Canadians Facing Longer Wait For Retirement

Financial Post – Barry Critchley | February 18, 2015

Let’s hope you like your job, or are in a position to get one you like.

The reason: on average you will be spending longer toiling away than you previously thought: for the first time since Sun Life Financial has been polling the retirement plans of working Canadians, more employees expect to still be in the workforce when they reach 66, or one year past “normal” retirement, than those who expect to opt for full-time retirement.

“We have been tracking this since 2008 and this is the first year that it crossed over,” said Kevin Dougherty, president of Sun Life Canada, when referring to the survey conducted by Ipsos Reid of 3,000 working Canadians aged 30 to 65. The survey indicated 32% of respondents expect to be working full-time at age 66 compared with 27% who expect to be fully retired at that age. Currently, on average, about 1,000 people a day reach 65, with the near-term peak of 1,500 a day a few years away.

In 2008, the same survey showed 16% of the similar aged group expected to still be working full-time at age 66 with 51% expecting to be in full-time retirement. The rest (33%) were expecting to be working on a part-time basis.

A number of factors have led to a change in expectations about working past 65 with the need for cash to pay basic living expenses being at the top of the pile. “I like my job” was the fifth most important factor of the five respondents were asked to rank.

An Estate Planning Checklist

Estate Law Canada – Lynne Butler | December 24, 2010

What’s the difference between estate planning and getting a Will made? It’s approximately the same difference as going out in the middle of a -40 Alberta blizzard wearing a parka, mitts and boots, versus going out into that same freezing weather wearing nothing but the boots. The parts that are covered will be fine. The uncovered bits, not so much.

The elements of an estate plan, pared down to their essence, are:

1. A Will. Important issues are the choice of executor, the choice of a guardian for minor children, distribution of your assets to your beneficiaries according to your wishes, and the inclusion of powers for the executors and trustees.

2. A Continuing, Enduring or Durable Power of Attorney. Important issues are the choice of attorney to represent you, how or when the document is to come into effect, and controls on the attorney. May include addressing immediate needs due to incapacity.

3. A Health Care Directive. Again important is the choice of agent to represent you, and the clear expression of your wishes. For older individuals, may include discussion of various supported living arrangements to address limitations.

4. Title to various properties. Important decisions are joint ownership and tenancy in common, right of survivorship, tax effects, potential disputes, and effect on overall estate plan.

5. Insurance coverage. Major issues are ensuring liquidity to cover tax liability, creating new wealth for distribution and keeping up with changing lifestyle insurance needs.

6.  Beneficiary designations. Tax savings are important. Also important are obligations to a spouse, the impact on the overall estate plan and creditor-proofing. Affects RRSP, RRIF, TFSA, ESOP, LIRA, DRIP, pension and life insurance.

7. Business succession planning. Important issues are choice of family successor, other possible exit strategies, tax planning, future income and timing. Should tie in with shareholder’s or buy-sell agreement and company-owned life insurance.

8. Tax planning. Looking for ways to minimize taxes and maximize funds for distribution in the estate.

9. Trusts. Important issues are income-splitting for tax purposes, protection of handicapped adults, protection of children, and preserving assets to be inherited by a beneficiary at a later date.

10. Charitable giving. Important issues are giving back to the community, creating lasting legacies and creating tax credit.

11. Retirement planning. Includes discussion of dissipation or sale of current assets, business succession timelines, planning for incapacity and changing insurance needs.

12. RESP. Appoint a successor director of the plan.

13. Family dynamics. All of the items on this list are discussed in the light of the roles, abilities, shortcomings and personality of the various members of the family. Issues that may crop up are subsequent marriages, children from different marriages, separation agreements, divorce, common law arrangements, illegitimate children, disabled children, children vying for a place in the family business, belligerent or overbearing children, disputes between spouses or children, estranged family members, greedy or untrustworthy family members, and children with addictions.

As you can see, the items listed here overlap and loop back to each other. The idea is to make sure that everything works effectively together to achieve your goals. So use this checklist for your own planning and stop going out in just your boots.