Mary Cudney at her home in St. Catherines, Ont., on March 13. She retired a decade ago from a financial career, and has since been travelling, painting and taking ukulele lessons.Nick Iwanyshyn/The Globe and Mail
Mary Cudney, 73, of St. Catharines, Ont., officially retired in July, 2014 at 62 after working for more than three decades as a financial associate. “I gave financial literacy seminars to elementary and high school students,” she says, in the latest instalment of Tales from the Golden Age. “I had planned on retiring at 63, but then my husband was diagnosed with cancer and I went on medical leave. After a few months, I decided to retire. He died a year and two months after the diagnosis.”
Once she started to recover from the loss and the grief, Cudney got out more; travelling to places such as Mexico (where she went swimming with dolphins) and Peru (specifically Machu Picchu) as well as Barcelona, Spain.
“In 2017, I accepted a request to house a charitable volunteer from Serbia for a year,” she says. “I was perfect for her. Dunja had prayed for a home with a single woman and animals … I was a widow with a dog and two cats.” Cudney didn’t need the compensation she received to house Dunja and instead spent all of it on her. She also visited Dunja’s family in Serbia.
“I hired a life coach who helped me fulfil my dream of visiting Paris to see the Louvre,” she adds. “She said, ‘Set a date or you will never go,’ so I went in September, 2019.”
When Cudney is not travelling, she takes online courses about writing and spirituality. “I’m working on creating a school program to teach young kids to save and then spend and give.” She started painting again – after taking lessons in 2005 – and has shown and sold her paintings at an art show.
“A few years after my husband passed, I downsized to a bungalow that’s easier to care for. I have a small mortgage, some savings from investments, including buying company stock, and a small company pension. I took my CPP benefits immediately and my OAS at 65.”
The best financial advice Cudley says she can give is not to spend more than you earn. Also, she adds, don’t be bamboozled by commercials (including social media ads). They are grabbing your hard-earned money by playing with your emotions.
“As for retirement, I recommend finding friends you can spend time with and confide in. If you’re widowed, don’t hesitate to join widow groups on Facebook or in person.”
Read the full article here.
Are you a Canadian retiree interested in discussing what life is like now that you’ve stopped working? The Globe is looking for people to participate in its Tales from the Golden Age feature, which examines the personal and financial realities of retirement. If you’re interested in being interviewed for this feature and agree to use your full name and have a photo taken, please e-mail us at: goldenageglobe@gmail.com. Please include a few details about how you saved and invested for retirement and what your life is like now. For more articles in this series, click here.
Nick, 65, and Heather, 64, want to ‘die with zero.’ What should they do in retirement?
Nick is 65 years old and retired. His wife, Heather, is 64 and self-employed, earning about $40,000 a year in a line of work that she enjoys.
Although they own three investment properties, they are renting their residence at the moment and looking to buy a B.C. waterfront property for about $1.2-million.
“As of this year, we are considered first-time home buyers again,” Nick writes in an e-mail. So as well as having a First Home Savings Account of their own, they also want to open FHSAs for their three children to help them with down payments on their first homes.
They wonder whether Heather can afford to fully retire and when they should start drawing Canada Pension Plan benefits. Nick is already getting Old Age Security. He also asks if they should invest in a whole life insurance policy to further diversify their investments. They already have a grab bag of diversified investments, including stock-and-bond exchange-traded funds, private mortgages and real estate investment trusts.
Their retirement spending goal is $148,000 a year after tax.
In this Financial Facelift, Warren MacKenzie, an independent financial planner in Toronto, looks at Nick and Heather’s situation. Mr. MacKenzie holds the chartered professional accountant designation.
Want a free financial facelift? E-mail finfacelift@gmail.com. Some details may be changed to protect the privacy of the persons profiled.
Move over, millennials. A third of Canada’s single renters are seniors
Angela Sealy, 77, is a content lifelong renter, writes Kelsey Rolfe. Ms. Sealy immigrated to Canada in 1967 from Barbados, and lived in Saskatchewan, Alberta and British Columbia while completing her bachelor’s and master’s degrees.
Buying a home may seem like an important goal for many new Canadians, but for Ms. Sealy, it was never on the agenda.
“[Renting] was a lot easier for me … there’s this desperate need [in Canada] to purchase something that I find peculiar,” said Ms. Sealy, who’s been a resident of New Westminster, a Vancouver suburb, since 1980. She sees owning a home as a financial burden, especially for people doing it on one paycheque: “Having a down payment is wonderful, but that’s where the expenses begin.”
