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On Retirement — early or never?

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MarieEngen
Marie Engen (photo: Google Plus)

By Marie Engen, Boomer & Echo

Special to the Financial Independence Hub

Our current concept of retirement is relatively new. Past generations had no idea what it meant not to work. They stopped only when they physically had to.

Here’s an interesting tidbit – in 1890, nearly everyone died while still employed, and if they were healthy enough not to expire on the job, they retired at age 85.

Boomer parents were retirement pioneers.

The retirement age of 65 was first set in Germany in 1916, adopted by the U.S. in 1935, and in Canada shortly thereafter. It was probably the advent of CPP and OAS benefits that created the mindset to retire at age 65. Then came the lure of Freedom 55 and people were led to believe that 55 was a reasonable retirement age.

Related: How much do you need to save for retirement?

Presently the average age of first retirement is about 56 years, often followed by a return to work, at least part-time.

According to Statistics Canada, the retirement age is actually increasing. Continue Reading…

No April Fool’s: it’s time to get serious about tax-filing

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Tax Due DateHere’s my latest MoneySense blog. Now that it’s April and Easter is almost here, you know what that means! It’s tax-filing time: April 15th for Americans, April 30th for Canadians.

As the piece recounts, even if you’ve been staying on top of inputting tax slips and receipts, if you have taxable income you’re better off waiting a few days before filing.

But the good news is that once you file, the onerous task is over for another year, and many can also expect a refund. Plus, of course, winter is finally all but over.  Continue Reading…

Weekly wrap: Hope for “Overwhelmed” single parents, couples living on One Salary & tax revolt

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emma-johnson-single
WealthySingleMummy.com’s Emma Johnson

 

By Jonathan Chevreau

Feeling overwhelmed? Everywhere I look, long-time couples are falling apart.

So I entirely sympathize with single parents who feel overwhelmed both financially and emotionally by the twin burdens of raising kids alone and of still having to bring in money, not to mention re-entering the dating scene.

If you’re in this situation, a good place to look for support is Emma Johnson’s Wealthy Single Mommy blog, which I discovered right here under the Hub’s Best Blogs tag, flagged as one of five “Best-kept secret personal finance blogs.”

Most of Johnson’s blogs address these issues since she is in essence chronicling her own similar journey but the one that caught my attention was a video from February: Overwhelm is a Choice: How to get a grip and stop the constant stress.

No question living off just one income can be tough in the modern world. It wasn’t always that way, of course. Back in the Leave it to Beaver world of the 1950s, it was normal for one partner (usually the man back then) to bring home the bacon in the corporate world while the other played the role of Homemaker and raised the kids.

But those days are gone: it’s almost normal to have two salaries, which is why Continue Reading…

Are low interest rates punishing savers? Hardly!

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robb-engen
Robb Engen, Boomer & Echo

By Robb Engen, Boomer & Echo

It’s easy to see how savers feel punished in today’s low interest rate environment. You have to look hard to find a daily savings account that pays more than one per cent.

Fixed income investments aren’t much better, with 5-year GICs barely touching 2 per cent. All of this means parking your short-term savings will do little more than keep up with inflation – you’re treading water, at best.

Rates have fallen steadily for a quarter century

We’ve seen a steady decline in rates for the past 25 years – around the time when the Bank of Canada adopted its inflation-control target to preserve the value of money by keeping inflation low, stable, and predictable. In January 1991, the overnight rate was 10.88 per cent, the interest paid on daily savings was 9.66 per cent, and inflation ran at 6.9 per cent. By 2002, the overnight rate fell to 2.25 per cent, daily savings interest dropped to 1 per cent, and inflation held steady at a now familiar 1.4 per cent.

Related: Can you succeed with an all-GIC portfolio?

So should we long for the days when GICs paid 10 per cent or more? Are low rates really  punishing savers? Hardly. Continue Reading…

Does the Family Tax Cut benefit “rich” or encourage one spouse to work less?

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family drawing money house clothes and video game symbol on theHere’s my latest MoneySense blog, which looks at recent criticisms of Income Splitting for Families with children under age 18: aka the Family Tax Cut.

Its headline is Can the Family Tax Cut Entice Families to Work Less? Continue Reading…