No doubt about it: at some point we’re neither semi-retired, findependent or fully retired. We’re out there in a retirement community or retirement home, and maybe for a few years near the end of this incarnation, some time to reflect on it all in a nursing home. Our Longevity & Aging category features our own unique blog posts, as well as blog feeds from Mark Venning’s ChangeRangers.com and other experts.
One of the mistakes I made transitioning into my own Victory Lap was that I didn’t take any time off to regroup and refresh. I was suffering from “Sudden Retirement Shock.”
I wasn’t thinking clearly and I did what I always do when things are going off side: I roll up my sleeves and worked harder. I decided to go into full new business mode, spending the better part of three years in a cave writing a book and trying to figure things out.
Sure, things worked out well in the end but it took a lot of time, researching, and learning what I needed to know. Looking back now I realize it didn’t have to be as hard as it was.
I also have a bad habit of always going it alone, something I developed while working at the Corp., a John Wayne thing. I believed asking for help was a weakness and made me look vulnerable. I always took the hard way and would try and figure it all out by myself. That kind of thinking resulted in me not creating and benefitting from mentors. This was a major mistake I made in my career. Life could have been so much easier if only I had been more open minded and willing to ask for help and advice.
Retirement planning is one of the most important processes you will go through in your life. Making a plan will improve the quality of your life now and in the future by providing a plan and goals. Most of us are goal oriented and achieving success in your working years, like paying off your mortgage, saving for your child’s education, etc. provides great motivation as you work towards your Victory Lap.
Don’t DIY your retirement planning
Since time, not money is the important asset you have, don’t DIY [Do It Yourself] retirement planning. Continue Reading…
A guide from the Canadian Life and Health Insurance Association highlights the increasing cost of long-term care and reasons for buying long term care insurance. However the high cost and restrictive provisions of long-term care coverage may make it inaccessible for those who need it most.
Long-term care is described in the guide as ongoing around-the-clock care in either a specialized residential care facility or by a professional or family member in your own home. In general, long-term care homes offer higher levels of personal care and support than those typically offered by retirement homes or supportive housing.
The CLHIA reports that in-home care including meal preparation, personal care and skilled nursing could add up to $35,000 to $65,000 a year, depending on the level of services required. Local Community Care Access Centres administer the limited provincial subsidies available for at-home care.
However, all residential long term care is subsidized by the Ontario Ministry of Health with most Ontario residents currently required to pay only about 35 per cent of the actual cost. For example, based on the type of accommodation, in 2013 residents paid the following amounts:
Basic or standard accommodation: $1,707.59 /month
Semi-private: $2,011,76 /month
Private: $2,361.55
Residents who cannot afford the full amount for basic accommodation can apply for a rate reduction. A more detailed fee schedule including rate reductions can be found here.
“One reason the industry is focusing on a need for long-term care insurance is the concern that with the aging workforce, Ontario will no longer be able to maintain the government subsidies at this level,” says Caring for Clients financial planner Rona Birenbaum.
But underwriting rules for long-term care insurance are very rigorous. For example, any person who is using an assistive device (e.g. wheelchair, walker or motorized scooter) is not eligible for coverage. Applicants with a variety of pre-existing conditions (e.g. dementia, metastatic cancer and stroke) are also ineligible.
Furthermore, premiums for long term care insurance can be very expensive for limited coverage.
I asked Birenbaum to get a hypothetical quote from Manulife Financial for a 50 year old couple (John and Mary) for a maximum of $300,000 shared coverage that would pay $3,000/month to a residential facility or $1,500/month for non-facility care with a waiting period of 90 days.
This means that in total John and Mary will have 100 months (8.33 years) of residential care benefits of $3,000/month they can draw on. If one predeceases the other, the balance of the protection will be passed on to the second spouse and the premium reduced to single life.
Activities of Daily Living
To qualify for benefits under the policy, John or Mary will have to show that at least two of the following cannot be performed without substantial help:
Bathing
• Dressing
• Toileting
• Transferring (e.g., moving from a chair or out of bed)
• Maintaining continence
• Eating
The basic monthly premium is $210.40.* With the addition of inflation protection and a return of premium at death, the premium increases to $375.38/month*, with the premium level guaranteed only for five years.
“Because John and Mary may never need the service or qualify for it, I would prefer that they have the money to use for other things,” says Birenbaum. She suggests that money they spend on travel and other lifestyle enhancements in the first 10 years of retirement can be re-allocated to health care in later years.
She also advises clients to use their liquid resources such as RRSPs, pensions and other savings to fund retirement to age 90, leaving real estate as a hedge to sell later in life when they may need long term care.
Renters and people without paid up properties do not have this option to fall back on, but she says it’s also likely people of modest means will not be able to afford premiums for long-term care insurance in addition to other ongoing expenses.
“In long-term planning for my clients I prefer to focus on life, disability and critical illness insurance plus helping them to accumulate sufficient assets to self-insure for long-term care,” says Birenbaum.