When people think of single people who rent, they might envision a young professional or someone who can’t yet afford to buy. And while millennials might be the face of solo renting, seniors like Ms. Sealy make up the dominant share of solo renter households in Canada. Whether seniors renting alone are doing so because of divorce or death of a spouse, retirement downsizing, personal preference or other reasons, doing so in Canada’s pricey rental market can have implications for their financial security and retirement plans.
According to a December report by North American real estate search site Point2Homes, seniors 65 and older represent 32.5 per cent of single-person rental households. The study, which relies on Statistics Canada 2021 census data, found tenants from the age of 25 to 34 make up 18.5 per cent of solo renters, a share almost identical to renters in the 55 to 64 age bracket.
Read the full article here.
In case you missed it
It turns out money does buy happiness, especially as you age
A common belief is that happiness is correlated with income, but only up to a certain level. However, a study by social scientist Dimiter Toshkov suggests that happiness keeps rising with income, even at the highest income levels. In this Charting Retirement article, Frederick Vettese, former chief actuary of Morneau Shepell and author of the PERC retirement calculator, breaks down the study’s findings.
Have you grown your TFSA to over half a million? Share your story for our TFSA Trouncers series
Last year, we launched our new TFSA Trouncers series, where we profiled Canadian investors who’ve accomplished incredible feats with their tax-free savings accounts. We heard several success stories – from a Toronto massage therapist who built up a $1.8-million TFSA by betting big on bitcoin, to a retired couple collecting $15,000 in monthly tax-free dividends. And we heard from others who were far less successful, providing valuable lessons on some of the pitfalls that come with riskier portfolio decisions.
Have your TFSA investments topped half a million? Which stocks or investments resulted in such high returns? We want to hear from you. We’re on the lookout for Canadians who wish to share their experiences – especially those who’ve had tremendous success or failures to tell us about. To participate, drop us an e-mail at dakeith@globeandmail.com or fill out the form here.
You may choose to be anonymous, but we do require an e-mail address and may request a screengrab of your portfolio for fact-checking purposes.
Use The Globe’s TFSA Limit Calculator to determine your TFSA contribution limit.
Retirement Q & A
Q: I’m 63 and hoping to retire in early 2026. I have a small RRSP and a decent employee pension, but what makes more sense: Should I apply for CPP as soon as possible and then put that money into my TFSA or should I start withdrawing from my RRSP at retirement and put that money into my TFSA? One thing: I have a series of chronic health problems that could affect my life expectancy.
We asked Howard Kabot, vice-president of Financial Planning, Family Office Services, RBC Wealth Management Canada, to answer this one.
A: It only makes sense to withdraw from an RRSP when you need the funds. Taking from an RRSP (or RRIF) is a taxable event. So, to remove funds from an RRSP, to pay the tax, only to put the funds back into a TFSA doesn’t make much sense. The more important question revolves around whether or not you should be taking the CPP early.
A reduced life expectancy notwithstanding, delaying receipt of the CPP would generally be financially beneficial, certainly if you can fund your retirement from other sources, as you mention. Taking CPP prior to the age of 65 will result in your payment being reduced from what is normally paid at 65. For 2025, the maximum monthly amount is $1,433 ($17,196/year). You may not necessarily qualify for the maximum payment. You will need to check with Service Canada to confirm how much you are qualified to receive. By taking the payment early (prior to 65), a penalty will be applied equal to 7.2 per cent a year. Assuming the max monthly payment of $1,433, your annual pension will be reduced by $2,476 (a 2-year penalty) at 63.
Alternatively, if you delay receiving your CPP past the age of 65, you will receive an extra 8.4 per cent a year to a max increase at age 70 of 42 per cent. Clearly it is financially beneficial to wait as long as you can before receiving the monthly amount, again assuming normal life expectancy.
A reduced life expectancy, however, does make the decision more difficult. Certainly, if you feel your potential reduced life expectancy is going to affect your ability to fully benefit from the CPP, then taking the funds early even at the cost of a reduction may be in your best interest.
The best way to look at this would be to crunch the numbers. Let’s assume a life expectancy of 80. Using the above amounts, starting at 63 your annual amount would be $14,720. Collected from 63 to the age of 80 (17 years) gives you a total amount of $250,240.
Now, let’s assume you waited till the age of 70 to start collecting the payment. At 70, your monthly amount increases by 42 per cent to $2,035 or $24,418 annually. From 70 to 80 you will have received a total of $244,183. So at this point, you’re almost at break even and if reduced life expectancy is a concern, then taking the funds early would make sense.
Keep in mind that receiving CPP is a taxable event, so you will pay tax on these funds. As for the TFSA, if you have excess funds not required for monthly expenses, sheltering those funds in a tax-free environment is always a good idea.
Interested in more stories about retirement? Sixty Five aims to inspire Canadians to live their best lives, confidently and securely. Read more here and sign up for our weekly Retirement newsletter.