Waiting in line

While I was waiting in line that was not moving at my local supermarket and the person in front of me turned to me and said, "I have a big trolley for only one item, don't you think?"

I looked and he had only one item in the cart, it was a small jar of hot sauce. I wasn't sure what to say but he continued, " I can't hold an item and walk with my crutches as my back is so bad." He went on to explain his medical problem. He had one crutch and he was using the trolley for support. I said I had been in that situation when I had my hip operation.

We talked for a while as the line did not move. He told me that he was 79 years old and he had worked all of his life at hard labouring jobs as a self-employed contractor, He explained the hard lifting he had done when he was younger was now catching up with him. He told me he needed to continue to work, as he needed to but he only did the small jobs that did not take a physical toll on him. 

It was a pleasant conversation but it made me think about how many other seniors were in his position. He did not say it, but I suspect that as a self-employed person, he did not set up a Registered Retirement Saving Plan, nor would he have contributed to his Canada Pension until he was required to and I suspect he paid the minimum amount. So at almost 80, he is in a situation where he has to work even though he is physically in pain.

As we move through the three stages retirement, we need less money. In the initial stage about the first ten years, we have hopefully, our health, and energy and we use that energy to travel, to volunteer, to work part time. As we move into the second stage of retirement the second 10 years, we slow down, and our energy is reduced and we do not travel as much and we become more homebound, either because of physical illness or just lack of energy. The man I talked to was in what would normally be his second stage of retirement, but because of circumstance he was not yet fully retired.

When we get out and about and listen we find some interesting stories.

There are sharp differences between divorced men and women when it comes to finances

Three-quarters of retirement-age divorcees lack a good understanding of how to manage their personal finances, according to a survey of CPA planners released by the American Institute of CPAs.

The divorce rate for Americans 50 and older has doubled since 1990, and more and more people nearing retirement will find themselves scrambling to get on solid financial footing.

CPA planners in the survey noted sharp differences in how divorced men and women approached their finances as they prepared for retirement.

Twenty-six percent of female clients and 25% of male clients were likely to experience a deterioration of their spending habits following divorce. However, female clients were much likelier than male clients to adopt positive financial behaviours after divorce.

The reasons Americans are neither confident about nor prepared for retirement, and how to rectify both.

Forty percent of women were likely to look for a job, compared with 21% of men, and 41% of women to increase their saving toward retirement, versus 16% of men.

Not only that, women were seen as nearly four times more likely than men to improve their spending habits and roughly 14 times likelier to actively seek out financial advice after divorce.

When couples get divorced later in life, there is often one partner in the relationship who handled all of the finances.

In many instances, this leads to one person in the relationship not having an accurate picture of the family finances, including their retirement savings. It is essential that couples who get divorced later in life take a long view when dividing assets and making financial decisions.

The survey asked CPA financial planners what their clients near retirement age could do to be better prepared financially for divorce.

Seventy-six percent said their clients understand how to manage personal finances, 73% understand the long-term financial planning consequences of a divorce settlement and 57% understand the tax implications of a divorce settlement.

CPA financial planners pointed to other steps that would better prepare their clients for divorce:

·       Updating wills or trusts: 51%

·       Increasing saving for retirement: 51%

·       Decreasing spending: 43%

These things reflect the importance of keeping documents accurate and up to date and building up savings before assets are split, the report said.

In addition, 36% of planners cited a prenuptial agreement as a step that would better prepare their clients financially for divorce.

The report was based on an online survey the AICPA administered last February to members of the AICPA personal financial planning section, and to which 548 CPAs submitted completed responses.

Do you have long term health care, maybe you should

Some 323,000 Canadians have inadequate retirement income once the costs of long-term health care are factored in, a figure that could grow to about 815,500 by 2038, according to a new study. The study, which looked at the impact of out-of-pocket health-care expenses on Canadian retirement security, was conducted in three major phases by the Healthcare of Ontario Pension Plan and the University of Toronto’s Institute for Health Policy, Management and Evaluation. 

The first was a review of the most relevant academic literature on retirement security and health spending in Canada; the second was an analysis of household consumer spending data to assess health spending trends; and the third was a recreation of LifePaths, a statistical model created by Statistics Canada to assess Canadians’ retirement readiness, with health spending factored in.

The study also found:

• Out-of-pocket health-care costs tend to rise with age, especially among high consumers of health-care services.
• To date, studies and analyses of Canadians’ retirement readiness have neglected the increasingly important area of out-of-pocket health-care costs, including home-based and long-term care.
• Including the costs of home-based and long-term care in the analysis worsens the picture of Canadians’ retirement readiness and future retirement security among certain groups, particularly women and people aged 85 and older. The percentage of women projected to have inadequate income nearly doubles once health-related costs are factored in (increasing to 17 per cent from 11 per cent for 70-year-olds and to 44 per cent from 25 per cent for 85-year-olds).

These findings play out against the backdrop of another issue — the fact that caregiving is a serious financial burden for an increasing number of adult Ontarians. Living longer means more Ontarians will live to 85, at which point the probability of becoming severely disabled increases significantly. Twenty-five percent of women and 15 percent of men aged 85 are severely disabled, which means significantly higher health-care spending and an increased need for caregiving from family members and home-care professionals.

The good old days

Spring is a time of renewal and increasing energy, but in the spring, young man's and young women's fancy turns to love. But we sometimes in the Spring, feel nostalgic for the good old days. We think, those were the days my friend, we'd hope they'd never end.

Before this life began, when we buzzed with happy talk, walked on happy feet, and loved with happy friends obsessed with one thing and one thing only... the possibilities, the challenges, and the adventures; the scares, the dares, and the comebacks; the glories, the miracles, and the triumphs that would all be made possible once we grew up.

Well, did you know that our todays are still the good old days, so make the most of them and continue to build your memories, and reach your dreams. Life is too short