6.       Regardless of age, always keep love alive. Love your partner, love life, love your family, love your neighbor and remember: "A man is not old as long as he has intelligence and affection."

7.       Be proud, both inside and out. Don't stop going to your hair salon or barber, do your nails, go to the dermatologist and the dentist, keep your perfumes and creams well stocked. When you are well-maintained on the outside, it seeps in, making you feel proud and strong.

8.       Don't lose sight of fashion trends for your age, but keep your own sense of style. There's nothing worse than an older person trying to wear the current fashion among youngsters. You've developed your own sense of what looks good on you - keep it and be proud of it. It's part of who you are.

9.       ALWAYS stay up-to-date. Read newspapers, watch the news. Go online and read what people are saying. Make sure you have an active email account and try to use some of those social networks. You'll be surprised which old friends you'll meet. Keeping in touch with what is going on and with the people you know is important at any age.

10. Respect the younger generation and their opinions. They may not have the same ideals as you, but they are the future, and will take the world in their direction. Give advice, not criticism, and try to remind them of yesterday's wisdom that still applies today.

11. Never use the phrase: "In my time". Your time is now. As long as you're alive, you are part of this time. You may have been younger, but you are still you now, having fun and enjoying life.

12. Some people embrace their golden years, while others become bitter and surly. Life is too short to waste your days on the latter. Spend your time with positive, cheerful people, it'll rub off on you and your days will seem that much better. Spending your time with bitter people will make you older and harder to be around.

13. Do not surrender to the temptation of living with your children or grandchildren (if you have a financial choice, that is). Sure, being surrounded by family sounds great, but we all need our privacy. They need theirs and you need yours. If you've lost your partner (our deepest condolences), then find a person to move in with you and help out. Even then, do so only if you feel you really need the help or do not want to live alone.

14. Don't abandon your hobbies. If you don't have any, make new ones. You can travel, hike, cook, read, dance. You can adopt a cat or a dog, grow a garden, play cards, checkers, chess, dominoes, golf. You can paint, volunteer at an NGO or just collect certain items. Find something you like and spend some real time having fun with it.

15. Even if you don't feel like it, try to accept invitations. Baptisms, graduations, birthdays, weddings, conferences. Try to go. Get out of the house, meet people you haven't seen in a while, experience something new (or something old). But don't get upset when you're not invited. Some events are limited by resources, and not everyone can be hosted. The important thing is to leave the house from time to time. Go to museums, go walk through a field. Get out there.

16. Be a conversationalist. Talk less and listen more. Some people go on and on about the past, not caring if their listeners are really interested. That's a great way of reducing their desire to speak with you. Listen first and answer questions, but don't go off into long stories unless asked to. Speak in courteous tones and try not to complain or criticize too much unless you really need to. Try to accept situations as they are. Everyone is going through the same things, and people have a low tolerance for hearing complaints. Always find some good things to say as well.

17. Pain and discomfort go hand in hand with getting older. Try not to dwell on them but accept them as a part of the cycle of life we're all going through. Try to minimize them in your mind. They are not who you are, they are something that life added to you. If they become your entire focus, you lose sight of the person you used to be.

18. If you've been offended by someone - forgive them. If you've offended someone - apologize. Don't drag around resentment with you. It only serves to make you sad and bitter. It doesn't matter who was right. Someone once said: "Holding a grudge is like taking poison and expecting the other person to die." Don't take that poison. Forgive, forget and move on with your life.

19. If you have a strong belief, savor it. But don't waste your time trying to convince others. They will make their own choices no matter what you tell them, and it will only bring you frustration. Live your faith and set an example. Live true to your beliefs and let that memory sway them.

20. Laugh. Laugh A LOT. Laugh at everything. Remember, you are one of the lucky ones. You managed to have a life, a long one. Many never get to this age, never get to experience a full life. But you did. So what's not to laugh about? Find the humor in your situation.

21. Take no notice of what others say about you and even less notice of what they might be thinking. They'll do it anyway, and you should have pride in yourself and what you've achieved. Let them talk and don't worry. They have no idea about your history, your memories and the life you've lived so far. There's still much to be written, so get busy writing and don't waste time thinking about what others might think. Now is the time to be at rest, at peace and as happy as you can be!

AND REMEMBER: "Life is too short to drink bad wine."