Where there is a real need for long-term protection, she suggests critical illness insurance that can be converted to long-term care insurance. For example Sun Life offers a critical illness policy that can be converted to long-term care insurance starting on the policy anniversary nearest a policy-holder’s 60th birthday until the policy anniversary nearest the individual’s 65th birthday. When the policy is converted, insured clients do not have to answer questions about their health.
In fact, Billy and I discussed the idea of becoming car-free for several years. There were good reasons to do it: no more maintenance and repair costs; no more fees for insurance, license plate renewal, or registration; no more fuel expense; and no more worry about storing the vehicle here in the States when we are traveling overseas for months or years at a time.
But there were also some obvious downsides. We wouldn’t have the freedom to come and go at a whim. And because we live in the American Southwest, where temperatures reach triple digits in the summer, we wondered how we’d manage to get around during the sun season.
Silly idea or feasible plan?
Most people we know couldn’t fathom the idea of giving up their vehicle and saw this new lifestyle choice as a hardship. Americans love their automobiles, and owning one is packaged as part of the American Dream. A look at the automobile and truck commercials today describe how we will be sexier, more popular, physically stronger, and obviously smarter if we purchase their brand of car.
As we’ve described on our Retire Early Lifestyle website, Billy and I live in an active adult community where we are within walking distance to stores, restaurants, and several different entertainment options. Most of what we need is near to us, and we appreciate the slower pace of life with all the rewards it brings. Many of our neighbors use a small scooter, golf cart, or bicycle to get around within a reasonable range. When we need to go somewhere farther, we trade services or pay cash to a neighbor or friend for their time. This is much cheaper than a taxi, more sociable, and we aren’t bogged down with worries about maintaining a vehicle. Both sides appreciate the trade, and our lives are enriched.
After almost two decades of world travel, we realized that the only place where we need to drive is in the States. Elsewhere, we take public transportation or hire a private driver. For the amount of time we live in the States, and for the amount of money that owning our own transport required, we finalized our decision to sell our vehicle.
The year was 2009.
What about you?
Retirement takes many expressions and even if you could never see yourself as becoming completely free of car ownership, maybe you have toyed with the idea of keeping only one vehicle instead of two.
The following sites may help you with this transition: Continue Reading…
Did you know that more than 50% of medium sized enterprises in Canada are controlled by an owner between the age of 50 and 64? Additionally, about 75% of Canadian business owners plan to exit their business before 2022. However, according to the Canadian Federation of Business, only half of Canadian business owners have a proper succession plan in place. If you are a business owner, you need to think about the future of your company, no matter your age.
When a family’s assets and income are linked to a business, if the business owner passes away, both estate and succession planning will ensure that the family is taken care of and the company remains viable. If a person passes away without a will, provincial wills and estate law will determine how their assets are dispersed. Without any kind of estate planning in place, their heirs could be hit with a hefty tax bill, and unexpected fees and administrative costs.
There are many steps to effective estate planning and whether they all apply to you will depend on your personal circumstances. Some of them include:
To accommodate the above, there are several financial strategies at your disposal to help you meet your goals. As a business owner you should investigate:
1.) Looking at insurance as a way to shelter assets for the next generation.
Permanent cash value life insurance policies, such as participating whole life and universal life, are attractive to corporations for the potential tax-free death benefit and the tax-preferred cash accumulation benefits they offer. These insurance policies provide the corporation with valuable life insurance protection on a key person or shareholder. Another benefit is they allow for tax efficient growth and access to policy values tax-free immediately or in the future. By using life insurance, the estate value available for future generations can be significantly increased by the tax-free death benefit. Continue Reading…
Billy and Akaisha take in the view from their hostel in Zacatecas, Mexico
By Akaisha Kaderli
Special to the Financial Independence Hub
We understand that not everyone likes to travel. No doubt it can be challenging, but there are significant benefits if you choose to enliven your routine with a little excursion.
Traveling makes you smarter
From the beginning of choosing a location, packing your suitcases and figuring out the logistics of who will water your plants or sit with your pet, traveling takes you out of your routine. Anything new and different like this that engages your brain causes new neurological pathways to grow.
Learning a new language, taking a cooking or painting class while on your trip and meeting new people all place you in unique situations, and your brain strengthens.
Traveling is healthy for you!
Traveling makes you strong
For some people, all these new patterns outside the everyday routine can be perceived as a hassle. Yes, and that’s good! We learn flexibility, creativity and self-reliance. Those are great attributes to have and they are useful to daily living.
Flexibility of mind, finding new solutions to new challenges and our sense of who we are and how we cope all get stronger.
Traveling helps you become an interesting story teller
When things don’t go according to plan, those seemingly challenging circumstances make for the best stories!
If everything goes perfectly on your trip or vacation, and people ask “How did you enjoy yourselves? How was your trip?” then all you can say is “Great!” Continue Reading…
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