William Ubbens, 93, is already almost a quarter century into his retirement, and is hoping for plenty more years ahead, with his pockets full.
At the start of the new millennium, Ubbens and his wife decided to start a new phase of their life. 含羞草研究社淢y wife said, 含羞草研究社楾hat含羞草研究社檚 it. I want you to sell the business.含羞草研究社�
So he sold his 45-year-old insurance firm to officially enter the golden years with his wife.
Twenty-four years later and now a widower, Ubbens said he had managed to live comfortably, and still has enough money to last him until his 110th birthday. He credits his frugal lifestyle and hard work.
含羞草研究社淚 don含羞草研究社檛 waste money,含羞草研究社� he said.
含羞草研究社淧eople tell me, 含羞草研究社榃hy don含羞草研究社檛 you buy a new car? You含羞草研究社檝e got a 2010 Ford,含羞草研究社櫤卟菅芯可鐫 Ubben said. 含羞草研究社淏ut you know, the thing is, I含羞草研究社檓 old. So we have to get old together.含羞草研究社�
Retirement has historically lasted about two decades, but for some Canadians it is now extending to twice that amount of time as more live well into their 90s and beyond. That含羞草研究社檚 making some rethink their investments, savings, expenses and when to retire as they look to stretch their retirement funds further than ever.
Statistics Canada released new projections this week suggesting that the number of Canadians aged over 85 could more than triple by 2073, while the number of centenarians could almost increase by 10 times, surpassing 106,000.
Retirement planning requires thinking about the time horizon, the amount of money needed and making sure that money lasts, said Kurt Rosentreter, a certified financial planner at Manulife Wealth. The primary question is when to retire.
含羞草研究社淭hat含羞草研究社檚 a big factor in the planning,含羞草研究社� he said. 含羞草研究社淚f someone含羞草研究社檚 retiring at 55, they could literally live half a century with no new money coming in, in a society that含羞草研究社檚 making it more expensive every day to live.含羞草研究社�
Surging inflation and interest rates derailed many people含羞草研究社檚 household budgets over the last few years, including retired adults on fixed incomes. A 2023 National Institute of Ageing study shows the top concern among Canadians aged 50 and over was inflation, followed by fear of running out of money in their old age.
Ninety-two-year-old Hank Kuntz didn含羞草研究社檛 expect to live so long, and rarely gave his retirement savings much thought.
含羞草研究社淢y dad, I think, was the oldest of his whole generation, and he was 87 and a half when he passed on,含羞草研究社� he said. When Kuntz was in his 20s, he recalled thinking 含羞草研究社淗oly smokes! Sixty-five! I含羞草研究社檒l be an old man by this time.含羞草研究社�
Kuntz said 65 was the 含羞草研究社渘ormal retirement age含羞草研究社� when he stopped working as an accountant in 1997. He began enjoying post-work life and filled his time volunteering with a disability group. But he didn含羞草研究社檛 necessarily expect to be looking at his finances more than 25 years later.
含羞草研究社淚 never planned that hard,含羞草研究社� he said of his retirement.
He has regular income flowing from the Canada Pension Plan, Old Age Security and registered retirement savings. He lives in a retirement home and if some of his savings run out, Kuntz said he could continue to live comfortably on other income from investments he began almost five decades ago.
Running out of money is far from a theoretical concern. At age 71, a person含羞草研究社檚 RRSP account matures and the cash must be withdrawn, put into an annuity or transferred to a Registered Retirement Income Fund, or RRIF, where withdrawal minimums increase with the account holder含羞草研究社檚 age.
At 95 years and older, the minimum annual withdrawal is 20 per cent of the fund含羞草研究社檚 assets.
含羞草研究社淭he formulas they (the Canada Revenue Agency) use are really outdated,含羞草研究社� said Bonnie-Jeanne MacDonald, director of financial security research at National Institute on Ageing. 含羞草研究社淏ecause of the way the system含羞草研究社檚 built, they will have to be forced to run out of money from their RRSPs含羞草研究社� by the time people turn 100.
She said policies need to change to adjust to the booming numbers of centenarians. A Statistics Canada population tracker estimates the number of centenarians has tripled in the last two decades. In 2003, there were 3,854 centenarians compared to 11,705 last year.
Wayne Westman, a chartered financial consultant, has worked with at least three generations of clients during his 60-year-long career. His oldest clients used to be in their mid-to-late 80s, not much older than Westman is now at 84. Today, he has a 103-year-old among his clientele and others on the cusp of achieving centenarian status.
Many of his clients in their 80s and 90s enjoy decent financial status because they have defined benefit pension plans from their employers or their spouse含羞草研究社檚 employer, which aren含羞草研究社檛 as prevalent for workers today. That, combined with federal pension plans and personal investments have kept many older people afloat, said Westman.
Nonetheless, careful budgeting is necessary.
