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Technique to spice up retirement few Canadians are utilizing

Technique to spice up retirement few Canadians are utilizing


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The usual age to retire is 65 in Canada, however if you happen to’re in good well being and anticipating to reside a protracted life, you could need to think about deferring Canada Pension Plan, says a monetary planner.

You can begin CPP as early as age 60 or as late as 70, however the longer you wait, the upper your month-to-month profit will likely be since they are going to cowl fewer years, says Jason Heath, managing director of Goal Monetary Companions Inc.

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“Usually talking, if you happen to reside effectively into your 80s, you’ll be able to come out forward by deferring your CPP to age 70. The issue? No person does it,” Heath stated.

Heath, a fee-only, advice-only licensed monetary planner and Monetary Publish columnist, just lately spoke with FP’s Larysa Harapyn about different methods for retirement.

Regardless of the advantages, solely 5 per cent of CPP candidates waited till the age of 70 in 2022, he stated.

Essentially the most profitable retirees Heath has seen are those that have transitioned to retirement by part-time, consulting or volunteer work, avoiding the acute change from a 40 to 50-hour work week.

“The sooner you begin to plan retirement, not solely from a monetary perspective, however from a life-style perspective, might be actually rewarding and enhance the transition,” Heath stated. “In an ideal world, it’s deliberate, it’s sluggish, it’s regular.”

Heath acknowledged that some folks don’t have a alternative, whether or not that’s due to severance packages within the company world or well being points that result in a sudden retirement. “Loss of life and retirement aren’t meant to go collectively … however actual life tends to work somewhat in another way,” he stated.

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Expat locations for retirement are an possibility for Canadians attempting to save cash on the price of dwelling. Heath stated there’s alternative in nations reminiscent of Panama, Ecuador, Costa Rica and Mexico which try to draw retirees from different nations. Among the advantages embody decrease actual property costs, meals prices and simpler journey to unique areas.

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For individuals who desire to remain nearer to house, tapping into your house fairness by downsizing or borrowing in opposition to your house are choices in the proper circumstances, significantly for individuals who reside in massive cities the place house costs are greater.

“If it buys someone 5 extra years of their house, for instance, borrowing in opposition to that worth earlier than they promote it, I don’t suppose it’s a nasty factor,” stated Heath.

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