Angeline Charlebois, 105, has been living alone at her Levack, Ont. home for 29 years. She said income from her late husband含羞草研究社檚 pensions as well as Old Age Security pension have kept her going in her retirement years. This pays for the roof over her head, utilities and groceries.
含羞草研究社淚 have enough money for now,含羞草研究社� Charlebois said. But if she were to move into a nursing home, she doesn含羞草研究社檛 think she含羞草研究社檇 have enough.
含羞草研究社淎 nursing home is going to be $3,000-$3,500 a month,含羞草研究社� Charlebois said. 含羞草研究社淢y chequebook isn含羞草研究社檛 that big to support that.含羞草研究社�
But Charlebois said she feels like a millionaire as long as she含羞草研究社檚 healthy and can stay put in her home.
含羞草研究社淚含羞草研究社檓 very fortunate that I have my health and my kokology,含羞草研究社� she said, referring to the study of mind or spirit, and pointing to her head.
While watching Charlebois age, her daughter has been reimagining her own life as a possible future centenarian. Clairice Poirier, 70, retired three years ago from nursing. A widow for 25 years, she said she has been pretty good with finances but never factored possible longevity and inflation into her retirement planning.
含羞草研究社淚 never dreamt that the amount of the cost of living would soar the way it has,含羞草研究社� she said. 含羞草研究社淵et, your pensions don含羞草研究社檛 go up to reflect 含羞草研究社� some of them do, but not all of them.含羞草研究社�
But Poirier isn含羞草研究社檛 worried about running out of money in her old age if she lives as long as her mother has, or if she needs residential care when she含羞草研究社檚 older.
含羞草研究社淚含羞草研究社檓 not concerned about that because I含羞草研究社檓 the type of person that will cut back,含羞草研究社� she said. 含羞草研究社淚 will make it run the course.含羞草研究社�
Rosentreter, the financial planner, said pensions combined with registered retirement savings, tax-free savings and even investments might not be enough to keep up with health-care costs and modern Canadian living.
He suggested establishing alternative incomes for old age, such as rental property.
Ubbens has been living in a retirement building in Brampton, Ont. for over a decade, and is well-settled there 含羞草研究社� financially and otherwise. But he含羞草研究社檚 not just relying on his registered retirement funds, federal pension and savings.
His creative plan to keep money flowing into his late 90s and centenarian years was lending to family.
含羞草研究社淚 have given three of the grandchildren a mortgage on their house at a low interest,含羞草研究社� Ubbens said. 含羞草研究社淭hey pay me monthly until the mortgage is paid off and I含羞草研究社檝e been investing some of that money.含羞草研究社�
He added: 含羞草研究社淚 can probably live until I含羞草研究社檓 108 or 110 years old. I don含羞草研究社檛 have to worry about my finances.含羞草研究社�
Working beyond 65 can also keep the future secure, and feed pension and savings pools, Rosentreter said, depending on a person含羞草研究社檚 spending levels.
Even still, it can be hard to plan retirement, not knowing if it will last 20 or 40 years. Rosentreter said he has been advising his clients to use 100 years of age as a benchmark, even though average life expectancy in Canada is 79 for men and 84 for women, according to Statistics Canada.
含羞草研究社淢ost people go with that,含羞草研究社� he said. 含羞草研究社淭hey know they含羞草研究社檒l die before that but they get the logic of making sure they want to have enough money.含羞草研究社�
MacDonald at the National Institute on Ageing said deciding how much to save for retirement should be based on probabilities of living past certain ages, and asking 含羞草研究社渨hat if?含羞草研究社�
含羞草研究社淪tart thinking through, 含羞草研究社業f I know there含羞草研究社檚 a 50 per cent probability I含羞草研究社檓 going to live over 90, what would happen? If I was a widow, what would happen?含羞草研究社� she said.
含羞草研究社淭here含羞草研究社檚 a very good chance you含羞草研究社檙e going to live a long time,含羞草研究社� MacDonald said. 含羞草研究社淔or most Canadians, that含羞草研究社檚 true.含羞草研究社�
Tapping into CPP or the Quebec equivalent, the Quebec Pension Plan, in later years of retirement can help super-agers stretch their money, since the monthly benefit climbs with the age the person begins collecting the money.
含羞草研究社淎lthough most people can afford to wait,含羞草研究社� MacDonald said, 含羞草研究社渁n overwhelming majority (nine in 10) choose to take their CPP/QPP benefits by age 65, reducing the lifetime income security they say they want and will most likely need.含羞草研究社�
She suggested delaying those benefits after retirement for as long as possible and bridging the gap with savings such as RRSP.
含羞草研究社淏y doing that, I含羞草研究社檓 going to increase this lifetime pension, which protects me from inflation, which protects me from running out of money, which protects me from investment risk.含羞草研究社�
READ ALSO:
READ ALSO:
